Gold in Times of Crisis
The following article is created and or curated by the Orion Metal Exchange for the benefit of our followers. We seek to provide relevant precious metals, economic and geopolitical content that can impact your retirement and savings. If you are interested in learning about precious metals investing, call 1-800-559-0088, for a FREE investor kit.
Gold has long been considered the leading choice for investors in a time of crisis. It is a symbol of wealth and a safe haven for a majority of people during unsettled and unpredictable markets.
A major reason why gold is a popular choice for investors and non-investors alike is that it’s a commodity that can also be used as a currency.
When economic growth stagnates or becomes volatile, gold moves in the direction opposite to the market trends.
There are several examples throughout history where gold has served as an asset during times of crisis because it retains its purchasing power.
Let’s look at some examples where gold has been used in times of crisis.
Used by refugees after the Vietnam War
Vietnam’s economy was understandably crippled after the Vietnam War. The aftermath of any war is devastating, let alone a war that had been going for nearly two decades.
Naturally, a vast majority of Vietnamese and Chinese people looked to flee the country, especially those that resided in southern Vietnam.
In times when the economy was crippled, refugees were smuggled out of the country on ships where smugglers demanded to be paid in gold.
This helped people flee the country as they had stored up gold, which they eventually used to get out of Vietnam and start a new life in another country.
An asset for Venezuelans
Venezuela is knee-deep in an economic crisis. The economic situation has worsened due to years of corruption, with hyperinflation rising to an astonishing 10 million percent.
Even in a country like Venezuela, where the currency has collapsed, gold is serving a valuable role as it’s now being used to exchange goods and services.
This is a prime example of gold being used as a currency. Not only is gold used to buy food, but an unbelievable trend is universities accepting gold as payment for course fees.
Countering hyperinflation in Zimbabwe with gold
The economic situation of Zimbabwe has been in disarray for well over a decade now. Years of poor leadership, corruption, and mismanagement finally caught up to the nation in the mid-2000s, when the country started experiencing hyperinflation.
Zimbabwe has substantial gold resources, which is why many locals resorted to illegal gold-mining and used grams of gold to buy basic items such as bread and milk.