If inflation is taken into account, that cash may have lost value. It is recognized that gold has a history of long-term stability. It has had a completely paper-based currency for 45 years, while gold has been a global medium of exchange for more than 5000 years. After the gold standard, gold has become more volatile, but the legacy of its stability remains with us.
Since gold is the only international currency that cannot be degraded, people all over the world maintain it as a store of value. This makes gold the most stable currency in the long term. Since the 1930s, when the U.S. dollar slowly disassociated itself from gold, the dollar has lost 99% of its value against gold.
This is the destination of paper coins. In the Jastram chart you can see that in 1650 gold could buy exactly the same amount of products in bulk as in 1970, over a period of 320 years. Interestingly, the CPM Group chart shows a downward trend, while Jastram shows that the purchasing power of gold is practically constant over time. In practical terms, this has always been achieved, as closely as possible, by linking the value of the currency to gold and silver and, finally, at the end of the 19th century, only to gold.
This meant that a country with an external deficit whose imports exceeded its exports had to pay the difference by transferring gold to countries with external surpluses. Sweden gave up gold in 1931 and, in 1936, its industrial production was 14 percent higher than its 1929 level. Precious metals such as gold and silver were once the standard that backed countries' currencies, but now things are different. In the classic gold standard, which lasted until 1914, gold was officially money and therefore the unit of account.
Proponents of the shift to gold think of the United States acting alone (instead of waiting to coordinate a worldwide return to the gold standard). I'm not going to go into all the details of the video, but its central message is that the purchasing power of gold is always diminishing. Simply put, when gold miners increased production to literally make money, the money supply increased and the prices of consumer goods rose. However, according to a gold standard, the availability of gold limits the possibilities of expanding central banks' liabilities.
The standard deviation of inflation during the 53-year gold standard is almost double what it has been since the collapse of the Bretton Woods system in 1973 (indicated on the graph by the vertical red line). In the Jastram chart you can see that in 1650 gold could buy exactly the same amount of products in bulk as in 1970 over a period of 320 years. This would encourage people to stop mining gold and focus on producing consumer goods that could be sold at high prices. The gold standard—the common monetary system of Western civilization for 500 years before 1971, the monetary base of the Industrial Revolution, and the European domination of the entire world in 1914—was supposedly superstitious nonsense.