FAST FIVE: US Dollar Devalues By 99% Vs Gold In 100 Years As Gold Price Crosses $2,067
Note, the chart below has a log scale.
This is due to Gresham's law, which states “bad money drives out good.” If the price of gold rises central banks are more inclined to hoard gold (good money) and spend currency that declines in value (bad money).
You might think that dollars with interest, for example US government bonds (Treasuries), would have outperformed gold since the gold standard was abandoned in 1971.
After the Second World War the US government capped interest rates at very low levels while boosting inflation.
Owning physical gold stored outside the banking system offers protection of your purchasing power from currency debasement.