Central banks around the world are hoarding gold. According to the World Gold Council, they increased their reserves by 31.6 tonnes of gold in April. This bulimia bodes very well for Bitcoin which is also gold, better …
Too much gold for Russia?
Moscow announced suspend purchases of gold on April 1. A break that comes after 12 years of frenzied purchases that began when the FED activated the printing press (the “Quantitative Easing”). It was the last straw after the invasion of Iraq that prompted President Putin to swap his dollar reserves for gold.
The Russian bear now holds more than 2,170 tonnes of gold. The equivalent of $ 120 billion. Its gold reserves have increased 7-fold since 2008, making the Ruble the currency backed by the world’s largest gold reserves. The stop shopping in May likely means that Russia is taking some profits. But there is no doubt that purchases will resume soon enough.
The objective of this strategy is the resurrection of the Gold Standard in order to do away with the exorbitant power of the dollar. Uncle Sam has a real global lordship right from the fact that all oil producing countries sell it in dollars. Under penalty of being embargoed (or even worse). This is the case of Iran, of Venezuela and to some extent China. This monetary hegemony has enabled Washington to post a trade balance that has been chronically in deficit since 1975 without the dollar depreciating.
Gold fever becomes global
For more than 20 years, a tacit agreement on the sale of gold has linked the ECB, the national central banks of the Euro Zone as well as those of Swiss and of Sweden: Do not buy gold. All of the world’s central banks were even net sellers from 1998 to 2018. In that year, the deal fell apart and central banks around the world bought 656 tonnes of gold. A record amount since the end of the Bretton Woods, in 1971, when Nixon removed the convertibility of the dollar into gold.
650 tonnes of gold were purchased the following year. For 2020, according to the World Gold Council – which is based on figures provided to it by the International Monetary Fund (IMF) – purchases slowed down. “Only” 142 tonnes from January to June.
The Turkey is one of the countries participating in the rush recently. The country bought nearly 40 tonnes in April, boosting its reserves to 524 tonnes. Turkish President Erdogan joined the Gold Standard axis by aligning with Russian strategy. A new alliance is blemishing for a NATO member country … Turkey has moved closer to Russia after the United States tried to overthrow the regime. It’s also an open secret that the JP Morgan sealed the Turkish lira (-50% in one summer) in an attempt to hasten the departure of Recep Tayyip Erdoğan. What could be better than gold to solidify your currency in the face of the blows from American banks (Deep State)?
Overall, all the member countries of the Eurasian Union (Kazakhstan, Belarus, Kyrgyzstan) are making efforts to increase their gold reserves. China, which is also seeking to remove the greenback from trade, has not been outdone. We haven’t known for 7 months how much gold the middle empire has accumulated, but that doesn’t mean that nothing is going on behind the scenes. Beijing is used to waiting several years before revealing its “official” reservations. The quotation marks are necessary because it is almost certain that the Chinese have much more gold than they admit (1950 tonnes “officially”).
A Bright Futur For Gold
Gold purchases have slowed this year, but the underlying trend is not about to stop. In any case, this is what emerges from the last poll of the World Gold Council (WGC) which suggests that 20% of all central banks have plans to increase their reserves.
“Economic factors – such as negative interest rates – are the main motivation. This demand is explained by the role of gold as a safe haven in times of crisis, as well as by its absence of risk of default. “
Indeed, gold can not default against the dollar which is based on a colossal and unpaid debt. Recall that when central banks keep dollars in reserves, it is actually in the form of US debt that they hold them, and not in the form of banknotes …
And as peak oil is fast approaching (not counting the 2020 recession), the ” economic context ” is not likely to improve. Gold has a bright future ahead of it, and Bitcoin too.
Central banks still prefer to buy gold bullion rather than Bitcoin, but they will not be able to ignore the fact that cryptocurrency is “increased” gold for very long. For example, he can teleport almost free while the barbaric relic does not travel faster than an airplane …
Child of Satoshi, the alchemist who turned a cryptographic algorithm into gold.
I’m talking about monetary geopolitics, not shitcoins.