Seems like they looking at this from an institutional perspective of hedging a single currency, looking for tight correlations over a short time periods. I don't care if there is a year or 5 of lag in either direction, or if gold outperforms currencies in a period in a non-correlated way. Funny that they quote Keynes because it seems like a superlatively Keynesian perspective on gold.
I'm concerned about the simultaneous inflation of all fiat currencies that arises from adversarial currency wars to game trade flows and reckless Fed policy devaluing what's in my bank account as a hidden tax on saving.
I want an asset that is resistant to devaluation of money and the historical examples of governments leaving the common man as bag-holders when a currency fails. I want something I could bury in the ground and feel confident that it'll be worth more when my grandchildren dig it up.
Maybe in a pedantic sense, "gold is a hedge against inflation" is "folklore" because the correlation is loose over short time periods, but over long time scales it works pretty well. Until asteroid mining is prevalent (and possibly beyond that) an ounce of gold will likely continue being enough to buy a good suit.
IMHO you have the burden of proof backwards. Gold being a good hedge against inflation has been (hard money) dogma that's been repeated over and over, but what examination of this claim has there been?
> I want an asset that is resistant to devaluation of money and the historical examples of governments leaving the common man as bag-holders when a currency fails. I want something I could bury in the ground and feel confident that it'll be worth more when my grandchildren dig it up.
Is there evidence / supporting documentation that gold is that asset? If you believe that gold is that asset, why do you believe it? Is it just a matter of trust/faith of what you've heard, and the authorities that you heard it from, or did you examine some data to come to this conclusion?
Since you're just tasking me with asking a bunch of easily google-able questions, I'm not sure what the point you're trying to make is. Are you just being contrarian, or is there a different asset that you think is a better durable store of value, or do you disagree with the concept of durable value?
Feels like you have a dogmatic repulsion to gold, and I don't understand why.
As the papers that the podcast pointed to indicate, there is nothing special about gold in protecting against inflation. The price fluctuations of gold, relative to USD, seem to be more crazy than any inflation most people have seen or are likely to see. Most people aren't going to experience crazy inflation unless there's some other crazy things happening in their country/area:
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1799102
Per the research done for the podcast, there doesn't seem to be anything special about any asset class that would protect you better than any other asset class.
I think aurum is a fine element, as are argentum, cuprum, platinum, etc. It's just whenever finance (and especially inflation) comes up there's all this talk about gold and I have no idea why. Just because it was used as money in the past, and there was for a time a link between modern cash and gold (as a kind of 'compatibility' layer), does not mean there is any point in treating it as special now. It certainly can be used as a store a value, but why is it better than anything else?
† The Aztecs didn't find it anything too special: it was shiny and flexible, so they used it simply for personal adornment (jewelry).
Do you have any evidence that gold is a hedge against inflation, or are you simply following financial folklore?
> We find little evidence that gold has been an effective hedge against unexpected inflation whether measured in the short term or the long term. The gold as a currency hedge argument does not seem to be supported by the data. The fluctuations in the real price of gold are much greater than FX changes. We suggest that the argument that gold is attractive when real returns on other assets are low is problematic. Low real yields, say on TIPS, do not mechanically cause the real price of gold to be high. While there is possibly some rational or behavioral economic force, perhaps a fear of inflation, influencing variation in both TIPS yields and the real price of gold, the impact may be more statistically apparent than real. We also parse the safe haven argument and come up empty-handed. We examine data on hyperinflations in both major and minor countries and find it is certainly possible for the purchasing power of gold to decline substantially during a highly inflationary period. When the price of gold is high in one country it is probably high in other countries. Keynes pointed out “that the long run is a misleading guide to current affairs”. Even if gold is a “golden constant” in the long run, it does not have to be a “golden constant” in the short run. Conversely, current affairs are possibly a misleading guide to the long run.
* http://www.nber.org/papers/w18706