The value of central bank gold reserves just surpassed the value of foreign U.S. Treasury holdings. When the biggest players in the world swap bonds for bullion, it’s worth paying attention.
Discussions of a new “BRICS currency” are gaining widespread attention. This article explores why an increasing number of foreign nations are attempting to “de-dollarize,” and why gold has emerged as a viable alternative to the USD as the global reserve currency.
Typically, we expect the price of gold to fall when yields rise. But over the last two months, Treasury yields and gold have surged together.
Gold is hovering around $2,320/ounce, down from its all-time high of $2,450 on May 20th. Silver has taken a bigger hit; down 11% from its May peak.
Typically, rising yields are bad for gold. Not this year. Rising yields represent an increasing risk of a public debt crisis, for which gold may be the only remedy.
Economic crashes begin with artificially low interest rates and credit expansion which lead to a misallocation of resources, inevitably culminating in a recession.
Prior to 1971, the US dollar was backed by gold. Today, the dollar is backed by 2 things: the government’s ability to generate revenues (via debt or taxes), and its authority to compel economic participants to transact in dollars.
History, economic theory, and empirical evidence: three arguments supporting gold as the purest form of money.
Fiat currencies rule the world, despite their shoddy track record over the last 100 years. What can we learn from fiat currency collapses in recent history?
The long-term risks of quantitative easing, including eroding the credibility of the US dollar, are closely linked to gold's performance.