Times: The dollar versus gold? No contest

Gold has retained its value, though with fluctuations, over centuries. Even now its purchasing power is not far distant from 300 years ago. Most paper currencies lost more than 98 per cent of their purchasing power in the 20th century alone. Last week gold reached $950 an ounce because the world is losing confidence in all the currencies issued by central banks, but particularly in the dollar. China and India both have a long tradition of hoarding gold, often in the form of jewellery, as a form of personal saving. The Chinese and Indian central banks already have more dollars in their reserve than they can possibly want. They know that the dollar is likely to depreciate over time. They suspect that the Americans will elect an inflationary president. Gold is a defence against inflation.