Gold has made a comeback as a de facto world currency

It was John Maynard Keynes who condemned the use of gold as money was a "barbarous relic", and it was he as much as anyone who liberated the world from currencies based on gold or, more unusually, silver, convertible by law from paper promises to hard metal on demand.

Since the final break of the US dollar's link with gold in 1971, the world has conducted its commerce on the basis of paper or fiat money, created by governments and, with central banks applying varying degrees of restraint, routinely debased through inflation.

Gold has had its ups and downs, but, long term, it has preserved value better than dollar bills or sterling banknotes. The $2 trillion (£1.2trn) of new money created by the US Federal Reserve since 2008 – and the proportionally larger, in relation to the size of our economy, £200bn "printed" by the Bank of England – was designed to create inflation and prevent deflation when the recession threatened to turn into a slump, with the spectre of falling prices and a rising real value of our enormous debts.

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