“Gold still has a degree of moneyness. (But) gold isn’t money in the sense that you can’t use it at the street retail level anywhere in the world — there’s no demand for that,” he told the audience at the show.
“So when we talk about gold, or any other precious metal, it is a monetary asset. It has a degree of moneyness,” Deist went on to explain. “Bitcoin, I would argue, (also) has a degree of moneyness, treasuries have a degree of moneyness. And then there’s liquidity and a demand that may give them money-like properties.”
From there, Calandra offered an anecdote about the difficulties associated with selling physical gold, prompting Ayales, chief trading strategist at Gold Charts R Us, to highlight the ease of monetizing cryptocurrencies.
“Cryptos are so easily bought and sold, the platforms allow for that, (which) allows for the younger generation to be able to be more invested, whereas gold is a bit harder,” he said.
“Unless you have a trading account, or you buy exchange-traded funds, or you have a coin dealer or somebody that you can buy directly from, it’s a little bit harder, especially if you want to sell.”
Reciprocal gold theory
Calandra then brought up reciprocal gold theory, which suggests that gold’s value is maintained through its relationship with currency and economic confidence, acting as a mirror reflecting the stability or instability of fiat money.
According to reciprocal gold theory, as trust in fiat currencies diminishes — often due to excessive debt, inflation or poor monetary policies — the value of gold tends to rise, making it a reciprocal measure of confidence in the financial system. Essentially, gold’s worth is inversely related to the perceived strength of paper money.
For Calandra, who believes in reciprocal gold theory, gold will eventually “pay back” the gains seen in blue-chip stocks, like Fortune 1000 companies, noting that as stocks rise higher, gold remains undervalued.
He noted that when these stocks decline, or confidence in them wanes, people may shift investments into gold. With that in mind, he asked panelists when investors will raise their gold allocations from 1 percent to 2 to 3 percent.
For his part, Deist pointed out that North American investors have a different relationship with gold than investors in Turkey or India, where the average citizen owns more gold in the form of jewelry, dishware or physical coins.
Deist expects North American investors to bolster their gold holdings soon.
“I think we have to have a cultural shift where people under a certain age — as is happening right now — start to feel like some people in this room (felt) in the ’70s. You have a solid decade of seeing your paycheck and your savings eroded, and people are going to be looking for the exit,” he commented.
Building on Deist’s thoughts, Dana Samuelson, president of American Gold Exchange, highlighted the differences between these countries and the US. “The gold cultures around the…
Read More: Cabral Announces Filing of NI 43-101 Technical Report for Prefeasibility