(Mike Maharrey, Money Metals News Service) Mainstream economists have been at war with gold for years.

And gold is winning.

Aaron Brown formerly served as head of market research for AQR Capital Management and now works as a columnist for Bloomberg. In a recent op-ed, he chronicled gold’s ongoing war with economists.

John Maynard Keynes fired the first salvo in 1923 when he declared gold a “barbarous relic.” He argued that the gold standard was a primitive monetary system that “enlightened modern economies” had outgrown. He believed the future belonged to fiat currencies managed by economic technocrats.

Of course, government people loved this theory because they want to control your money. Gold is a hindrance to big government spending. By tying the issuance of paper money to a fixed amount of gold, governments found it difficult to expand the money supply. This limited politicians’ ability to fund the burgeoning warfare/welfare state.

Round 1: Winner — The Economists

President Franklin D. Roosevelt began to put this idea into practice during the 1930s.

Needing to expand the money supply to support his spending plans, FDR decided to expropriate the public’s gold and add it to the national reserves. More gold meant the government could issue more paper money under the gold standard in place at the time. On April 5, 1933, President Franklin D. Roosevelt signed Executive Order 6102, effectively making private gold ownership illegal.

Americans were urged to turn in their gold for $20.67 per ounce. But six months later, FDR formally devalued the dollar by some 40 percent when he declared gold was worth $35 per ounce. This allowed the government to print even more paper money.

The West took another step away from the gold standard in 1944 with the Bretton Woods agreement.

The conference involved 730 delegates from all 44 Allied nations, hoping to establish a new international economic order to prevent the economic instability that had contributed to the Great Depression and the rise of fascism. Under the plan, Western currencies were anchored to the dollar, with the greenback convertible to gold at a set price of $35 an ounce. As Brown put it, Bretton Woods effectively demoted gold to a figurehead status.

“Gold was caged.”

Round 2: Winner — Gold

However, the yellow metal was still nominally involved in the system, and in the 1960s, it became problematic. As the U.S. ramped up spending for the Vietnam War and President Lyndon B. Johnson’s Great Society, the dollar began to devalue. In response, many countries started taking advantage of the dollar’s convertibility to gold, and metal began to flow out of the U.S.

This is exactly how a gold standard is supposed to work. It puts limits on the amount the money supply can grow and constrains the government’s ability to spend.

While gold was in a cage, it still served as a brake on U.S. money creation. When the government began to “print” too much money, other countries began to redeem the devaluing currency for gold. As gold flowed out of the U.S. Treasury, concern grew that the country’s gold holdings could be completely depleted.

In response, President Richard Nixon severed the dollar’s last connection with the gold standard in the Summer of 1971, making it a purely free-floating fiat currency.

In practice, Nixon ordered Treasury Secretary John Connally to uncouple gold from its fixed $35 price and suspended the ability of foreign banks to directly exchange dollars for gold. During a national television address, Nixon promised the action would be temporary to “defend the dollar against the speculators.”

As Brown noted, “economists mostly cheered.”

“Milton Friedman had long argued that floating exchange rates managed by disciplined central banks were superior to the gold standard’s rigidities. The profession was nearly unanimous: Gold was a historical curiosity. You couldn’t run a modern economy tethered to something you dug out of the ground.”

Nixon went on national TV to reassure Americans that all was well.

“Let me lay to rest the bugaboo of what is called devaluation,” he proclaimed as he promised, “Your dollar will be worth just as much as it is today.”

Brown called gold’s revenge “swift and embarrassing.”

“Within nine years, it had risen from $35 to $850 an ounce — a gain of more than 2,300 percent. The 1970s, which were supposed to demonstrate the superiority of managed currencies, produced instead stagflation and a dollar that lost more than half its purchasing power. Investors who held cash lost 87 percent of their real wealth. Those who held the barbarous relic quadrupled theirs.”

Round 3: Winner — The Economists

Fed Chairman Paul Volcker came to the rescue, driving interest rates to 20 percent to slay the inflation dragon. Gold fell from $850 per ounce in 1980 to $255 by 1999. This seemed to restore the credibility of managed money. Many European central banks sold off gold reserves. The Bank of England reduced its gold holdings by 395 tonnes. (Ironically, the gold sale came just as the market hit bottom.)

Round 4: Winner — Gold

Things looked good for the economists and monetary technocrats. But there were signs of trouble. It started with the dot-com bust and morphed into a full-blown financial crisis in 2008.

Gold climbed from $800 at the depth of the crisis to $1,921 by 2011. Brown said, “The economists’ institutions were visibly struggling.”

“Gold, which has no management, no board of directors, and no leverage, sat there looking smug.”

Current Round — Gold Is Winning

Brown called the current battle “the most consequential round in the modern era,” noting that its spark had nothing to do with inflation.

“It was about something more fundamental: whether dollar-denominated assets are truly safe.”

After Russia invaded Ukraine, the U.S. and its Western allies imposed aggressive economic sanctions, effectively locking Russia out of the global dollar system. This weaponization of the dollar was a warning shot for a lot of countries. As Brown pointed out, “Every non-aligned central bank got the message.”

“Assets held in dollars, euros or pounds could be confiscated. There was precisely one major reserve asset that could not be frozen by SWIFT, seized by court order or inflated away by someone else’s monetary policy. It cannot be hacked and it doesn’t require trusting any institution or government.”

That one reserve asset is gold.

Central banks have loaded up on the yellow metal over the last several years.

In fact, 2025 was the fourth-largest expansion of central bank gold reserves on record. The all-time high was set in 2022 (1,136 tonnes). It was the highest level of net purchases on record, dating back to 1950, including since the suspension of dollar convertibility into gold in 1971.

While central bank gold purchases declined to 863.3 tonnes last year, they were still well above the 2010-2021 annual average of 473 tonnes.

Late last year, gold surpassed Treasuries and now makes up the largest share of reserve assets for the first time since 1996.

Brown said this is effectively a vote of no confidence in the system the economists built.

“This is what separates the current gold rally from previous ones. Earlier bull markets were driven by retail investors and inflation fears. This one is being driven by sovereign institutions making a deliberate, long-term strategic choice. It is not inflation hedging. It is geopolitical insurance. And it is a vote of no confidence in the system Keynes and his successors built.”

Brown says this journey through time reveals a legible pattern.

“Gold doesn’t perform best when inflation is high. It performs best when trust in monetary institutions is low — when the world’s central banks look at their reserve assets and quietly conclude they would prefer something no government can confiscate.”

Brown concedes that Keynes was right about one thing: Gold’s monetary role is a convention, not a law of nature.

What he underestimated is how hard it is to replace a convention that combines liquidity, neutrality, durability, and freedom from political risk — especially when the institution maintaining the alternative is also the world’s largest debtor, the issuer of its own reserve currency and the aggressor in a major war. Gold has been making this argument for five thousand years. The economists have been rebutting it for about three hundred. The current score, on points, favors the metal.”

Mike Maharrey is a journalist and market analyst for Money Metals with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.