2024 Annual American Bullion Scholarship Winner Is Announced!

American Bullion is proud to announce the winner of the 2024 Annual Scholarship Essay Program! If you are considering entering or wondering how to win a scholarship of your own, read the essay below to learn more. Winners are selected from qualified entrants each year, and the entry of a winning student can help you learn how to get a scholarship of your own.

A college scholarship of $1,000 has been awarded. Well over 3500 applications were received in total and the talented student below was awarded a scholarship worth $1,000. Applicants were asked to write an essay answering the question, “Why do Central Banks historically trust Gold?” Participating students offered a wide range of viewpoints, each with its own approach and opinion. American Bullion is proud to award this scholarship to the deserving student below. The 2024 winner is:

Zein Waheed Alsaadawi – University of Michigan – Dearborn

“I am an Iraqi-Lebanese senior majoring in Accounting at the University of Michigan-Dearborn. With a passion for numbers and financial strategy, I aspire to contribute to the business world by promoting transparency and efficiency in financial practices. I am honored to have won the 11th Annual American Bullion Scholarship Essay Contest, which

reaffirmed my dedication to academic excellence and my belief in the transformative power of education. I am deeply grateful for this recognition and the support it provides as I work toward my goals. Thank you for inspiring students like me to keep striving. Once again, thank you for this incredible recognition and the generous $1,000 award, which will greatly support my academic journey.”

Nevtan Akcora, Co-Founder and President of American Bullion said, “I
am very happy to see the number of applicants to our annual scholarship contest continue to increase each year. And I am very excited to see that so many millennials understand the potential and importance of alternative investments, such as gold and other physical precious metals. Again, I’d like to thank all of the participants for their submissions in this year’s competition and wish the best for all in their academic endeavors and beyond.”

Winners’ Thoughts & Essay

Zein Waheed Alsaadawi – My name is Zein, and I am an Iraqi-Lebanese senior majoring in Accounting at the University of Michigan-Dearborn. With a passion for numbers and financial strategy, I aspire to contribute to the business world by promoting transparency and efficiency in financial practices. I am honored to have won the 11th Annual American Bullion Scholarship Essay Contest, which reaffirmed my dedication to academic excellence and my belief in the transformative power of education. I am deeply grateful for this recognition and the support it provides as I work toward my goals. Thank you for inspiring students like me to keep striving. Once again, thank you for this incredible recognition and the generous $1,000 award, which will greatly support my academic journey.
Essay: “Why do Central Banks historically trust Gold?”
Gold has played a pivotal role in the global economy for thousands of years. Central banks, which are responsible for managing their respective nations’ monetary policies, have long relied on gold as a cornerstone of financial security. Even today, in a world dominated by fiat currencies, gold remains a significant asset on the balance sheets of central banks worldwide.

The historical trust in gold is not accidental. It is grounded in gold’s enduring qualities, its role as a hedge against economic instability, and its intrinsic value, which have all contributed to its continuing prominence in central banking policies. One of the primary reasons central banks trust gold is its remarkable stability over time. Unlike paper money, which can lose value through inflation or manipulation, gold retains its intrinsic worth. Throughout history, gold has maintained its purchasing power even during periods of economic crisis, making it a reliable store of value. Gold is also a universal asset. It is recognized and valued in every country and across all cultures. This global recognition is crucial for central banks because it allows them to hold an asset that transcends political boundaries and national currencies. In times of global uncertainty, gold is a universally accepted medium of exchange, and its liquidity provides central banks with a powerful tool to manage financial risks.

Another key reason central banks trust gold is its role as a hedge against inflation and currency depreciation. In a fiat currency system, where money is not backed by a physical commodity, central banks have the ability to print money at will. While this can be useful in addressing short-term economic problems, it can lead to inflation if the money supply grows faster than the economy. As inflation rises, the value of paper money declines, eroding savings and purchasing power. Gold, however, is immune to inflation. Its supply is limited and cannot be artificially expanded by governments or central banks. As a result, when inflation increases and fiat currencies lose value, gold prices typically rise. This inverse relationship between gold and inflation makes it an attractive asset for central banks seeking to preserve the value of their reserves. For this reason, many central banks increase their gold holdings during times of economic uncertainty or when inflationary pressures are high.

Central banks’ trust in gold is also rooted in history. Throughout much of modern economic history, gold was the foundation of the global monetary system. Under the gold standard, currencies were directly tied to the value of gold, which provided a stable and predictable framework for international trade and economic growth. While the gold standard was abandoned in the 20th century, gold has never lost its importance as a financial asset. During times of crisis, central banks often revert to gold as a safe haven. For example, during the global financial crisis of 2008, central banks around the world increased their gold reserves as confidence in fiat currencies waned. Similarly, during periods of geopolitical instability, gold is seen as a safe and reliable asset, free from the political and economic risks that can undermine paper currencies. Moreover, gold’s resilience through millennia has fortified its trustworthiness. It was used as currency in ancient civilizations like Egypt and Rome and has been central to economic transactions throughout the Middle Ages and into the modern era. This long history provides confidence to central banks that gold will continue to hold value, even as other forms of wealth fluctuate or fail.

Central banks manage vast portfolios of assets, including foreign currencies, government bonds, and other financial instruments. Holding a portion of these assets in gold provides a way to diversify and reduce risk. Gold’s low correlation with other asset classes means that its price movements are not strongly linked to the performance of stocks, bonds, or real estate. In fact, gold often performs well when other assets are underperforming, particularly during financial crises. This diversification benefit is one of the reasons central banks maintain gold reserves, even as they also hold large amounts of foreign currencies like the U.S. dollar or the euro. Gold acts as an insurance policy against the volatility and unpredictability of global financial markets. For central banks, gold also represents a form of strategic reserve. Unlike foreign currencies, which can be influenced by the monetary policies of other nations, gold is a sovereign asset. No government or central bank can devalue or manipulate gold in the way that it can with fiat currencies. By holding gold, central banks can protect their nation’s wealth from external economic pressures and maintain greater control over their financial destinies. This aspect of national sovereignty is particularly important for countries that face geopolitical risks or sanctions. For example, countries like Russia and China have significantly increased their gold reserves in recent years as part of their efforts to reduce reliance on the U.S. dollar and build more independent financial systems. Gold provides these nations with a tangible asset that is beyond the reach of foreign governments or international institutions. Central banks historical trust in gold is rooted in its unparalleled qualities as a stable, universally recognized, and intrinsically valuable asset. Gold has proven itself as a reliable store of value, a hedge against inflation, and a safe haven during periods of financial and geopolitical instability. Its role in diversifying central bank reserves and its strategic importance in maintaining national sovereignty further solidify its place in modern financial systems. In an era where fiat currencies can be easily manipulated and economic uncertainties abound, gold remains a crucial asset for central banks. Its historical precedence, coupled with its enduring value, ensures that gold will continue to play a vital role in global financial stability for years to come. As central banks navigate the complexities of modern economics, their trust in gold endures as a testament to its lasting importance in the world of finance.

The views and opinions expressed in the above essays are those of the authors and do not necessarily reflect the views of American Bullion, Inc., its affiliates, or its employees. American Bullion does not guarantee the information’s accuracy or completeness, and does not recommend that the information serve as the basis of any investment decision.
Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.