[Analysis of the Economic Impact of Stable Gold (Part 3)]
3. Dramatic Changes in Financial Markets and Asset Pricing
1. Full Return of Gold's Monetary Function
Upgrade of Collateral Status: CME has accepted gold as margin for futures trading, and JPMorgan allows gold-backed loans. If gold is stable, its collateral range will expand to bonds, derivatives, and other fields, encroaching on the share of the US dollar.
Legalization of Payment Methods: Utah in the United States and Switzerland have legislated to recognize gold as legal tender, which can be used for tax payments and debt repayment. If promoted globally, the status of cryptocurrencies like Bitcoin will be challenged.
2. Revaluation of Asset Prices and Soaring Volatility
Asset Class / Short-term Shock / Long-term Trend
Stocks / Plummeting due to liquidity tightening / High-leverage tech stock valuation restructuring
Bonds / Jump in real yields / Differentiation of sovereign debt credit risk
Commodities / Industrial metals follow gold down / Agricultural products increase in price due to deflation
Historical Reference: After gold peaked at $1917 in 2011, US stocks outperformed gold prices by 300% over 10 years. A stable gold price will reverse this trend.