“The next chart shows the real returns from holding gold between 1850 and the present. From 1850 to 1971, gold returned (through its appreciation) an amount that roughly equaled the amount of money lost to inflation on average, though there were big variations around that average both across countries (e.g., Germany seeing large gold outperformance, while countries with only limited devaluations, like the US, saw gold prices not keep up with inflation) and across time (e.g., the 1930s currency devaluations and the World War II-era devaluations of money that were part of the formation of the Bretton Woods monetary system in 1944). After the war, gold stayed steady in price across most countries, while money and credit expanded until 1971. Then, in 1971, there was a shift from a Type 2 monetary system (notes backed by gold) to a Type 3 fiat monetary system. That delinking of currencies from gold gave central banks the unconstrained ability to create money and credit. That led to high inflation and low real interest rates, which led to the big appreciation in the real gold price until 1980–81, when interest rates were raised significantly above the inflation rate, leading currencies to strengthen and gold to fall until 2000. That is when central banks pushed interest rates down relative to inflation rates and, when they couldn’t push rates any lower by normal means, printed money and bought financial assets, which supported gold prices.”