One of the European central banks stated that fiat money will lose its popularity and become worse perceived than gold. The condition is a complete collapse of the global financial system.
Gold will save the economy from collapse
In comments that have positively surprised critics of fiat, the Dutch central bank, known as De Nederlandse Bank (DNB), said gold would be essential in the event of a fiat crash.
The statement on the bank’s website describes gold as “an anchor of confidence for the financial system”.
“If the whole system collapses, gold stocks are a safety net to start with. Gold provides certainty about the strength of the central bank’s balance sheet. This gives sense “security”
– the report continues.
In fact, this central bank announcement is in line with the policy of central banks, which have been buying gold since the 2008 financial crisis. Gold – as a form of “sound money” with the highest stock-to-flow ratio of all commodities on the market – has always ensured the proper functioning of economies.
However, it is increasingly said that investors who used to buy precious metals are now looking favorably at Bitcoin. Arguments are often heard that it is the new safe haven.
Why is this happening? Central banks, theoretically in charge of fiat currencies, use interventions to artificially manipulate their supply, which is practically impossible with gold or BTC.
Gabor Gurbacs, Digital Asset Manager at VanEck, tweeted in response to DNB’s words:
“I strongly believe that private money has a place in our world. Private money should be able to compete in the free market with central bank money.”
Investor Mike Novogratz, meanwhile, said something similar, telling CNN that both gold and Bitcoin are sound money.
“We have geopolitical uncertainty, we have negative rates; everything is good for gold and for Bitcoin”
– he said in an interview on October 11.
Not everyone agrees, however. Apple CEO Tim Cook said earlier this month that only governments should control the issuance of money. He said this in the context of Facebook’s ongoing difficulties in launching its planned digital currency Libra. The Apple CEO said he would not seek to follow suit.
