Fiat Currency Fails as Gold Shines in Yen Intervention

The recent intervention in the Japanese yen by the US and Japan has raised questions about the role of fiat currency. Two Japanese savers, one who left their money in yen and another who bought gold, show the importance of diversification.

Over a decade, the gold holdings rose 375%, while the yen fell apart. This demonstrates that the value of gold comes from its ability to hold its ground against inflation, rather than any inherent worth.

The US joined Japan in buying yen on the open market, with estimates suggesting a cost between $53 billion and $90 billion. The Trump administration intervened to prevent Japan from dumping billions of US debt into the market, which could have had far-reaching consequences for the global economy.