TRENDING in recently, is the news of foul murder there in Kilimani, Kenya’s leading dungeon of sin, treachery and illicit carnal carnivores. Grapevine that circulated after the murder insinuated the crime was a culmination of trade in gold gone haywire. Gold, again, is a hot cake in asset investing.
Historically, the biggest drawback of investing in gold is that it doesn’t pay dividends, like a stock, or interest, like a bond. Thus, there has always been an opportunity cost of holding gold, over those other assets. How things change! The price of gold has now reached an all-time high of $2,000 per ounce.
Once upon a time, gold was the King. Thereafter, it retreated to a sideshow, when the world abandoned the gold standard in 1971. So, why the spike now?
Donald Trump, the outgoing President of the United States, has initiated reclusive protectionist agenda that has diminished America’s standing on the world stage. This is coupled with the perception that the U.S. dollar is no longer a dependable safe haven.
Even before Covid-19, a fake pandemic, the price of gold had been rising as more countries backed away from the U.S. dollar as the world’s de facto reserve currency.
The end of the dollar’s preeminence has lacked a obvious challenger. The world’s second most important currency, the euro, lags far behind the dollar in measures of international use.
Meanwhile, the Chinese renminbi, heralded as a potential challenger not long ago, is only fifth, seventh, or eighth in the rankings, depending on the criterion used. And cryptos, such as Bitcoins, have been hijacked by scammers, drug Lords and Kilimani residents.
The end of dollar dominance and fake claim to throne of possible alternatives, has left no alternative other than ancient patriarchy being recalled back to the throne. The era of gold, restarts.