The crypto crash carnage is evidence that governments around the world are at war with bitcoin and other cryptocurrencies.

Over the weekend, bitcoin tumbled 50% from its April peak.  Ethereum’s crypto coin and dogecoin were both down 60% from their highs of just days earlier.  On Twitter, Mark Cuban dubbed the collapse “The Great Unwind.”

It is early, but this war, so devastating already for cryptocurrency speculators, makes a powerful argument for gold as an unparalleled store of value and a hedge against inflation.  That is because gold doesn’t just exist in cyberspace.  It is tangible.  Unlike both the dollar and cryptocurrencies, it cannot be created or destroyed on a keyboard somewhere.

And unlike digital currencies, when the government declares war on gold, it goes up!

The amount of gold is not exactly fixed, but it grows very slowly year by year with new mining.  The number of digital currencies is unlimited.  From none not so many years ago, now there are more than 10,000, with more popping up all the time.  Some of them have been classic “pump and dump” schemes.  Others, like dogecoin, were created as a joke to begin with.  Even Facebook, hoping to exploit its huge reach, launched a digital currency a few years ago, one that is now all but forgotten.

China, which has created its own cyber yuan, a government-sponsored digital currency, is not prone to tolerate competition.  It was among the first nation-states to move against cryptocurrencies, outlawing their use in many financial applications.

RELATED: De-dollarization, the Cyber-Yuan, and Gold!

The Federal Reserve is hard at work creating a fedcoin.  The full-tilt U.S. government war against would-be fedcoin competitors is just getting going, but the IRS is positively salivating at the thought of taking a bite out of bitcoin owners.

James Rickards calls the war against digital currencies “death by a thousand cuts.”  Others see it coming as well.  Economist Robert Wenzel says, “The Fed/government is just not going to allow a digital currency to compete with a Fedcoin.”  According to CNBC, JPMorgan reports that large institutional investors were dumping bitcoin and moving to gold.

Governments far and wide have gone to war with gold many times.  They have tried to suppress gold and failed.

When President Roosevelt made the ownership of monetary gold by the American people a crime, he was successful in devaluing the dollar.  Gold went up.

When President Nixon repudiated America’s promise to always redeem U.S. dollars with gold, gold went up.

When the U.S. Treasury and the International Monetary Fund tried to suppress the gold price by auctioning off millions of ounces in the 1970s, the dollar fell.  The price of gold went up.

That is because gold is a superior store of value and wealth preservation.  As if to make the point, among a stack of headlines on the Drudge Report about the crypto-crash, one headline stood out.  It simply asked if this is “The Summer of Gold?”

With the Consumer Price Index climbing at a 7.5% annual rate, it sure looks like it to us.

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