Why do central banks hold gold?

jmski52

It seems to me that central banks tend to discount gold and always talk it down. It's to their advantage to be able to create money out of thin air with no accountability, and to exercise fractional reserve lending as a means to accumulate capital from their own customers.

So, why do they bother to own gold? Asking for a friend.

blitzdude

Insurance, just in case.

derryb

for the very reason I have always advocated a stacker to hold it: fiat (dollar) insurance

When central banks transact with one another, gold is a payment of last resort.

Miami1025

If your friend wants deeper explanations. Try Richard J. Maybury’s a uncle Eric books on personal finance and money mystery. I recommend just getting the whole set for the discount , once you read one you’ll get the others. In short it’s a hedge, when government fiat money becomes worthless what are you gonna trade for food. It’ll be anything ppl. Need that can’t be created outta thin air.

drei3ree

@Miami1025 said:
If your friend wants deeper explanations. Try Richard J. Maybury’s a uncle Eric books on personal finance and money mystery. I recommend just getting the whole set for the discount , once you read one you’ll get the others. In short it’s a hedge, when government fiat money becomes worthless what are you gonna trade for food. It’ll be anything ppl. Need that can’t be created outta thin air.

Thanks Richard!

jmski52

In short it’s a hedge, when government fiat money becomes worthless what are you gonna trade for food. It’ll be anything ppl. Need that can’t be created outta thin air.

Are you telling me that Central Banks own gold as a hedge for food against the policies of the Central Banks that print money out of thin air - is that what you think this Maybury guy is saying? You think Central Banks are planning to hoard food now?

Clearly, I have no idea, but it sure does seem like that might be the case. The banks, and the people who own them are not really our pals.

If Central Banks own gold as insurance - insurance against what?

We know that IMF now considers gold a Tier 1 Asset. Why not just call it money, because isn't that what gold really is? Why the charade? Aren't we concerned with honesty and accountability?

ricko

Gold is money.... and banks hold it for that very reason. Cheers, RickO

TwoSides2aCoin

...In case of fire, pull wool over eyes.

Goldenage

There is a certain portion of the population that believes that bitcoin is money. If they had their way, they’d get everyone off dollars and gold so they could be in full control.

Central banks own gold because it can be traded for dollars. Central banks could be buying Michael Jordan rookie cards as they have value as well. They can buy whatever they feel has value. Land, gold, yachts, oil, etc.