In the kingdom of finance, gold is like Varys.

There are many people in the world who are difficult to fully understand: rich in inner life, unpredictable, multifaceted, and complex. For example, my mom. If the assets in the financial world can be compared to people, gold should belong to this type of role.

I have always felt that there should be a film character who can encapsulate all the narratives behind gold. This character should have a sense of history, experience a tumultuous fate, have great ups and downs, possess a complex personality, and undergo multiple reversals, while also weaving through the long narrative of the entire epic.

So who does it really resemble? This thought has lingered in my mind for a long time, but I haven't found a character that fits perfectly. It wasn't until this weekend, when I had some free time and decided to rewatch “Game of Thrones,” that I suddenly realized—

The Spider Lord Varys is an excellent analogy!

01

Varys's core persona is: he claims to serve the “realm” rather than a specific king or family. His power is rooted in information, secrets, and a network that operates in the shadows, rather than overt military or economic strength; his influence fluctuates with the stability of the “realm”—when the realm is calm, he can retreat into the background as if he has vanished; but at critical moments of power shifts and torn order, he can suddenly become a key variable that affects the situation. He has been both a guardian of order and, for decades, overlooked and even underestimated.

Isn't gold also such a complex character? Multifaceted, reversible, with a strong sense of the times, constantly changing its “role” and position in different macro stages.

Since the dollar decoupled from gold in 1971, the world has entered a grand era of “fiat currency + floating exchange rates.” The role of gold in this entire drama has become difficult to define:

It has been downgraded from the protagonist to a key supporting role: it is neither the king (USD) nor the powerful and wealthy Lords (tech stocks/high-risk assets), but rather the ancient, never fully retired intelligence chief, whose true loyalty is not to any particular king, but to the continuity and stability of the “kingdom itself”—that is, the foundational credit of the global financial system.

Usually staying in the corner, not much in the spotlight, but whenever a key moment arises, it can suddenly make a comeback and steal the show — during times of risk aversion, during inflationary pressures, when the dollar is unstable, during geopolitical conflicts, when the market switches between strong and weak faith in “central banks’ omnipotence”, during central banks' covert accumulation and reduction, and regarding the concept of “psychological anchors” itself — gold carries a bunch of narrative labels, each of which is magnified by the market at different stages.

If you understand gold as such a persona, you will find that its role in the macro narrative is not merely that of a safe-haven asset or a simple hedge against inflation, but rather it plays a crucial yet sometimes elusive role in the deeper storyline of “credit-order-confidence” that can be vital in critical moments.

If gold is such a persona, then understanding it is definitely more important than trading it.

02

This analogy is indeed useful. Using Professor Walis's plump yet wise face to rethink gold seems to make it easier.

Now let's invite Teacher Walis to perform the historical drama of gold since 1971:

Act One (1971–1980, 10-Year Bull Market): Kingdom in Turmoil, Coming to the Fore

On August 15, 1971, Nixon's shock led to the collapse of the Bretton Woods system, plunging the kingdom into unprecedented chaos.

When the old order collapsed, the previously behind-the-scenes Valyrian (gold) suddenly became crucial. The value of currency lost the endorsement of the Iron Throne, and the price of gold became a reliable indicator of the true level of chaos in the kingdom. People began to trust Valyrian's intelligence reports, and the price of gold quickly rose from $35 to $180 by the end of 1974.

In 1974, inflation began to spread like wildfire in King's Landing, and the price of gold surged to $680 in early 1980.

Act Two (1980–2002, 20 Years of Bear Market): Strongman Iron Fist, Retires to the Background

In 1980, Volcker became the Chairman of the Federal Reserve, and Lannister Volcker quickly extinguished the wildfire of inflation with his iron-fisted policy (significant interest rate hikes), restoring the authority of the king (the dollar). In the face of high interest rates, the “non-yielding ancient asset” gold became less attractive, leading to a three-year bear market where the gold price fell from $680 to $320. In 1997, the kingdom ushered in a long period of peace and prosperity (the tech stock bull market), and the wealth power of the lords (risk assets) expanded dramatically.

In a kingdom with strong power and order, the role of the Master of Whisperers, Varys (the Golden), has been greatly diminished. When everyone believes that the king's hand is omnipotent, no one needs Varys to assess the situation anymore. He returned to the cellars and secret passages, almost forgotten by everyone.

In 2002, the gold price fell back to $260, marking a twenty-year period of “gold is dead.”

Act Three (2003–2012, 10-year Bull Market): Domestic turmoil in the kingdom, the final refuge.

From 2003, a decade of low interest rates and low inflation allowed the kingdom to maintain a facade of prosperity through borrowing and financial magic (low interest rates, credit expansion), while internal decay became increasingly severe, ultimately culminating in the financial tsunami of 2008. The king's credit (sovereign credit) faced unprecedented scrutiny.

The presence of Wallis is starting to be felt again, and gold prices are entering a ten-year bull market. The foundation of national credit is shaking, and investors seeking safe havens and central banks starting to increase their gold holdings - more and more people are beginning to rely on Wallis's information to protect themselves. During the peak of the liquidity crisis in 2008, some fund managers even used gold as a last resort for settlement. A few years later, the U.S. imposed SWIFT sanctions, and Iran began to use gold in its import and export business - in the midst of chaos, only Wallis's network could still convey reliable information and provide shelter.

In a ten-year bull market, the price of gold rose from 330 dollars per ounce to 1760 dollars.

Act Four (2013–2018, 5 years of fluctuation): A brief respite, watching the changes.

After the crisis, central banks in various countries used unprecedented measures (QE) to temporarily stabilize the situation. People once again developed the illusion of “central banks being all-powerful,” believing that the new power structure had solidified. The gold market has been volatile, dropping from $1650 to $1060 and then rising to $1350.

Varys became cautious again. He saw the fragility of the new order, but the time was not yet ripe. He maintained his presence in the court while avoiding any moves that might attract attention. With gold prices fluctuating within a range, Varys watched the situation change.

Act Five (2019–Present): Multiple Kings in Power, Under Currents Flowing, Double-Sided Game

In 2019, the gold price rose from $1300 to $1900 and then continued to fluctuate.

The story will continue to fluctuate until early 2024, entering its final chapter. The kingdom no longer has a single center; the Dragon Queen of the Eastern Continent (China's rise) and geopolitical conflicts in the North lead to the emergence of multiple forces. The authority of the King (the US dollar) faces dual challenges from within (fiscal deficits) and without (de-dollarization). The knowledgeable king begins to turn the world upside down, and various lords start seeking new objects of allegiance. Gold rises from 2000 all the way to 4000.

Varis's intelligence network is no longer just about collecting information; it has begun to secretly transfer assets and establish parallel alliances. Central banks around the world are buying gold in large quantities, and for the first time, global central bank gold holdings have surpassed US Treasury bonds—hidden gold reserves, a disintegrating global order, a leader that no longer takes responsibility, and the weaponization of strategic resources—gold prices are starting to decouple from traditional indicators (real interest rates, the US dollar). Varis is secretly laying out plans in the shadows.

The current rise in gold prices perfectly embodies Varis's ultimate philosophy — it does not matter whether the current king (the US dollar) is strong in the short term, what matters is the potential collapse risk that the entire “kingdom” (global financial system) may face in the future due to power struggles. Prepare for the arrival of that “winter” and establish a final refuge and value consensus for a future that may have no single king.

Alright, let's stop here, I can't continue.

What does Varys have to do with us ordinary people?

From 1971 to today, gold has repeatedly switched roles back and forth, with macro narratives coming and going in cycles, now transformed into an electric fan. But as long as humans continue to doubt power and question credit, there will always be someone wanting to tuck away a few pieces of yellow metal under the bed.

So in a financial world that is constantly in turmoil and occasionally reversing, you cannot become rich because of it, nor can you achieve freedom because of it. But leaving a small portion of your position for Varys (as Teacher Dalio said, around 10%) should not be a mistake.