Why Gold’s Relentless Rally Still Has Room to Run
Source: FREEP!C
Inflation and the rising global debt and its servicing cost is chewing up cash. Gold just kissed $3,327/oz, proving J.P. Morgan’s old line—“Gold is money; everything else is credit”—still rings true. The safe-haven demand is no longer a sideline story; it’s the market’s main act.
Fiat’s Slow Fade
U.S. dollar: –25 % purchasing power in five years.
Euro: –90 % versus gold over 25 years.
Public debt: U.S. $35.7 tn (123 % GDP); U.K. back at 100 % GDP and Japan 255% GDP.
Why Central Banks Can’t Stop Buying
China → trimming Treasuries, stacking bullion.
Russia → gold now 32.5 % of reserves.
BRICS 159-nation settlement plan signals the dollar’s shrinking monopoly.
Dollar supremacy is at risk due to trade war and declining superpower.
Gold Industrial Edge—Not Just a Relic
Conducts electricity for tech.
Kills bacteria in medical implants.
Shields satellites from solar flare-ups.
Supply Squeeze You Can’t Ignore
131 paper ounces traded for every physical ounce.
Miners add just ~1 % new supply each year.
One good panic, and the paper crowd scrambles for the exit.
What Could Push Prices Higher
Debt monetisation — printing to pay interest bills.
Rate cuts as growth stalls.
Geopolitical flare-ups—always the wild card.
I’m not betting on all three—but history says at least one shows up.
How I’m Playing It
Core holding: physical coins/bars (no counter-party risk).
Satellite: low-cost bullion ETF for liquidity.
Rule: add on dips, never sell to chase hot trends.
In the last 26 years Gold has outperformed the S&P 500.However, in the last 92 years gold only compounded 5.7% in comparison of the S&P 500 10.1%
Conclusion
Gold preserves wealth and beats inflation, but over long horizons a diversified equity index has roughly doubled gold’s growth rate—making stocks the stronger long-term performer.
Historically gold has proved to be a great storehold of wealth and gold serves as an insurance policy against the devaluation of fiat currencies. As Friedrich Hayek noted, “The gold standard has been destroyed chiefly because it was an obstacle to inflation.” Until governments learn fiscal restraint (don’t hold your breath), I see the yellow metal outpacing paper promises—and I’m positioning accordingly.