Unloved Gold: the Protection Against Central Bank Charlatans

Grant Williams recently spent two days with Tony Deden, wealth preservation expert who operates from Switzerland. The result was two 1-hour interviews presented on Real Vision Television. Deden is not well known to the average investor and he likes it that way.

Much of the money Deden manages is invested in private family businesses. Deden doesn’t trade stocks or pay much attention to the financial world for that matter. The world’s central bankers and white shoe financial firms have created a mystical never-never land where nothing is real or that can be trusted.

Deden holds an extraordinary percentage of the wealth he successfully preserves in gold. A student of the Austrian school of economics, he understands what money is and its purpose. I’ve had the pleasure of meeting Mr. Deden a number of times and remember him telling me how he bought a copy of Ludwig von Mises’s magnum opus “Human Action” for one dollar in a used bookstore.  

When Williams asked Deden about cryptocurrencies, he chuckled and said he couldn’t understand what they were.  He began buying gold around $250 an ounce. He then said something very interesting; he believes gold is cheaper today ($1,348.10 as I write) than when he first bought it.

So, it makes perfect sense that last year, “Global investment demand for gold dropped 23% last year, fueled by a decline in U.S. bar and coin demand to the lowest level in a decade, according to a report from the World Gold Council,” reports MarketWatch.com.  

With the stock market roaring and cryptocurrency prices soaring, “The U.S., in particular, suffered the biggest drop in bar and coin demand last year, to 39.4 metric tons—the lowest level since 2007, down from 93 metric tons in 2016.”

The yellow metal rose 13% last year, eliciting a collective yawn from crypto plungers, so “Last year, annual inflows into the gold-backed exchange-traded funds sank 63% to 202.8 metric tons.”

In a rare 2009 speech, Deden explained,

Despite a long rise in price since 2001, gold is actually quite unknown, misunderstood and feared. From the pension fund consultant and trustee to the man on the street, gold remains a relic of a bygone era. The rise of the finance economy in the last 30 years, the inflationary impact on asset prices that have masqueraded as capital gains and the general intellectual impoverishment of modern man have all contributed to our society having lost the skills we once had in detecting the devices and schemes designed to defraud – fraud and theft being the very evil nature of central banking.

He continued,

I now view gold not merely as insurance, but indeed as cash substitute. More than 45% of our net assets are in precious metals. Holding paper cash subjects me to credit risk, counterparty risk, foreign exchange risk, political and inflation risk. I can avoid most, if not all these, by substituting with gold. It simply means that I trust nominal money less and less.

The investing public believes it’s smooth sailing in the world of high-flying FANG stocks and ground-hugging interest rates, the doing of central banking bureaucrats.   Deden seeks “to have such a mixture so as to pursue a noble cause in the economic life of those I serve—capital owners and savers—that of seeking to protect their savings from the rent-seekers, the fools, thieves and assorted charlatans that clutter our world.”

With no gold, you are defenseless against these charlatans.