Gold is considered to be the ultimate store of money. In crises throughout history, gold has provided value and helped citizens preserve wealth.

Based on a superficial understanding of this idea, some analysts are questioning why anyone would still consider gold a safe haven when it failed to climb as Greece plunged into a banking crisis.

In reality, Greece is facing an economic crisis unlike anything we’ve seen before. Their currency, the euro, is still valuable. Euros just aren’t widely available in Greece.

The euro is a grand experiment where countries give up part of their sovereignty by joining a currency alliance. When one country suffers, it needs the consent of all other members to implement monetary policies that could alleviate suffering. Greece needs to devalue its currency and monetize its debt but Greece has no currency.

If Greece had a currency, we would probably not be seeing this crisis. Greece would simply be another nation with high debt whose central bank would be printing money. Instead we are watching a humanitarian crisis unfold, the type of crisis often seen when a nation loses its sovereignty.

Sovereign nations have defined borders, permanent populations bound by laws and are free from the control of other states. Greece’s finances are controlled by other states.

This is true for every country in Europe except Germany. Without sovereign powers over their finances, Greece’s political leaders are powerless to stop the crisis.

In this case, nothing can help the citizens of Greece except the European powers considering its fate. Gold in this environment has no value because it is priced in euros and Greece’s problems are not the euro’s problems.