Central Banks are now the No. 1 Buyer of Gold in the World
jmski52
Posts: 22,899 ✭✭✭✭✭
Doesn't this mean that the Central Banks are betting against their own currencies?
(credit - Gregory Mannarino)
The Central Banks are destroying the value of people's savings - and they know it, but they're buying gold - to save their own skins when the market crashes.
They are betting against their own debt-based system. Ain't that peculiar? 
Q: Are You Printing Money? Bernanke: Not Literally
I knew it would happen.
I knew it would happen.
0
Comments
they prefer you call it a hedge. LOL
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Wouldn't a definition of "corruption" be the act of saying one thing, while doing the exact opposite?
I knew it would happen.
Sounds more like the definition of "hypocrisy".
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
I always thought PerryHall was the #1 buyer of gold
jdimmick;Gerard;wondercoin;claychaser;agentjim007;CCC2010;guitarwes;TAMU15;Zubie;mariner67;segoja;Smittys;kaz;CARDSANDCOINS;FadeToBlack;
jrt103;tizofthe;bronze6827;mkman;Scootersdad;AllCoinsRule;coindeuce;dmarks;piecesofme; and many more
They're hedging (or betting against if you prefer) the U.S. dollar which they hold as reserves.
Do they fear devaluation or theft of those reserves? Or both?
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
I participated in an economics discussion forum for a long time during the 2000s and we had discussed this matter in great detail. At the time of the discussions, it was concluded that gold is held as a hedge against monetary chaos; i.e., the U.S. dollar rapidly losing a tremendous amount of purchasing power. There were various countries that were on friendly-ish terms with the U.S. who hedged their holdings of U.S. dollars and U.S. Treasuries with gold. Some nations seemed to follow some sort of formula where a certain percentage of their central bank reserves were denominated in gold bullion. I believe that percentage was 2% or 4% and the nation I tracked which seemed to follow that formula relatively closely was Singapore.
With the U.S. weaponizing SWIFT and foreign holdings of U.S. Treasuries, countries that are on the outs with the U.S. are increasing their gold reserves to protect themselves against asset seizures (without due process) and loss of purchasing power. For those countries that are less economically isolated from the U.S. such as China, they still maintain a fair amount of U.S. Treasuries holdings.
For the time being, there is still no single economy outside the U.S. that is large enough, liquid enough, trustworthy enough, and free enough (convertability) to be able to issue enough currency and bonds to serve as a primary reserve asset for a global economy. There is no such thing as a Euro bond (you have German bonds, French bonds, Italian bonds, Spanish bonds, etc.); China's yuan is not convertible; and the other economies are not large enough to supplant the U.S.
However, economic blocs such as BRICS are perhaps trying to create an alternative to the U.S. dollar system. The success of such a system and mass adoption by countries that are considered U.S. allies would have serious ramifications on the purchasing power of the U.S. dollar. It is perhaps the primary reason that the U.S. still has roughly 8,333 metric tons of gold bullion even though Ben Bernanke once said it's only kept for purposes of "tradition."
No, it's kept as a monetary/economic fire extinguisher encased in a glass housing. If hyperinflation breaks out, break glass and immediately tie the U.S. dollar to the gold the country possesses either on a full or fractional basis. A hyperinflationary spiral should immediately be stopped by such an action.
IMF classified gold as the only other Tier 1 asset besides US Treasuries about 5 years ago. The handwriting was already on the wall then, and the reason was the uncontrollable expansion of debt in the world economy.
I knew it would happen.
Why Central Banks Buy Gold
Spoiler alert: For the same reasons you and I buy gold.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Like that happens alot 🙄👎
Dollar insurance. MWK understands this.
This is why BRICs will grow and develop new dollarless transactions. BRICs is simply blowback from US weaponization of the dollar. US policy once again is a shot to the its foot.
And they are succeeding. There will eventually be no international reserve currency.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Where do most countries store their gold reserves now?
The impression I have is it's not locally, but with a developed country such as the US or UK. Maybe other members of the "rules based order"? A lot of good that will do. Look at Venezuela.
I agree there is a likely diversification incentive due to currency weaponization, but not just the USD, also the Euro.
Concurrently, there aren't that many places that I'd consider stable to store it locally.
Another target for a good old-fashioned sacking, ancient style. I expect increasing chaos as the post WWII order breaks down.
That’s a good point. Central banks buying gold while managing fiat currencies definitely raises some questions. Gold has always been a safe bet during times of inflation and uncertainty, so it makes sense they'd stockpile it with the way things are going. It might seem like they’re betting against their own currency, but in reality, they’re probably just preparing for any economic turbulence ahead. Gold has always been a reliable asset in a crisis, so they’re likely just covering their bases.
It’s probably a bit of both. Central banks are likely concerned about the devaluation of their currency, especially with inflation and economic uncertainty. Gold acts as a hedge against that. There’s also the risk of political instability or theft of reserves, so having something tangible like gold, which is harder to seize or mess with, gives them more security. Gold’s always been a safe bet during tough times, so it makes sense they’d turn to it.
It might seem like they’re betting against their own currency
It might seem that way, because it is that way.
I knew it would happen.
dollar (currency) protection.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
It’s kinda hard to hedge with anything else. NFTs ?
When a central bank increases its bet against its own currency, users of the currency should pay attention.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
We have a congress person who wants to sell some of the U.S. gold for bitcoin. Sounds like one of the geniuses in Great Britian. Supposedly the US has 200,000 bitcoins from seizures, no need to buy it, or crash the gold market, if you can take it for free from criminals.
My US Mint Commemorative Medal Set
Or click a button create a glitch and suddenly create 2,000,000 more. LOL THKS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
If you know how to create a glitch like that, please let me in on your secret.
My US Mint Commemorative Medal Set
create a glitch and suddenly create 2,000,000 more. LOL THKS!
Poof more Imaginary dollars into existence and use them to buy more magical bitcoin. What's the difference?
I knew it would happen.
THERE CAN BE NO CLEARER SIGN OF THE END OF AN ECONOMIC ERA THAN WHEN THE RESERVE CURRENCY DECLINES BY 99%.
Those who have been fooled into denying the slow motion destruction are simply frogs in a boiling pot.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
It hasn't fallen by 99% and a slow decline is not incompatible with being a reserve currency.
Since the U.S. economy continues to grow...since we are the envy of the world...since we have the largest, most liquid stock and bond markets in the world.....your continued belief that it is 1979 all over again with Jimmy Carter and G. William Miller at The Fed is ridiculous.
One of the BRICs -- the "R" in the BRIC --- is on the verge of economic collapse.
The ruble is back to March 2022 lows....interest rates are at 21%....the economy is about to implode....oil revenues are dropping (already down 50% YoY) and set to go lower where Russia can't make any $$$ from exports if the price goes into the $40's or $50's as Rosneft's CEO has told Putin.
No, I don't think a BRIC currency is better than the dollar.
show me your numbers.
slow decline is by design so that the user does not wake up.
My vision is much wider. Think "Rome."
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
To be fair, the USD has not fallen by 99% since Nixon's ended the convertability window. You need look no farther than the price of housing in "sane" parts of the country. I think the USD has fallen about 90% since 1971. Still a dreadful loss of purchasing power but the difference between a 90% loss and a 99% loss is that to get a 99% loss, you have to lose 90% and then lose 90% again.
after further research looks like 90-99% devaluation since Nixon removed the gold standard in 1971. Regardless, the dollar is fading towards zero. You can keep chopping anything in half until it takes a microscope to continue. FED continues to keep dead money alive with its trickery and smoke and mirrors. Let's just hope there is a good PLAN B when their fading PLAN A runs out of steam.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Good thing we earn a heck of a lot more dollars in 2024 then we did in 1971. BOOMIN! RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
No different than adding zeros to the currency.
Fooled zimbabawans for a while. . . until more zeros were needed. Eventually there's no room for zeros unless you increase the size of the not. LOL
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
.> @derryb said:
If only we can get that dictatorship or oligarchy thing going......are we getting closer?
Knowledge is the enemy of fear
don't need it, our system has economic collapse under control:
From the FED's Eccles Building Panic Room
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
That website is a mess.
Knowledge is the enemy of fear
It provides news links on an economy that is a mess. What did you expect.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
https://fred.stlouisfed.org/series/GDPDEF
Starting in 1970 I see a 6-fold rise in the GDP Deflator, the best measure of inflation/deflation. So the dollar has lost about 85%.
That still is better than most currencies and again it is NOT a problem because the U.S. must print excess dollars since the demand for dollars is not only domestic but global. We are the reserve financial currency and that means the supply of dollars must be greater than pure U.S. domestic demand. It also means we will run a Trade Deficit in goods/services but a Capital Account surplus in financial assets.
People who focus strictly on the dollar's rise or fall are missing the entire state forest for a single blade of grass.
A car which never leaves the garage will not need gasoline or new oil for years or decades. Does that mean it is better run than one which is used daily and needs occasional gas fillups and oil changes ? Of course not....it means the car is being used as intended, to transport people, not to sit in a garage.
Similarly, the dollar faciliatates U.S. and global GDP growth. The U.S. economy is the envy of the developed world.
.
Has ANYONE on this forum written that a "BRIC currency is better than the dollar" ?
.
Agree, they should focus on what it buys in the US, not how many euros it can buy. DXY is irrelevant to the grocery store shopper unless the local Publix starts accepting euros.
And if both cars are the same make and model which of the two cars has the highest value?
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
For now there is no BRIC currency. When it appears it will be better than the dollar for the countries using it as a medium of exchange. It will be free of US political influence. Holding US bonds/debt has become riskier for eastern nations. Unlike the euro that replaced european currencies, it will be a secondary currency for use in international trade.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Will it be free of its own members political influence?
Knowledge is the enemy of fear
Unlike the US they have yet to use any currency as a political weapon.
The "get in line or we'll steal the treasury bonds you bought" has so far been limited to the mighty reserve currency. BRICs is proving it ain't so mighty.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Is the US perfect? No. Is the dollar perfect? No. But good grief, put the pipe down man. We are still the greatest country in the world and the only superpower. To pretend that we shouldn't use our power and influence is just dumb, and to pretend that countries like China and Russia are morally superior is even dumber.
Philippians 4:4-7
look who's pretending. LOL
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Martin Armstrong documents what the Romans did to their own currency and how that contributed to the downfall of Rome. There are quite a few parallels besides the money.
I knew it would happen.
So you think if the Yuan or the Ruble were the world's reserve currency China or Russia would be more altruistic than the United States? Malarkey
I like both gold and silver, but I don't wish for the downfall of the US in order to make them go up.
Philippians 4:4-7
you think if the Yuan or the Ruble were the world's reserve currency China or Russia would be more altruistic than the United States?
Nobody said that.
I don't wish for the downfall of the US in order to make them go up.
Nobody on this forum has ever said that, either.
I'm not so sure that there needs to be a "world reserve currency", and there is no good reason to threaten other countries if they opt not to trade in US dollars. I think that competition in currencies might be optimal if you consider the underlying policies of the issuer to be important, for instance - in determining fair value for fair value. Wouldn't it be much better to offer a more competitive product or service than to threaten someone if they don't buy from you?
The best way to lose a competitive edge is to stop focusing on innovation and to start making demands simply because your bogus debt-based currency is more prevalent than someone else's bogus debt-based currency.
In general, I don't support monopolistic behaviors and that's what the dollar epitomized. That's not to say that China isn't trying to accomplish the same type of dominance, which would not be a good thing either.
The BRICS are moving in that direction simply because they don't agree with how the dollar is being used as a weapon and because they can observe the result of how the US can create more debt out of thin air in order to finance some very questionable policies, both domestically and worldwide. Ultimately, debt creation does nothing positive for the citizens that must burden the cost.
End the Fed.
I knew it would happen.
This is exactly what is happening. BRICs nations wish to conduct international business among each other without the US sticking their nose and their threats into it. The dollar masters are driving gold higher. When they start properly doing their job of maintaining low inflation and high employment (their only two actual mandates) then I will happily be glad to see gold prices drop. In the meantime they are destroying my dollars and I hold a lot more dollars than I do gold.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
SPMR! RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
You should sell off some of that gutter metal and buy some PM if you really feel that way. THKS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Better to threaten monetarily, or with B-1s? A threat is worthless if it cant be acted upon.
The US is the most innovative and technologically advanced nation on the planet. Thats why we use the dollar and not our technology.
Agreed, And you better bet they wouldnt be so timid.
Let the Brics eat the Brics.
End Congress.
Knowledge is the enemy of fear