Gold Is Being Spent

And that’s why it’s becoming money again

In the late summer of 1947, my family ran.

We are Punjabi. My family was forced to migrate under threat of Muslim on Hindu violence to India. My grandmother carried her children and ran from mobs, leaving behind a life that could not be packed or priced.

She didn’t carry bonds.

She didn’t carry a bank cheque book.

She didn’t carry grains or silk.

She carried gold.

Not because it was tradition.

Because it was survival.

And that gold did not sit idle.

It paid for the first meals.

It secured shelter.

It was pawned to fund my father’s education.

It did exactly what it was supposed to do.

It carried value across collapse,

converted into liquidity when needed,

and rebuilt a life on the other side.

Had those earrings not been there—or had they not been gold—my father would likely have been hawking vegetables.

I would not be writing this.

That is the return on gold.

And what came after was not just survival.

It was a reset.

A new life, funded by something that held its value when everything else failed.

The gold was spent.

The value was not.

Gold was not wealth.

It was continuity.

And if you zoom out far enough, that same pattern—personal then, sovereign now—repeats with almost uncomfortable precision.

When a system comes under pressure—war, fiscal collapse, or external shock—it does not abandon gold. It reaches for it. Gold sits at the very end of the hierarchy, untouched in normal times, but decisive when survival is at stake.

In crisis, assets reveal their true order.

Illiquid gets trapped.

Liquid gets volatile.

Political gets constrained.

Only neutral gets spent.

That last category has only one asset.

Gold.

One of the clearest examples comes from Second Punic War. Rome was pushed to the brink after a series of devastating defeats. Entire armies were wiped out, allies were wavering, and the cost of rebuilding both military capacity and political cohesion was immense. Revenue flows were insufficient, and time was not a luxury the state had. In response, Rome mobilized its reserves—drawing from temple treasuries, melting accumulated gold and silver, and converting them into coinage to fund the war effort. Wealth that had long been symbolic and sacred was turned into liquidity. This was not collapse; it was conversion. And it worked. Rome stabilized, endured, and ultimately emerged as the dominant Mediterranean power.

A similar dynamic appears centuries later under Heraclius during the Byzantine–Persian wars. The empire was under extreme strain, with territory lost and finances deteriorating rapidly. Heraclius made the politically and religiously difficult decision to strip gold and silver from churches, melt them down, and mint coin to finance a final campaign. Once again, assets considered untouchable in normal times were mobilized because the system had no other viable options. And again, this act bought time—enough for the empire to mount a successful counteroffensive and stabilize itself.

You don’t have to go that far back. A modern and far more relevant example sits with India in 1991. Facing a balance of payments crisis, India quite literally ran out of dollars. Imports were at risk, credibility was collapsing, and external funding had shut down. What followed was politically painful and nationally embarrassing: India pledged its gold reserves—physically shipping them abroad—to raise emergency liquidity. It was not a choice made in strength. It was a necessity forced by arithmetic. But that act bought time. And that time enabled reform. What followed was not decline, but transformation—the post-1991 liberalization that reset India’s economic trajectory.

This is the pattern, stripped of ideology. Gold is not what you sell when you are wrong. It is what you use when you have no time left.

Now bring that forward into the present, because what we are seeing today is not random selling. It is structured. It falls into three distinct regimes.

Call it The Three Faces of Gold Under Stress.

First, Gold as Liquidity — The GCC Model. Surplus systems don’t break easily, but when cash flow tightens, they need immediate liquidity without destabilizing their broader balance sheet. The GCC historically recycled oil revenues into gold, U.S. Treasuries, and strategic assets in the West. But in crisis, those assets behave very differently. Selling trophy assets—football clubs, marquee stakes—is slow, politically visible, and value-destructive. Incremental equity sales collapse marginal pricing. U.S. Treasuries, while liquid, are not entirely neutral in a world where security and finance intersect. That leaves gold as the only asset that is deep, liquid, and apolitical.

Every other asset has a market.

Gold has a clearing price.

Everything else is sold at a discount in stress.

Gold is sold at a price.

If a sovereign were forced to sell a marquee asset like McLaren in stress, it would clear at a discount—possibly a severe one. But gold, even when sold in size, clears at a global benchmark price. No negotiation. No stigma. No cascading collapse in marginal value.

When the GCC sells gold, it is not distress—it is precision. It is extracting liquidity from strength without breaking anything else on the balance sheet.

Second, Gold as Bridge — The Turkey Model. Here the system is already under pressure. External deficits, currency instability, and constrained access to dollar funding force action. Gold is sold to raise dollars, and those dollars buy time—time to stabilize the currency, manage imports, and prevent disorder.

And this is not incidental.

Over the last five years, Turkey has been one of the most aggressive official buyers of gold globally—accumulating roughly 400–500 tonnes of gold reserves between 2018 and 2023. That stockpile did not sit idle. It became a usable buffer when external pressure intensified.

This is not a view on gold.

It is a function of preparation.

Gold becomes the bridge between stress and stability.

Third, Gold as Power — The Russia Model. This is not about liquidity or survival. This is about architecture. Russia is not selling gold to access the dollar system; it is using gold to bypass it. Gold is redirected into alternative settlement systems, exchanged for yuan, or absorbed domestically. This is not supply flooding the market—it is supply being redirected and, in many cases, removed from global float. Gold here becomes a monetary base for a parallel system. Not a reserve. Not a hedge. A foundation.

Three different motives. Three different systems. One identical conclusion.

Gold is the only asset that survives all three.

And the next set of countries is already visible. South Africa has a tangible buffer—it has gold. That gives it optionality. It can convert reserves into time if needed. But countries like Pakistan or Sri Lanka operate with far less room. When pressure builds, adjustment is sharper and more disorderly because the cleanest lever—gold—is limited.

That asymmetry is the real story. Gold is not just a reserve. It is optionality under stress.

And this is where the market gets it wrong. Gold selling is framed as bearish, as if supply defines value. But the fact that gold is the asset being sold—across all three regimes—tells you something far more important. It is the only asset that can be mobilized at scale, under stress, without collapsing its own price or signaling systemic failure.

Even when prices soften, that softness is misleading. Because unlike equities, private assets, or strategic holdings, gold does not gap down under pressure. It clears. Continuously. Globally. Credibly.

Watch what happens the next time the dollar tightens sharply.

Not what countries say—what they sell.

That difference is everything.

So step back and strip away the noise.

Every system under stress is doing the same thing. Not the same trade—the same choice. Selling what is political. Avoiding what is fragile. Holding on to what cannot fail. And when nothing else works, they reach for gold.

Not Treasuries. Not equities. Not promises.

Gold.

That should tell you everything about what money really is.

Because in theory, U.S. Treasuries are the safest asset in the world.

In practice, they are still someone else’s liability.

Treasuries require trust in the system.

Gold is what remains when that trust breaks.

And in a world that is fragmenting, that difference stops being academic. It becomes decisive.

Because I have seen what happens when the system disappears.

In 1947, my grandmother didn’t carry financial assets.

She carried gold.

And had those earrings not been there—or had they not been gold—my father would not have completed his education.

He would likely have been hawking vegetables.

I would not be writing this.

That is what gold is.

By Vikas Sehgal

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