History of Gold
Gold has been used as money for thousands of years, and has been the only store of value to truly endure. Proving resistant to inflation and outside of the control and whims of Kings, rulers and today’s central bankers, nature’s money has stood the test of time.
Civilisations and their economies throughout history have benefited from their strong gold currencies and gold money. The Persian Empire’s success and trade was built on the gold Daric, the Ancient Greeks also used gold based money, whilst the city states of Rome and medieval Florence also owed their success to the gold Aureus and Florin respectively.
In modern times, ties to gold were cut after the failure of the Bretton Woods money system, launched in 1944. Bretton Woods established the gold bullion backed dollar as the world’s reserve currency, which could be exchanged on demand for gold bars at the Federal Reserve. As other central banks lost confidence in the management of the dollar, they increasingly traded in their dollars for gold investments, causing a run on US gold reserves. In reaction to this president Nixon severed the dollar’s link to gold bullion in 1971, ending the dollars gold convertibility and thus creating today’s system of freely floating paper currencies.
In today’s world of unstable markets and creeping inflation, gold is now increasingly seen as the world’s real reserve currency, with dollars, euro and pounds losing over 90% of their purchasing power in the last 40 years alone. As central bankers rely on printing money and national debt levels rise alarmingly, gold’s unique properties as money are being recognized once more.