HTML5 Incompatible Browser
A Year For Accumulation Report

How is gold a hedge against currency risk?

Eric Janszen

Find out how you could qualify for a complimentary copy of America's Bubble Economy, along with a free DVD of the complete Monex interviews with Bob Wiedemer and Eric Janszen. Just call a Monex Account Representative at 1-800-444-8317 for details.

A Year for Accumulation ReportFree “A Year for Accumulation” Report
Learn why 2019 is the year for accumulation in our new report written by widely-recognized financial market analyst, author, and Managing Partner of CPM group, Jeffrey Christian. This insightful report will provide you with informative facts, statistics, charts, and more details that explain why investors should begin to think about accumulating precious metals in 2019. Monex offers this report completely free of charge in an effort to keep our customers and prospective customers informed about the events occurring within the precious metals market. Claim your free report now with a quick, easy phone call to a Monex Account Representative. Call now: 1-800-444-8317.

IMPORTANT NOTE: The information presented in these video clips is solely a highlight of the opinion of a third-party and is incomplete. Please visit the website and/or subscribe to the publication for the full and timely opinion of the individual and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

Video Transcript

What's unique about gold as a hedge is that it operates as what I call, "the 4th currency." There are really 3 major currencies in the world the dollar, the yen, and the euro. Demand for gold, again as I mentioned before quoting Greenspan, "tends to rise in periods of financial risk." A major source of financial risk in the financial markets today is currency risk. So the reason that gold is so unique as a hedge is it hedges this currency risk and acts as a 4th currency against which all the other currencies are compared. So it is considered to be the most sustainable currency. Paradoxically, the largest holders of gold today are central banks themselves, as a group. The last time I checked, I think, they still hold about 25% of all the gold that has ever been produced in the history of the world. You have to ask yourself, if they don't think it's valuable, well why haven't they sold it? They certainly had 30 years to do it since we've went off the gold standard. The other argument I make to friends is… one of the reasons to hold gold is for the same reason the central banks do. They're trying to hedge the same risk, which is the currency system may not hold up through a crisis and they may need the gold to fall back on. I think that's a perfectly reasonable reason or fair reason to buy gold.