Germany: Rich in Stocks, Poor in Gold

In the financial world, Mohamed Aly El-Erian is well known. The Egyptian-American economist served as CEO of Pacific Investment Management Company (PIMCO) from 2007 to 2014, managing around $2 trillion USD under the Allianz Group umbrella.

Recently, El-Erian posted a tweet that caught the attention of Bloomberg analyst John Authers:

"What if stock-market gains were measured in gold instead of dollars? As John Authers notes, U.S. stocks denominated in gold have been in decline since the dot-com bubble burst 25 years ago. Stocks elsewhere have done even worse."

A single line that summarizes it all: Twenty-five years, no real gain-possibly even a loss.

The financial system continues to overflow. Paper money endlessly creates new investment opportunities, and central players-banks, fund companies, and asset managers-share a single market built on the illusion of permanent returns.

But when measured in gold, the illusion fades. Twenty-five years of promised performance vanish: zero. Negative.

Advisors, analysts, and pension planners thrive on high fees and rich bonuses, confident that few investors ever check the true numbers. Had they done so, they would have realized how little there was to gain and how much illusion filled the space between quarterly reports and reality.

Financial media celebrate higher stock prices, rising wages, and booming property markets as proof of prosperity. Yet the era of ultra-low interest rates and historic monetary expansion has disguised what was really happening: prices rose because money lost its meaning.

When measured in gold, apparent gains become losses. Stocks, homes, and even currencies like the euro or Swiss franc have all shed real value.

The supposed steady increase in wealth was a mirage-fueled by the Swiss National Bank's flood of liquidity and the accompanying era of negative interest rates. The "strong franc" has long since become a monetary fiction.The issue is not the market itself; it is the measuring stick.

Price growth is the wrong word. It is really purchasing-power decline. El-Erian captures it perfectly: gold doesn't rise; everything else falls.

Measured honestly, twenty-five years of promises deliver nothing. A handful of physical gold coins, quietly stored, outperformed the sophisticated products of the entire wealth-management industry.

While Swiss banks like Credit Suisse and other "pillars of stability" collapsed, unrefined metal kept its value-without balance sheets, scandals, or bonuses.

Gold pays no interest or dividend because it is money. Its return is not an illusion of compounding but the preservation of purchasing power across generations.

In a world of synthetic finance, that unchanging fact makes it more valuable than ever.

Perhaps that is the real lesson of the past quarter century: gold exposes the truth that paper prosperity tried to hide.

Before joining Von Greyerz, he studied business administration and worked in asset management at Credit Suisse in Zurich and Singapore. His expertise lies in tailored precious-metals solutions for European investors and strategic gold allocations in Asia.