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Why people crave physical gold
RedneckHB
Posts: 19,673 ✭✭✭✭✭
Thought some may be interested in this podcast.
Excuses are tools of the ignorant
Knowledge is the enemy of fear
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Gold Goes Full Reserve Asset as Basel III Elevates It to Tier 1 Status
Central Banks now Crave Gold.
"This is a huge shift in how regulators perceive gold, and it’s a long-overdue recognition of what many of us have known for decades: Gold is money. And it’s the kind of money you want to own when the world is on fire."
No Way Out: Stimulus and Money Printing Are the Only Path Left
Treating gold or any PM as a HQLA is ridiculous. Only money market instruments and short-term bond funds should get that treatment, plus some asset and mortgage-backed securities (ABS, MBS).
Those of you who criticize banks and regulators should be the first ones complaining about utilizing a non-interest bearing asset which experiences high volatility as a HQLA.
I have no problem with gold counting as a reserve asset, appropriately risk-weighted.
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Alan Greenspan once stated :
That sounds like a high-quality liquid asset to me.
At the New York Federal Reserve Bank there are various vaults for holding the gold of different owners.
You want to transfer gold from one country to another ? Put it on a cart and wheel it down the hall to another vault. Done.
Physical currency is about as liquid as you can get since it can be spent just about anywhere in the country. But it doesn't pay any interest either.
Money market instruments and bond funds can suffer liquidity issues.
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Highly unlikely. And I doubt gold would catch a bid in those times.
Gold last was a good hedge in 1979-80. It flopped in 1987, 2000, 2002, 2008, 2012, and 2020.
As David Einhorn said, you buy gold for a move to $5,000...not $35,000.
Why? Because they are craving dollars less
Got petro-gold?
No Way Out: Stimulus and Money Printing Are the Only Path Left
Yes I do...