WSJ: The Enduring Brilliance of Gold During Inflation, Banking Crises, and Beyond

by | Apr 27, 2023 | Invest During Inflation | 36 comments




Gold prices continue to rise despite tumult in the financial sector after the collapse of Silicon Valley Bank and Signature Bank. As the Federal Reserve continues to try and ease inflation, many nervous investors are seeking stability in the form of gold.

WSJ’s Yusuf Khan explains why the precious metal has kept its sparkle.

0:00 Why gold’s value rose during the banking collapses
1:01 How slower interest rate hikes further increased gold’s worth
1:36 How the decline of the dollar is affecting gold
2:08 What’s next for gold prices?

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Gold has been a valuable commodity for centuries, and it still shines through economic turmoil. Inflation, banking crises, and other economic struggles can shake up financial markets, but gold provides stability and security.

Inflation often devalues currency, making it harder to save money and invest in the long-term. Gold, on the other hand, is a finite resource with tangible value. It is not subject to the same fluctuations as currency and can provide a hedge against inflation. During times of high inflation, gold will retain its purchasing power, while currency loses value.

Banking crises are another challenge that can impact financial markets. In these situations, people may lose trust in banks, and their savings could be at risk. But gold is not tied to any specific financial institution, making it a secure store of value when banks are struggling. Investors turn to gold in times of crisis because it can protect their assets when other investments may be failing.

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In addition to economic instability, geopolitical uncertainty can also impact financial markets. Geopolitical issues such as trade tensions or political unrest can create uncertainty, making investors uneasy about traditional investments. Gold, however, is not tied to any specific nation or government. Its value remains constant whether the economy is booming or struggling.

Investors can also use gold to diversify their portfolios. Adding gold to a portfolio can provide balance and security, especially during volatile market conditions. Gold prices tend to move in the opposite direction of traditional investments such as stocks and bonds, making it an effective way to offset risks in one’s portfolio.

In conclusion, gold shines through inflation, banking crises, geopolitical uncertainty, and market volatility. Its tangible value and stability make it a valuable asset for investors looking for a secure store of value. By diversifying their portfolios with gold, investors can protect their assets and maintain peace of mind during uncertain times.

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36 Comments

  1. Siena Hoyt

    I used to think every investor lose out during inflation, meanwhile some make millions. I also thought everybody went out of business during the Great Depression, but some went into business. Bottom line, there's always depression for some, and profit for others, it all starts from having the right mindset. That said, I've set asides $250k to invest for future, unfortunately I'm a complete noob.

  2. THE FUN ZONE

    Silver has done better

  3. haby alexandru

    Get money out of the banks Buy gold and silver

  4. Arthur Peter

    Last week Elon musk talk on BBC News on the importance of investments and how millions of people made billions investing in Digital assets and real estate and he recommended an expert broker Mrs Olivia Fletcher wondering if viewers here are familiar with the name

  5. drmodestoesq

    Man, those gold bricks looked light. Are you sure it wasn't gold plated magnesium?

  6. egal17

    Gold is one of the worst "Investments" we have.

  7. b samoong

    didnt understand anything

  8. Aurobindo Ghosh

    why? gold is the cause of inflation, banking crises, and more

  9. C C

    Gold price will keep rising until human can bring gold from other planets

  10. J J

    All major countries are buying immense amounts of gold like China, India, Russia. Even the US has been doing this for decades.

  11. aran tiger

    Nice〜〜〜〜〜〜 Info❜

  12. M D

    Big fan of gold, but remember what they did in the 30’s, illegal to spend or have, had to, by law, sell to the govt at spot price, $35 per ounce?

  13. Brian Denison

    Gold is a terrible investment. Look at it's long term track record vs S&P 500. WSJ is criminal for putting this nonsense out in the world without any disclaimers… they will hurt people who listen.

  14. Fanny Wayne

    Isn't it an ancient relic ?

  15. choirul abidin

    And that is how your great grandparent do INVESTATION.

  16. naila chou

    It could be that the reason why central banks in many parts of the world from the US and BRICS nations are stockpiling gold is to have exclusive control over their own currencies, which may or may not be partially backed by gold, and restrict individuals (including from their own population) and other nations under their influence whose local currencies are not recognised or not valued internationally, from gaining access to gold so that its value spikes and then individuals and nations under their control would be forced to trade their commodities and resources for the gold that’s hoarded by central banks of nations whose currencies are valued or assume reserve currency status in the form of CBDC, a basket of currency or otherwise, thus the global powers would be able to exert totalitarian control over the resources, nations and populations under their influence.

    How about cryptocurrency? Problem with digital currencies such as bitcoin is that it could be demonetised then you risk losing all your money, it may not withstand competition from CBDC, or it could be subject to other scams such as a cyberattack, decentralisation can be compromised at the expense of increasing transaction rates for example through lightning hubs (refer to Coldfusion video on bitcoin) or being coopted by central banks, regulators and governments.
    The cryptocurrency exchange Mt Gox that operated between 2010 and 2014 and was responsible for more than 70% of bitcoin transactions at its peak was hacked in 2014 and thousands of bitcoins were stolen as a result of transaction IDs being altered. Only about 200,000 Mt. Gox bitcoins were recovered and the rest (650,000 to 850,000) were lost or removed from the network. Over next few months it is predicted upto 140,000 Mt Gox bitcoins is about to hit the crypto ecosystem. A combination of over supply of Mt Gox bitcoins and recent launch of US government Operation Choke Point 2 restricting liquidity into the crypto market could have an adverse effect on bitcoin.

    The instability in financial markets or the global economy that is evident from use of fiat currency, cryptocurrency or CBDC, could be overcome by simply transacting with gold and silver coins and use them as legal tender without the need to use any currency that’s backed by these precious metals. Gold is continually being mined so can maintain price stability relative to supply of goods in the real economy, it can be recycled and never destroyed and it is not an interest bearing instrument which is the main cause of bank and crypto company collapses in recent times and instability in the global economy.
    The argument that there may be transportation issues with transacting in gold coins would not hold if there are limits set on how much a person is allowed to transact in gold coins given that there is a finite amount of gold in the world and that the gold held by a person is somehow redeemable if required wherever the person may be in the world from their allocated account. Given that tonnes of gold is being mined and produced continuously by many countries all over the world this should enable prices of goods being produced or existing in the real economy to be kept relatively stable if measured in gold money only. Everyday transactions could be conducted in silver.

  17. ReefMimic

    If you buy gold make sure it’s physically in your possession. Don’t buy gold from a “cloud” company

  18. True Persona

    You can suppress precious metals as much as you want through FIAT INFLATIONARY CURRENCY and TAXES but it still shines and shouts I AM REAL AS WEALTH GETS !!!

  19. William Drijver

    Gold is far more trustworthy than bankers and corrupt politicians. I agree with Mr Buffett on gold, but its appeal is easy to understand.

  20. G. Zeigler

    Silver, Copper, Palladium elements and Steel metals… no we are talking….

  21. Ambrosia

    We are looking at this as if we can purchase gold in bulk….

  22. Ruben Avila

    I always buy gold and silver to make me happy.

  23. Chi-Jen Yang

    Gold prices do not rise despite tumult in the financial sector. They rise because of the tumult in the financial sector.

  24. Unknown Person

    Because it’s beautiful.

  25. Phil D

    Why do I have to turn the volume up for this video?

  26. Salman T

    Waiting for the video on storing rice next

  27. Sazzbot

    meh. food is the real value.

  28. Fatoş Faraşoğlu

    Do you seriously believe that every investment platform offers the same level of protection as Papayahub?! They have some serious standards! Just give papayahub a try.

  29. Rüzgar

    I work with PapayaHUB. In just 5 months, I made a profit of +150%.

  30. SomeRandomPerson

    Gold is useless you can’t use it to buy anything

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