Regarding Willem Buiter’s Markets Insight piece “Gold bubble must prompt central banks to sell” (October 10), fiat currencies are convenient as a medium of exchange. We use them as banknotes and bank deposits to facilitate trade. Even under the gold standard, banknotes and bank deposits comprised the majority of the money supply. Fiat currencies are so convenient that consumers and businesses will put up with very large amounts of debasement and still keep using them. We have ample proof of that. We do not need crypto coins or stablecoins to make money transfers easier or faster.
Gold serves as a long-term store of value that cannot be destroyed by any government. Look at these equivalencies and determine which has been the better long-term store of value since 1913.
First, a £1 banknote from the Bank of England and a gold sovereign; two, a $20 bank note and a US gold double eagle; three, a 100-crown bank note from the Austro-Hungarian Bank and a 100-crown gold coin, and even four, a SFr20 bank note and a Swiss 20-franc gold coin.
Gold does not produce income but it holds value over long periods of time without depending upon any government to manage it. Gold takes on its highest value at times when and places where order disappears. This fact is why people all over the world want to have some, even if in the form of jewellery.
Stephen Weeks
Houston, TX, US
