Bitcoin is perfect, since the supply is rigidly defined by mathematics. Unfortunately we are still a long way from accepting bitcoins as a common reference. Until then, a new gold standard could be established as the common reference, the true credit-risk-free asset against which all currency credit risk is determined and the corresponding true credit-risk-free rate is calculated.
Gold generates no intrinsic return, as rightfully pointed out by gold antagonists; but herein lies its most important qualification as the common credit-risk-free benchmark. I doubt we will ever return to the old gold-standard. But the new gold standard could take root in this framework.
At the time of publication, Bo Peng was long gold.
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