In the kingdom of finance, gold is like Varys
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In the kingdom of finance, gold is like Varys
A character analogy that bundles all the narratives behind gold.
Navigating Web3 tides with focused insightsThere are many people in the world who are hard to fully understand: rich in inner life, unpredictable, multifaceted and complex. Like my mom. If financial assets could be compared to people, gold would definitely fall into this category.
I've always felt that there's a fictional character who can encapsulate all the narratives behind gold. This character should have historical depth, experience twists of fate, possess a complex personality with multiple facets and reversals, and remain present throughout the long arc of the entire story.
So who exactly is it like? I've carried this idea for a long time but never found a perfect match—until this weekend, when I casually rewatched Game of Thrones and suddenly realized:
Lord Varys, the Spider, is an excellent analogy!
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Varys’s core character trait is that he claims to serve “the realm,” not any particular king or family. His power stems from information, secrets, and a network operating in the shadows—not from direct military or economic strength. His influence rises and falls with the stability of “the realm”: when things are calm, he can vanish into the background; yet at critical moments of power transition or systemic breakdown, he suddenly becomes a decisive force. He has been both a guardian of order and, for decades, ignored, overlooked, or even dismissed.
Isn’t gold exactly such a complex figure? Multifaceted, full of reversals, deeply tied to its era, constantly shifting its role and prominence across different macro phases.
Since the dollar was decoupled from gold in 1971, the world has entered the great era of “fiat money + floating exchange rates.” From then on, gold’s role in the grand narrative has become difficult to define:
It was downgraded from protagonist to key supporting character—not the king (the dollar), nor one of the powerful lords (tech stocks/risk assets)—but rather the ancient spymaster who never fully exits the stage. The true object of his loyalty isn’t any single ruler, but the continuity and stability of “the realm” itself—the very foundation of trust in the global financial system.
In ordinary times, he stays quietly in the corner, rarely seen on screen. But whenever a pivotal moment arises—during risk aversion, inflation hedging, dollar instability, geopolitical conflicts, shifts in belief about central bank omnipotence, secret accumulation or divestment by central banks, or simply the idea of a “psychological anchor”—gold suddenly returns to center stage. It carries countless narrative tags, each amplified by the market in turn depending on the phase.
If we understand gold as such a character, we realize its role in the macro narrative isn't merely that of a simple safe-haven tool or inflation hedge. Instead, within the deeper, underlying storyline of “credit–order–confidence,” it plays a subtle, intermittent, yet critically important part.
If gold is indeed this kind of character, then understanding it matters far more than trading it.
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This analogy actually works surprisingly well. Thinking about gold through Varys’s round, wise face somehow makes it easier.
Now, let Lord Varys star in the historical drama of gold since 1971:
Act One (1971–1980, 10-year bull market): Realm in turmoil, steps into the spotlight
On August 15, 1971, Nixon Shock. Bretton Woods collapses. The realm plunges into unprecedented chaos.
When the old order crumbles, Varys (gold), previously operating behind the scenes, suddenly becomes essential. With the currency no longer backed by the Iron Throne, the price of gold becomes a reliable gauge of the realm’s true disorder. People begin trusting Varys’s secret reports. Gold surges from $35 to $180 by the end of 1974.
In 1974, inflation wildfire spreads through King’s Landing. By early 1980, gold hits $680.
Act Two (1980–2002, 20-year bear market): Strong hand rules, retreats backstage
In 1980, Paul Volcker becomes Fed Chair. Like Tywin Lannister, Volcker uses iron-fisted policies (sharp rate hikes) to crush inflation and restore the king’s (dollar’s) authority. Faced with high interest rates, the "non-yielding ancient asset" gold loses appeal. A three-year bear market begins. Gold falls from $680 to $320. By 1997, the realm enjoys prolonged peace and prosperity (tech stock bull market). The great lords (risk assets) grow immensely wealthy and powerful.
In a realm governed by strong authority and stable order, the spymaster Varys (gold) becomes largely irrelevant. When everyone believes the Hand of the King can solve everything, no one needs Varys to interpret reality. He retreats into cellars and secret tunnels, nearly forgotten.
In 2002, gold drops back to $260—a twenty-year era during which “gold is dead” becomes conventional wisdom.
Act Three (2003–2012, 10-year bull market): Civil unrest within the realm, last sanctuary
Starting in 2003, a decade of low rates and low inflation ensues. The realm maintains superficial prosperity through borrowing and financial magic (low rates, credit expansion), while internal decay worsens—culminating in the 2008 financial tsunami. The king’s credit (sovereign credibility) faces unprecedented doubt.
Varys regains visibility. Gold enters a ten-year bull market. As the realm’s foundation shakes, investors seeking safety and central banks increasing gold holdings increasingly rely on Varys’s intelligence to protect themselves. At the peak of the 2008 liquidity crisis, some fund managers even use gold as a final settlement instrument. Years later, after the U.S. weaponizes SWIFT sanctions, Iran begins using gold in import/export trade—only Varys’s network can deliver reliable information and shelter amid the chaos of King’s Landing.
Ten-year bull run: gold climbs from $330 to $1,760 per ounce.
Act Four (2013–2018, 5-year consolidation): Brief respite, watching and waiting
After the crisis, central banks stabilize the situation with unprecedented measures (QE). The illusion of “central bank omnipotence” returns. Many believe the new power structure is solid. The gold market fluctuates wildly—falling from $1,650 to $1,060, then rising to $1,350.
Varys grows cautious again. He sees the fragility of the new order, but the timing isn’t right. He maintains presence in court without drawing attention. Gold trades sideways—Varys watches and waits.
Act Five (2019–present): Multiple kings, undercurrents, dual-layer game
In 2019, gold rises from $1,300 to $1,900, then continues to oscillate.
Oscillating until early 2024, when the story enters its final chapter. The realm now has no single center. The Dragon Queen from the Eastern continent (China's rise), northern geopolitical tensions—multiple powers emerge. The king (the dollar) faces dual challenges: internally (fiscal deficits) and externally (de-dollarization). Trump upends everything. Lords begin seeking new allegiances. Gold climbs from 2,000 to 4,000.
Varys’s intelligence network no longer just gathers secrets—it begins secretly transferring assets and building parallel alliances. Central banks around the world buy gold aggressively. Global central bank gold holdings surpass U.S. Treasuries for the first time—hidden gold reserves, a splintering global order, a leader unwilling to shoulder responsibility, strategic resources being weaponized—gold prices begin to decouple from traditional indicators (real interest rates, dollar strength). Varys makes secret moves in the shadows.
The current gold rally perfectly embodies Varys’s ultimate philosophy—not concerned with the short-term strength of the current king (the dollar), but focused on the potential collapse risk facing the entire “realm” (global financial system) due to power struggles ahead. Preparing for that coming “winter,” for a future where there may be no single king, by building a final refuge and shared value consensus.
Alright, enough. I can’t keep making this up.
But what does Varys have to do with us regular people?
From 1971 to today, gold has repeatedly shifted between front and backstage roles. Macro narratives have spun round and round like a ceiling fan. But as long as humans continue to question power and doubt credit, someone will always want to stash a few yellow metal bars under the bed.
So in a financial world that never stops churning and frequently reverses, you won’t get rich overnight because of it, nor will it set you free. But keeping a small allocation for Varys (Professor Dalio says 10%) probably isn’t a bad idea.
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