Published
1 year ago on
April 27, 2022
Mainstream news media is taking advantage of the bitcoin and crypto slump in order to promote the government line that fiat currencies are better value in the present dire economic environment. Gold is held up as the “real hedge”, but of course, they have that price under control don’t they?
In a CNN Business article today, the author pointed out how gold is the real investment for these inflationary times, and that even the dollar was a better investment than crypto.
“the good old fashioned dollar is also turning out to be a better investment than bitcoin and other cryptos during these volatile times.”
It was explained that bitcoin was down more than 15% so far this year, and that various other cryptocurrencies had also fallen precipitously. The author went on to say how gold had performed extremely well in comparison, having climbed 4%.
Wells Fargo analysts were quoted as saying that gold could even get as high as $2100 an ounce by the end of the year - as much as a 10% increase.
The article also quoted a senior markets analyst who said:
"Gold is historically one of the strongest performers in a stagflationary environment, in which equities suffer and commodities often retreat."
Most people would not argue that gold certainly is sound money. It has been throughout history, and this utility will not change any time soon. However, it should be argued that gold is added to a portfolio in order to protect wealth. Its value remains fairly stable over time while fiat currencies are being debased.
It’s a plodder. A very valuable asset, but a plodder nevertheless. Anyone can say how it has out-performed bitcoin so far this year by a few percent, but what about the previous few years?
According to an article on the Nasdaq in late 2021, the figures have been rather more dramatic, and not in gold’s favour:
“Over the last 10 years, gold’s return on investment (ROI) in USD is seeing -0.25% and the S&P 500 is showing +277% today (November 15). Both these benchmarks pale in comparison to Bitcoin — 437,171% since 2011.”
The CNN Business article ended with the following rather trite statement:
“It just goes to show that for many investors, bitcoin is still no substitute for gold or government-backed currencies during times of crisis.”
For government-backed currencies to be the answer to the current crisis is so far-fetched that they don’t really deserve any consideration whatsoever. They are the cause - not the solution.
We can rely on the mainstream media to give bitcoin and crypto a kicking whenever they can. If they can put enough of this kind of stuff out there then it may be enough to keep the average retail investors off the scent.
It does seem a shame, given that Satoshi Nakamoto arguably had them in mind when launching bitcoin against a backdrop of the excesses of the traditional finance system.
Knowledge is the only way out. If the average investor can start digging just below the surface, then they can get to know the banking and financial system for what it is, and they can begin their flight to safety with bitcoin.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
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