I don’t buy it. The “yellow metal” is also subject to the rules of economic supply and demand. If a huge supply was suddenly found in some mountain that was easy to retrieve the “true” value would drop, not stay constant. Likewise if industry suddenly had no demand for gold for making things the “true” value of gold would also drop.
The picture is much more complicated than the author’s statement.
Ahhhh.... What a perfectly wonderful word these two letters make!
If sand were water, the deserts would be lakes!
If gold weren't rare, it would be ordinary! You qualify for today's MASTER OF THE OBVIOUS award!
If that theory were to hold true, then the price of gold would go up/stay steady, but rarely go down. On the other hand, I cringe when the experts talk about how all those slave-labor communist goods flooding the country “keep inflation low.”