But when the financial crisis came, everything became different. Because it is really possible for paper money to become paper, not because of the reduction of gold, but because of the impact of the financial crisis.
However, when people want to withdraw money from the bank, no amount of money can meet their requirements, because the bank has lent their money to others. When banks can't let depositors withdraw their money, they go bankrupt. In this way, all the deposits in this bank will disappear because of its bankruptcy, which will affect other banks. So many countries began to buy gold at that time, because gold can flow freely under the gold standard, so many gold holders could not stand it. Britain started first.
Then there is the role of gold in finance after World War II.
We know that the United States is the biggest beneficiary of World War II and has great strength. In the Bretton Woods system, the dollar is linked to gold, that is, an ounce of gold is equal to 35 dollars.
However, such a system was declared bankrupt again in the unstable economic turmoil in the United States in the 1960s. Now, on the one hand, gold is regarded as a means to preserve the value of natural persons in society. Some people, under the pressure of inflation, will buy gold to ensure that their money will not depreciate. Because gold is valuable at any time, it will depreciate with the depreciation of paper money.
On the other hand, the role of gold in the futures market. Gold is also hyped as a product in the futures market, and is favored by many people because of its rare value. Now the price of gold fluctuates in these markets.
Gold generally plays such a role in finance.