In a world marked by ever-growing debt and the expansionary monetary policy of central banks, gold has cemented its historic role as a safe haven and stable store of value. The precious metal is much more than a barbarous relic: It represents a timeless insurance against the risks of a fiat currency system that is coming under increasing pressure.
But why is gold becoming more and more valuable in such an environment?
The fiat money system and its weaknesses
Since the decoupling of the US Dollar from its last link to gold (Bretton Woods system) in 1971, our current financial system has been based on fiat currencies, i.e. money that has no intrinsic value and is only supported by the trust of users. This system has given governments and central banks around the world enormous freedom to increase the money supply in order to solve what appear to be short-term economic problems. But this freedom comes at a price: It leads to a creeping devaluation of currencies and economic crises.
The massive indebtedness, which affects governments as well as companies and households, is a direct consequence of this system. In 2023, global debt exceeded $300 trillion – a figure far beyond what could ever be repaid from tax revenues. Fiat money allows states to finance new debt by issuing bonds, which are often bought up directly or indirectly by central banks. This practice, known as „monetary financing“, undermines confidence in the stability of currencies.
Gold as a stable store of value
Unlike fiat currencies, gold has properties that have made it a proven store of value for thousands of years. It is scarce, durable, divisible and accepted – properties that make it ideal for retaining value. While paper currencies can be devalued, the amount of gold is limited by nature.
In a world full of debt, where confidence in the ability of states to meet their obligations is dwindling, gold is becoming more attractive. It represents an escape from the fiat money system and offers protection against inflation and currency devaluation.
Inflation and the flight to tangible assets
The expansionary monetary policy of recent years has driven up inflation rates worldwide. When central banks increase the money supply to finance government deficits or put together stimulus packages, this inevitably leads to a loss of purchasing power of currencies. This so-called „inflation tax“ particularly affects savers and people with fixed incomes, while assets such as real estate, stocks – and gold – retain or even increase their value.
Gold has a proven history as an inflation hedge. In times of high inflation, the price of gold rises as investors and savers shift their money into a safe store of value. Especially in emerging markets, which are often affected by currency crises, gold plays a central role as a currency outside the official system.
Debt crises and the loss of confidence
The immense global debt makes the financial system vulnerable to crises. Historically, states that can no longer service their debts have often resorted to the „ultima ratio“: The devaluation of their currency or even national bankruptcy. In such situations, fiat money rapidly loses its value, and gold becomes the currency of choice.
An example of this is the hyperinflations in Argentina or Venezuela, where the value of the local currency fell within a very short time and gold played a vital role in maintaining purchasing power. Even in economically more stable regions such as the European Union, a renewed debt crisis, as observed in the eurozone in 2010-2012, could massively undermine confidence in the common currency.
The fall of the French government and the inability to get the French government deficit under control could be harbingers of a new euro crisis.
Central banks and the return to gold
Interestingly, central banks themselves have also started to increase their gold reserves. In recent years, emerging markets such as China, India and Russia in particular have significantly increased their holdings. This indicates that they are also questioning confidence in the US Dollar as the world’s reserve currency. Gold is increasingly seen as a way to hedge against geopolitical risks and the uncertainties of the global financial system.
The long-term outlook
Gold is not an object of speculation; it’s insurance. Its value increasing because, because fiat currencies are losing value. In a world where governments and central banks keep resorting to the printing press, the value of gold compared to paper money is becoming more and more apparent.
The importance of gold is expected to continue to grow in the coming years. The mountains of debt, global monetary policy, geopolitical tensions, and increasing distrust in fiat currencies create a perfect environment in which gold will cement its role as the ultimate form of money and security.
How can you buy precious metals cheaply and store them safely?
Elementum Deutschland GmbH, based in Sindelfingen (Germany), specializes in trading physical precious metals. Customers who purchase precious metals from Elementum Deutschland (or one of the other national Elementum companies in five European countries) can store them in the renowned high-security vaulting facilities in the St. Gotthard Massif in Switzerland at Elementum International AG.
Of course, you also have the option of purchasing gold and silver directly and having it delivered to your desired address. However, storing silver in the so-called open duty-free warehouse („offenes Zollfreilager“) at St. Gotthard offers decisive tax advantages:
- The 19% value added tax customary in Germany is completely waived on purchases and sales – a considerable price advantage that effectively secures you 19% more silver for your money.
- If you store your silver in this high-security vault, you can sell it back to Elementum Deutschland GmbH at any time – without any bureaucratic hassle and also without VAT, as the trade takes place within the duty-free warehouse. You will receive the funds via bank wire.
- VAT is only payable when you physically remove the stored silver – either by picking it up in person (after prior notification) or by having it shipped to your address.
More silver, more return
Thanks to duty-free storage, you receive 19% more physical silver when you buy. This additional amount also participates in the performance of the silver price if it rises – a leverage effect that significantly improves your return opportunities.
Secure your storage space now – free of charge and without obligation
Register now for a storage space in the St. Gotthard high-security vaulting facility and receive free access to:
- our General Terms and Conditions (GTC)
- current fee tables
- annual audit reports from the auditing company BDO AG
- transparent proof of use of funds
- family discount information
- the popular children’s program “Schatz4Kids” („Treasure4Kids“)
- as well as numerous other documents and information on storage, purchase, and resale, as well as the ratio “switching” strategy.
Register now: https://silberbar.elementum.de/
Tip for discounted entry: Enter the promotional code “50” („Aktionscode„) and the „Vermittler“ number 1000166 when registering to receive a 50% discount on the storage space setup fee.
Important: Registration is non-binding and does not commit you to anything – but it is your first step towards an independent and crisis-proof precious metal investment.
Elementum is a second-generation, owner-managed family business. Trust, consistency, and long-term thinking are at the heart of our philosophy. The Board of Directors of Elementum International AG is composed of internationally renowned experts in the money and precious metals markets, including economists, analysts, university professors, and precious metals specialists. This in-depth expertise forms the backbone of our actions—for your security, your assets, and your future.
About the Author
Prof. Dr. Philipp Bagus
President of Elementum International AG
Philipp Bagus is Professor of Economics at Universidad Rey Juan Carlos in Madrid, Spain. His research focuses on monetary and business cycle theory, and he has published in international journals such as the Journal of Business Ethics, Independent Review, and the American Journal of Economics and Sociology. He has received numerous awards for his work, including the O.P. Alford III Prize in Libertarian Scholarship, the Sir John M. Templeton Fellowship, the IREF Essay Prize, and the Ludwig Erhard Prize. Bagus is a member of the Academic Advisory Board of the Ludwig von Mises Institute Germany and the author of several books. His best-known works include „The Milei Era: Argentina’s New Path“ (2024), „Full Reserve Banking versus the Real Bills Doctrine“ (2024), „In Defense of Deflation“ (2015), and „The Tragedy of the Euro“ (2011).
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Disclaimer: This article does not constitute a recommendation to buy or sell. Elementum International AG is a Swiss company that specializes exclusively in the storage of physical precious metals in a high-security vault facility located in the St. Gotthard mountain massif in Central Switzerland. The Board of Directors and Executive Management of Elementum International AG have been selected solely based on their professional expertise and long-standing experience in precious metals markets. As these individuals may also be professionally active outside their roles at Elementum International AG, the company has no influence over their external activities and respects their right to freedom of expression. Therefore, the views expressed by persons working with or for Elementum do not necessarily reflect the opinion of Elementum International AG. Investments in precious metals are subject to risks, including those specific to the structure of this market. Please read our full risk disclosures and consult a licensed financial advisor before making any investment decisions. Neither the author, Elementum International AG, nor Elementum Deutschland GmbH assume any liability for actions taken based on the information provided. Past performance is not indicative of future results.
