The Role of Gold in my Life

The Economist has an interesting article about a study that debunks the notion of Gold as a hedge against inflation or as a safe haven in crisis. In a study from 1995 to 2005, Gold tended to behave like any other risk asset.

Being a Gen-X person, Gold, as a store of wealth, has little resonance with me. The use of Gold in jewelry, or as an element that has industrial uses is far more understandable. I've grown up in the post-Gold Standard era, one which has seen incredible credit expansion, and the creation of several pioneering asset classes. To me, backing a unit of credit against, say, land is more plausible than backing it to Gold. For starters, if I did issue credit against physical Gold, and the borrower defaulted, where would I go to convert the Gold into a more fungible currency that, say, the supermarket would accept? On the other hand, there is a ready market of people more than willing to exchange my land for currency.