{"id":51089,"date":"2020-02-10T21:14:32","date_gmt":"2020-02-11T02:14:32","guid":{"rendered":"https:\/\/olduvai.ca\/?p=51089"},"modified":"2020-02-10T21:14:37","modified_gmt":"2020-02-11T02:14:37","slug":"gold-a-modern-investment-framework-for-an-ancient-asset","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=51089","title":{"rendered":"Gold: A Modern Investment Framework For An Ancient Asset"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/macrohive.com\/hive-exclusives\/gold-a-modern-investment-framework-for-an-ancient-asset\/\">Gold: A Modern Investment Framework For An Ancient Asset<\/a><\/h3>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/macrohive.com\/wp-content\/uploads\/2020\/01\/Gold.jpeg\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Gold no longer serves as an official money in the modern financial system, yet it is still considered an important asset due to its established diversification and store of value properties. But what framework(s) should we use to understand the role that gold should play in investment processes and policies? In Part I of this series, I present one useful framework which implies that gold is significantly \u2018under-owned\u2019 and, consequently, undervalued at present.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>A Brief History of Gold\u2019s Monetary Role<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Most investors are familiar with the ancient use of gold and silver as money, and that gold still provided the monetary base for economies well into the 20<sup>th<\/sup>&nbsp;century. Indeed, less than a century ago, in the aftermath of WWI and associated large currency devaluations and hyperinflations in Europe, there were several international conferences held to try and strengthen gold\u2019s role as a source of monetary and economic stability. 75 years ago the famous Bretton-Woods conference was held, formally re-establishing gold\u2019s role at the centre of the international monetary system.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For investors of that time, gold held a central role in investment processes. It was the bedrock collateral of the financial system \u2013 the \u2018risk-free\u2019 asset \u2013 and the benchmark for measuring investment performance. Gold was also an instrument that the central banks of the day could use to help contain financial crises. In the event of a run on deposits or an interbank collateral squeeze, central banks could lend out their reserves (normally at penalty rates of interest) in order to buy time for the system to restructure and reorganise. For example, gold lending was one of the actions taken by JP Morgan to help contain the US Banking Panic of 1907. This provided a model for how the Federal Reserve was subsequently designed to act as a lender of last resort.<a href=\"https:\/\/macrohive.com\/hive-exclusives\/gold-a-modern-investment-framework-for-an-ancient-asset\/#_ftn1\">[1]<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gold: A Modern Investment Framework For An Ancient Asset Gold no longer serves as an official money in the modern financial system, yet it is still considered an important asset due to its established diversification and store of value properties. But what framework(s) should we use to understand the role that gold should play in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,374,2500,15816,27824,2069],"class_list":["post-51089","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-gold","tag-history","tag-john-butler","tag-macrohive","tag-monetary-system"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51089","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=51089"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51089\/revisions"}],"predecessor-version":[{"id":51090,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51089\/revisions\/51090"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=51089"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=51089"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=51089"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}