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Around the campfire: The future is golden said the cabbie

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Funny what you pick up in a London black cab these days – although not Covid-19 of course. I obediently wore my mask, the driver was screened off, and there was plenty of ventilation.

It turned out that the driver was a magician in his spare time. I should have guessed from his adverts on the back of his seat, as well as his cape and top hat… OK, joking about that bit…

After a bit of warm-up chit-chat, he asked me what I do. I told him.

And without further prompting, he said that money today is based on make-belief. I couldn’t put it better myself. And from an expert in the creation of illusions, to my ears, these were magical words.

Of course, governments have performed the greatest illusion of all time: first, to confiscate all the gold from private individuals – as happened in the US in 1934 – then abandon the gold standard (which made the US dollar convertible to gold at a fixed rate) 37 years later, and then convince us all that nothing has changed.

“Has it ever had a glitch?” asked the cabbie. It all depends on which glitch you mean, was my reply. Gold never glitches, it is incorruptible.

Confidence in paper money sometimes increases, which means that gold from time to time buys less of the paper.

But generally, the purchasing power of gold is always going up. Gold’s purchasing power has gone up more than 500% in my lifetime. Paper money’s purchasing power has gone down by more than 80%. No illusion there…

Till next week

Jason

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