Gold vs. Fiat Money

The Spotlight

1 minute read

May 14, 2021

Major global fiat currencies euro dollar yen and British pound plated in gold

Gold emerges as a clear winner in a “battle” against fiat currencies that have considerably lost in value against the precious metal over the past 20 years. Take a look at the chart!

Want to know how much value your money has lost against gold since 2002?

The chart below says it all:

graph of gold against major fiat currencies shows that gold has kept its value while fiat currencies have plummeted due to inflation

We can see that:

  • The Russian ruble has been hit the hardest having lost close to 95% of its value versus gold.
  • The Swiss franc has somewhat held up and “only” devalued by about 70% against gold.
  • The rest of the currencies have been decreasing in unison and lost around 80% of their value.

So, according to this chart, gold emerges as a clear winner in the “battle” against fiat currencies.

What are fiat currencies again?

It is a government-issued currency that is not supported by any physical commodity, like gold or silver, but rather by the government that issued it.

A system of national fiat currencies has been used globally since 1971. (What happened in 1971? See the answer here.)

And why are they losing value?

In the current monetary system, fiat currencies can theoretically be printed without limitation, like we’ve seen over the past year, which can greatly decrease their value, and in turn, cause inflation.

And what safe-haven asset has been historically used as a hedge against inflation?


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