In recent weeks, one of the fundamental factors that analysts look at to predict future movements in the price of gold is the movements of the Federal Reserve and the possibility that it begins to dismantle the rescue program that it put in place march on the occasion of the pandemic, to avoid the collapse of the US economy. In this post we are going to explain the reason for this relationship and what will happen when the Fed makes that decision.
The buzz word in the markets in recent months is 'tapering'. Literally, this term means 'narrowing', but applied to the financial world, it refers to the gradual reduction of the extraordinary expansive monetary policy measures taken by central banks after an economic crisis, in this case, the one that occurred due to the pandemic.
Analysts and investors have been very attentive to the latest public interventions by the president of the US Federal Reserve , Jerome Powell, and the meetings held by the Board of the US central bank, to try to find out when the expected start will begin. tapering'.
A Million Dollar Program
Before delving into its consequences, it is necessary to explain what the aid program approved by the Federal Reserve consists of to reactivate the US economy after the pandemic.
In addition to other aid for companies and families, the program launched in 2020 contemplates the purchase of Treasury bonds, for a value of 80,000 million dollars per month, and mortgage securitizations, for another 40,000 million. That is, 120,000 million dollars per month.
As Craig Hemke explains, if the Fed decides to begin withdrawing from the US debt monetization program, this will mean that the bond market stops receiving 80,000 million dollars a month.
“Where are the buyers going to come from to replace the Fed to support the bond market? And if no new buyers appear, how far will interest rates have to rise to attract the investors needed to prevent the bond crash? Will 10-year bond yields have to go up to 3, 4% or even higher? The US can’t afford these nominal rate levels, so it doesn’t seem likely that the Federal Reserve will withdraw the program at this time ,” Hemke says.
The Us Economy, In Recovery
At the annual meeting of central bank governors in Jackson Hole (Wyoming, USA), three weeks ago, Powell himself alluded to the possibility of beginning the dismantling of the program, although he stated that substantial progress had not yet been made on the data economics required for it.
Indeed, the latest data on the US economy, specifically the employment data published on September 3, have been worse than expected. Job creation was just 250,000 jobs, a third of what analysts expected, so the conditions the Fed chair was talking about are not yet in place.
Added to this is the risk of contagion posed by the bankruptcy of the Chinese real estate company Evergrande, which worries global markets.
All of this suggests that the person in charge of the Federal Reserve is going to postpone the decision to initiate the withdrawal of the stimuli until at least December.
Gold Reaction
This impression is the one that analysts and investors in gold have. It must be remembered that Treasury bonds, the asset that the Fed is supporting with multimillion-dollar monthly purchases, are the main rival that the precious metal faces for the favor of investors.
If bonds continue to offer negative real (nominal minus inflation) yields, due to current low interest rates, gold will remain a very attractive asset, regardless of short-term price fluctuations.
It will be another matter when the Federal Reserve begins to raise interest rates and bond yields rise to the point where they begin to attract investors’ attention.
But, based on the indications coming from the Fed, this does not seem feasible in the short term. So let’s keep trusting gold.
…
The post Why Does The Federal Reserve’s Bailout Program Influence The Price Of Gold? appeared first on Buy Gold Guide.
[content] => Array ( [encoded] =>In recent weeks, one of the fundamental factors that analysts look at to predict future movements in the price of gold is the movements of the Federal Reserve and the possibility that it begins to dismantle the rescue program that it put in place march on the occasion of the pandemic, to avoid the collapse of the US economy. In this post we are going to explain the reason for this relationship and what will happen when the Fed makes that decision.
The buzz word in the markets in recent months is 'tapering'. Literally, this term means 'narrowing', but applied to the financial world, it refers to the gradual reduction of the extraordinary expansive monetary policy measures taken by central banks after an economic crisis, in this case, the one that occurred due to the pandemic.
Analysts and investors have been very attentive to the latest public interventions by the president of the US Federal Reserve , Jerome Powell, and the meetings held by the Board of the US central bank, to try to find out when the expected start will begin. tapering'.
A Million Dollar Program
Before delving into its consequences, it is necessary to explain what the aid program approved by the Federal Reserve consists of to reactivate the US economy after the pandemic.
In addition to other aid for companies and families, the program launched in 2020 contemplates the purchase of Treasury bonds, for a value of 80,000 million dollars per month, and mortgage securitizations, for another 40,000 million. That is, 120,000 million dollars per month.
As Craig Hemke explains, if the Fed decides to begin withdrawing from the US debt monetization program, this will mean that the bond market stops receiving 80,000 million dollars a month.
“Where are the buyers going to come from to replace the Fed to support the bond market? And if no new buyers appear, how far will interest rates have to rise to attract the investors needed to prevent the bond crash? Will 10-year bond yields have to go up to 3, 4% or even higher? The US can’t afford these nominal rate levels, so it doesn’t seem likely that the Federal Reserve will withdraw the program at this time ,” Hemke says.
The Us Economy, In Recovery
At the annual meeting of central bank governors in Jackson Hole (Wyoming, USA), three weeks ago, Powell himself alluded to the possibility of beginning the dismantling of the program, although he stated that substantial progress had not yet been made on the data economics required for it.
Indeed, the latest data on the US economy, specifically the employment data published on September 3, have been worse than expected. Job creation was just 250,000 jobs, a third of what analysts expected, so the conditions the Fed chair was talking about are not yet in place.
Added to this is the risk of contagion posed by the bankruptcy of the Chinese real estate company Evergrande, which worries global markets.
All of this suggests that the person in charge of the Federal Reserve is going to postpone the decision to initiate the withdrawal of the stimuli until at least December.
Gold Reaction
This impression is the one that analysts and investors in gold have. It must be remembered that Treasury bonds, the asset that the Fed is supporting with multimillion-dollar monthly purchases, are the main rival that the precious metal faces for the favor of investors.
If bonds continue to offer negative real (nominal minus inflation) yields, due to current low interest rates, gold will remain a very attractive asset, regardless of short-term price fluctuations.
It will be another matter when the Federal Reserve begins to raise interest rates and bond yields rise to the point where they begin to attract investors’ attention.
But, based on the indications coming from the Fed, this does not seem feasible in the short term. So let’s keep trusting gold.
The post Why Does The Federal Reserve’s Bailout Program Influence The Price Of Gold? appeared first on Buy Gold Guide.
) [summary] =>In recent weeks, one of the fundamental factors that analysts look at to predict future movements in the price of gold is the movements of the Federal Reserve and the possibility that it begins to dismantle the rescue program that it put in place march on the occasion of the pandemic, to avoid the collapse of the US economy. In this post we are going to explain the reason for this relationship and what will happen when the Fed makes that decision.
The buzz word in the markets in recent months is 'tapering'. Literally, this term means 'narrowing', but applied to the financial world, it refers to the gradual reduction of the extraordinary expansive monetary policy measures taken by central banks after an economic crisis, in this case, the one that occurred due to the pandemic.
Analysts and investors have been very attentive to the latest public interventions by the president of the US Federal Reserve , Jerome Powell, and the meetings held by the Board of the US central bank, to try to find out when the expected start will begin. tapering'.
A Million Dollar Program
Before delving into its consequences, it is necessary to explain what the aid program approved by the Federal Reserve consists of to reactivate the US economy after the pandemic.
In addition to other aid for companies and families, the program launched in 2020 contemplates the purchase of Treasury bonds, for a value of 80,000 million dollars per month, and mortgage securitizations, for another 40,000 million. That is, 120,000 million dollars per month.
As Craig Hemke explains, if the Fed decides to begin withdrawing from the US debt monetization program, this will mean that the bond market stops receiving 80,000 million dollars a month.
“Where are the buyers going to come from to replace the Fed to support the bond market? And if no new buyers appear, how far will interest rates have to rise to attract the investors needed to prevent the bond crash? Will 10-year bond yields have to go up to 3, 4% or even higher? The US can’t afford these nominal rate levels, so it doesn’t seem likely that the Federal Reserve will withdraw the program at this time ,” Hemke says.
The Us Economy, In Recovery
At the annual meeting of central bank governors in Jackson Hole (Wyoming, USA), three weeks ago, Powell himself alluded to the possibility of beginning the dismantling of the program, although he stated that substantial progress had not yet been made on the data economics required for it.
Indeed, the latest data on the US economy, specifically the employment data published on September 3, have been worse than expected. Job creation was just 250,000 jobs, a third of what analysts expected, so the conditions the Fed chair was talking about are not yet in place.
Added to this is the risk of contagion posed by the bankruptcy of the Chinese real estate company Evergrande, which worries global markets.
All of this suggests that the person in charge of the Federal Reserve is going to postpone the decision to initiate the withdrawal of the stimuli until at least December.
Gold Reaction
This impression is the one that analysts and investors in gold have. It must be remembered that Treasury bonds, the asset that the Fed is supporting with multimillion-dollar monthly purchases, are the main rival that the precious metal faces for the favor of investors.
If bonds continue to offer negative real (nominal minus inflation) yields, due to current low interest rates, gold will remain a very attractive asset, regardless of short-term price fluctuations.
It will be another matter when the Federal Reserve begins to raise interest rates and bond yields rise to the point where they begin to attract investors’ attention.
But, based on the indications coming from the Fed, this does not seem feasible in the short term. So let’s keep trusting gold.
…
The post Why Does The Federal Reserve’s Bailout Program Influence The Price Of Gold? appeared first on Buy Gold Guide.
[atom_content] =>In recent weeks, one of the fundamental factors that analysts look at to predict future movements in the price of gold is the movements of the Federal Reserve and the possibility that it begins to dismantle the rescue program that it put in place march on the occasion of the pandemic, to avoid the collapse of the US economy. In this post we are going to explain the reason for this relationship and what will happen when the Fed makes that decision.
The buzz word in the markets in recent months is 'tapering'. Literally, this term means 'narrowing', but applied to the financial world, it refers to the gradual reduction of the extraordinary expansive monetary policy measures taken by central banks after an economic crisis, in this case, the one that occurred due to the pandemic.
Analysts and investors have been very attentive to the latest public interventions by the president of the US Federal Reserve , Jerome Powell, and the meetings held by the Board of the US central bank, to try to find out when the expected start will begin. tapering'.
A Million Dollar Program
Before delving into its consequences, it is necessary to explain what the aid program approved by the Federal Reserve consists of to reactivate the US economy after the pandemic.
In addition to other aid for companies and families, the program launched in 2020 contemplates the purchase of Treasury bonds, for a value of 80,000 million dollars per month, and mortgage securitizations, for another 40,000 million. That is, 120,000 million dollars per month.
As Craig Hemke explains, if the Fed decides to begin withdrawing from the US debt monetization program, this will mean that the bond market stops receiving 80,000 million dollars a month.
“Where are the buyers going to come from to replace the Fed to support the bond market? And if no new buyers appear, how far will interest rates have to rise to attract the investors needed to prevent the bond crash? Will 10-year bond yields have to go up to 3, 4% or even higher? The US can’t afford these nominal rate levels, so it doesn’t seem likely that the Federal Reserve will withdraw the program at this time ,” Hemke says.
The Us Economy, In Recovery
At the annual meeting of central bank governors in Jackson Hole (Wyoming, USA), three weeks ago, Powell himself alluded to the possibility of beginning the dismantling of the program, although he stated that substantial progress had not yet been made on the data economics required for it.
Indeed, the latest data on the US economy, specifically the employment data published on September 3, have been worse than expected. Job creation was just 250,000 jobs, a third of what analysts expected, so the conditions the Fed chair was talking about are not yet in place.
Added to this is the risk of contagion posed by the bankruptcy of the Chinese real estate company Evergrande, which worries global markets.
All of this suggests that the person in charge of the Federal Reserve is going to postpone the decision to initiate the withdrawal of the stimuli until at least December.
Gold Reaction
This impression is the one that analysts and investors in gold have. It must be remembered that Treasury bonds, the asset that the Fed is supporting with multimillion-dollar monthly purchases, are the main rival that the precious metal faces for the favor of investors.
If bonds continue to offer negative real (nominal minus inflation) yields, due to current low interest rates, gold will remain a very attractive asset, regardless of short-term price fluctuations.
It will be another matter when the Federal Reserve begins to raise interest rates and bond yields rise to the point where they begin to attract investors’ attention.
But, based on the indications coming from the Fed, this does not seem feasible in the short term. So let’s keep trusting gold.
The post Why Does The Federal Reserve’s Bailout Program Influence The Price Of Gold? appeared first on Buy Gold Guide.
) [1] => Array ( [title] => Central Banks Bet On Physical Gold And Criticize Bitcoin [link] => https://buygold.guide/central-banks-bet-on-physical-gold-and-criticize-bitcoin/ [dc] => Array ( [creator] => Rafael Santos ) [pubdate] => Mon, 28 Nov 2022 13:01:28 +0000 [category] => Bitcoin [guid] => https://buygold.guide/?p=35 [description] =>The rise of cryptocurrencies and, especially, bitcoin, has placed cryptocurrencies at the center of the debate. According to some analysts, these investment assets not only rival gold when it comes to attracting investor attention, but may even displace it as the quintessential refuge asset in times of crisis. However, authoritative voices such as those of the governors of the central banks continue to bet on physical gold and are wary of virtual assets.
To put this debate that has been created in the media between gold and bitcoin into context, it is necessary to analyze one of the most important sectors of demand for the precious metal: central banks.
According to the latest data published in the Gold Demand Trends report for the second quarter of the year, prepared by the World Gold Council , central banks acquired a net figure of 333 tons of gold in the first half of 2021 , an amount that exceeds by a 39% to the average of the first semester of the last five years , and 29% to the average of the last ten years .
Only in the second quarter of the year, the figure was 199.9 tons, 214% more than the 63.7 net tons in the January-June 2020 period.
By comparison, sales were much lower, totaling a net amount of 41.5 tonnes in the first half. According to the analysts of the World Gold Council in the mentioned report, “despite the fact that a good part of the recent increase in demand is due to the purchases made by the central banks of Hungary and Thailand, the significant interest of a good number of entities from emerging countries allows us to maintain an optimistic perspective regarding demand in the rest of the year. Even if there is a moderate level of selling, we expect global central banks to remain net buyers for the remainder of 2021. “
Positive Opinion On Gold
These good prospects for future demand for gold by the central bank sector are also supported by what those responsible for them stated in a recent survey.
According to the results of this survey carried out among 26 central banks, the nature of a store of value that gold has, its historic price level and its performance in times of crisis are the main reasons for assessing the presence of the precious metal in its strategic reserves. .
52% of those surveyed affirm that central banks will increase their reserves during the next 12 months, while 21% expect the amount of gold in their reserves to increase during the same period.
Position On Bitcoin
In addition to ruling on physical gold, some governors of the world’s main central banks have made their views clear on cryptocurrencies and their enormous appreciation in recent times.
Common opinion is not very favorable to cryptocurrencies, which are viewed with suspicion by the official sector.
Thus, the governor of the Bank of Sweden , Stefan Ingves , stated, in a conference given at the beginning of this month of September, that “normally , private money ends up collapsing , sooner or later. Sure, someone can get rich trading bitcoin, but it’s comparable to trading postage stamps . “
Ingves himself had pointed out earlier this year that cryptocurrencies would most likely have to come under scrutiny by regulators , after having become an increasingly popular option for investors.
Along these same lines, the governor of the Bank of England , Andrew Bailey , explained last May that cryptocurrencies could plummet to the point of losing all their value: “I fear they lack intrinsic value . I’m sorry, but I’m going to say it bluntly again: if you invest in cryptocurrency, be prepared to lose all your money . ”
For his part, the Governor of the Central Bank of Ireland , Gabriel Makhlouf , pointed out in February that investors who choose to acquire bitcoin should take into account that they may lose everything they have invested: “personally, I would not invest my money in it , but It is clear that there are people who think that it is a good option. 300 years ago, people bought tulips because they thought it was a good investment” (a reference to the tulip bulb market crisis that took place in the Netherlands in 1637).
The president of the US Federal Reserve , Jerome Powell , who commented in February on the growing popularity of these new investment assets, has also expressed himself in this regard : “what people call cryptocurrencies are, in reality, vehicles for speculation . Nobody uses them as a means of payment, like the dollar . ”
Janet Yellen , the US Treasury secretary and predecessor of the current Fed chair, described bitcoin as “ a highly speculative asset , not widely used as a transmission mechanism and an extremely inefficient means of conducting transactions” .…
The post Central Banks Bet On Physical Gold And Criticize Bitcoin appeared first on Buy Gold Guide.
[content] => Array ( [encoded] =>The rise of cryptocurrencies and, especially, bitcoin, has placed cryptocurrencies at the center of the debate. According to some analysts, these investment assets not only rival gold when it comes to attracting investor attention, but may even displace it as the quintessential refuge asset in times of crisis. However, authoritative voices such as those of the governors of the central banks continue to bet on physical gold and are wary of virtual assets.
To put this debate that has been created in the media between gold and bitcoin into context, it is necessary to analyze one of the most important sectors of demand for the precious metal: central banks.
According to the latest data published in the Gold Demand Trends report for the second quarter of the year, prepared by the World Gold Council , central banks acquired a net figure of 333 tons of gold in the first half of 2021 , an amount that exceeds by a 39% to the average of the first semester of the last five years , and 29% to the average of the last ten years .
Only in the second quarter of the year, the figure was 199.9 tons, 214% more than the 63.7 net tons in the January-June 2020 period.
By comparison, sales were much lower, totaling a net amount of 41.5 tonnes in the first half. According to the analysts of the World Gold Council in the mentioned report, “despite the fact that a good part of the recent increase in demand is due to the purchases made by the central banks of Hungary and Thailand, the significant interest of a good number of entities from emerging countries allows us to maintain an optimistic perspective regarding demand in the rest of the year. Even if there is a moderate level of selling, we expect global central banks to remain net buyers for the remainder of 2021. “
Positive Opinion On Gold
These good prospects for future demand for gold by the central bank sector are also supported by what those responsible for them stated in a recent survey.
According to the results of this survey carried out among 26 central banks, the nature of a store of value that gold has, its historic price level and its performance in times of crisis are the main reasons for assessing the presence of the precious metal in its strategic reserves. .
52% of those surveyed affirm that central banks will increase their reserves during the next 12 months, while 21% expect the amount of gold in their reserves to increase during the same period.
Position On Bitcoin
In addition to ruling on physical gold, some governors of the world’s main central banks have made their views clear on cryptocurrencies and their enormous appreciation in recent times.
Common opinion is not very favorable to cryptocurrencies, which are viewed with suspicion by the official sector.
Thus, the governor of the Bank of Sweden , Stefan Ingves , stated, in a conference given at the beginning of this month of September, that “normally , private money ends up collapsing , sooner or later. Sure, someone can get rich trading bitcoin, but it’s comparable to trading postage stamps . “
Ingves himself had pointed out earlier this year that cryptocurrencies would most likely have to come under scrutiny by regulators , after having become an increasingly popular option for investors.
Along these same lines, the governor of the Bank of England , Andrew Bailey , explained last May that cryptocurrencies could plummet to the point of losing all their value: “I fear they lack intrinsic value . I’m sorry, but I’m going to say it bluntly again: if you invest in cryptocurrency, be prepared to lose all your money . ”
For his part, the Governor of the Central Bank of Ireland , Gabriel Makhlouf , pointed out in February that investors who choose to acquire bitcoin should take into account that they may lose everything they have invested: “personally, I would not invest my money in it , but It is clear that there are people who think that it is a good option. 300 years ago, people bought tulips because they thought it was a good investment” (a reference to the tulip bulb market crisis that took place in the Netherlands in 1637).
The president of the US Federal Reserve , Jerome Powell , who commented in February on the growing popularity of these new investment assets, has also expressed himself in this regard : “what people call cryptocurrencies are, in reality, vehicles for speculation . Nobody uses them as a means of payment, like the dollar . ”
Janet Yellen , the US Treasury secretary and predecessor of the current Fed chair, described bitcoin as “ a highly speculative asset , not widely used as a transmission mechanism and an extremely inefficient means of conducting transactions” .…
The post Central Banks Bet On Physical Gold And Criticize Bitcoin appeared first on Buy Gold Guide.
) [summary] =>The rise of cryptocurrencies and, especially, bitcoin, has placed cryptocurrencies at the center of the debate. According to some analysts, these investment assets not only rival gold when it comes to attracting investor attention, but may even displace it as the quintessential refuge asset in times of crisis. However, authoritative voices such as those of the governors of the central banks continue to bet on physical gold and are wary of virtual assets.
To put this debate that has been created in the media between gold and bitcoin into context, it is necessary to analyze one of the most important sectors of demand for the precious metal: central banks.
According to the latest data published in the Gold Demand Trends report for the second quarter of the year, prepared by the World Gold Council , central banks acquired a net figure of 333 tons of gold in the first half of 2021 , an amount that exceeds by a 39% to the average of the first semester of the last five years , and 29% to the average of the last ten years .
Only in the second quarter of the year, the figure was 199.9 tons, 214% more than the 63.7 net tons in the January-June 2020 period.
By comparison, sales were much lower, totaling a net amount of 41.5 tonnes in the first half. According to the analysts of the World Gold Council in the mentioned report, “despite the fact that a good part of the recent increase in demand is due to the purchases made by the central banks of Hungary and Thailand, the significant interest of a good number of entities from emerging countries allows us to maintain an optimistic perspective regarding demand in the rest of the year. Even if there is a moderate level of selling, we expect global central banks to remain net buyers for the remainder of 2021. “
Positive Opinion On Gold
These good prospects for future demand for gold by the central bank sector are also supported by what those responsible for them stated in a recent survey.
According to the results of this survey carried out among 26 central banks, the nature of a store of value that gold has, its historic price level and its performance in times of crisis are the main reasons for assessing the presence of the precious metal in its strategic reserves. .
52% of those surveyed affirm that central banks will increase their reserves during the next 12 months, while 21% expect the amount of gold in their reserves to increase during the same period.
Position On Bitcoin
In addition to ruling on physical gold, some governors of the world’s main central banks have made their views clear on cryptocurrencies and their enormous appreciation in recent times.
Common opinion is not very favorable to cryptocurrencies, which are viewed with suspicion by the official sector.
Thus, the governor of the Bank of Sweden , Stefan Ingves , stated, in a conference given at the beginning of this month of September, that “normally , private money ends up collapsing , sooner or later. Sure, someone can get rich trading bitcoin, but it’s comparable to trading postage stamps . “
Ingves himself had pointed out earlier this year that cryptocurrencies would most likely have to come under scrutiny by regulators , after having become an increasingly popular option for investors.
Along these same lines, the governor of the Bank of England , Andrew Bailey , explained last May that cryptocurrencies could plummet to the point of losing all their value: “I fear they lack intrinsic value . I’m sorry, but I’m going to say it bluntly again: if you invest in cryptocurrency, be prepared to lose all your money . ”
For his part, the Governor of the Central Bank of Ireland , Gabriel Makhlouf , pointed out in February that investors who choose to acquire bitcoin should take into account that they may lose everything they have invested: “personally, I would not invest my money in it , but It is clear that there are people who think that it is a good option. 300 years ago, people bought tulips because they thought it was a good investment” (a reference to the tulip bulb market crisis that took place in the Netherlands in 1637).
The president of the US Federal Reserve , Jerome Powell , who commented in February on the growing popularity of these new investment assets, has also expressed himself in this regard : “what people call cryptocurrencies are, in reality, vehicles for speculation . Nobody uses them as a means of payment, like the dollar . ”
Janet Yellen , the US Treasury secretary and predecessor of the current Fed chair, described bitcoin as “ a highly speculative asset , not widely used as a transmission mechanism and an extremely inefficient means of conducting transactions” .…
The post Central Banks Bet On Physical Gold And Criticize Bitcoin appeared first on Buy Gold Guide.
[atom_content] =>The rise of cryptocurrencies and, especially, bitcoin, has placed cryptocurrencies at the center of the debate. According to some analysts, these investment assets not only rival gold when it comes to attracting investor attention, but may even displace it as the quintessential refuge asset in times of crisis. However, authoritative voices such as those of the governors of the central banks continue to bet on physical gold and are wary of virtual assets.
To put this debate that has been created in the media between gold and bitcoin into context, it is necessary to analyze one of the most important sectors of demand for the precious metal: central banks.
According to the latest data published in the Gold Demand Trends report for the second quarter of the year, prepared by the World Gold Council , central banks acquired a net figure of 333 tons of gold in the first half of 2021 , an amount that exceeds by a 39% to the average of the first semester of the last five years , and 29% to the average of the last ten years .
Only in the second quarter of the year, the figure was 199.9 tons, 214% more than the 63.7 net tons in the January-June 2020 period.
By comparison, sales were much lower, totaling a net amount of 41.5 tonnes in the first half. According to the analysts of the World Gold Council in the mentioned report, “despite the fact that a good part of the recent increase in demand is due to the purchases made by the central banks of Hungary and Thailand, the significant interest of a good number of entities from emerging countries allows us to maintain an optimistic perspective regarding demand in the rest of the year. Even if there is a moderate level of selling, we expect global central banks to remain net buyers for the remainder of 2021. “
Positive Opinion On Gold
These good prospects for future demand for gold by the central bank sector are also supported by what those responsible for them stated in a recent survey.
According to the results of this survey carried out among 26 central banks, the nature of a store of value that gold has, its historic price level and its performance in times of crisis are the main reasons for assessing the presence of the precious metal in its strategic reserves. .
52% of those surveyed affirm that central banks will increase their reserves during the next 12 months, while 21% expect the amount of gold in their reserves to increase during the same period.
Position On Bitcoin
In addition to ruling on physical gold, some governors of the world’s main central banks have made their views clear on cryptocurrencies and their enormous appreciation in recent times.
Common opinion is not very favorable to cryptocurrencies, which are viewed with suspicion by the official sector.
Thus, the governor of the Bank of Sweden , Stefan Ingves , stated, in a conference given at the beginning of this month of September, that “normally , private money ends up collapsing , sooner or later. Sure, someone can get rich trading bitcoin, but it’s comparable to trading postage stamps . “
Ingves himself had pointed out earlier this year that cryptocurrencies would most likely have to come under scrutiny by regulators , after having become an increasingly popular option for investors.
Along these same lines, the governor of the Bank of England , Andrew Bailey , explained last May that cryptocurrencies could plummet to the point of losing all their value: “I fear they lack intrinsic value . I’m sorry, but I’m going to say it bluntly again: if you invest in cryptocurrency, be prepared to lose all your money . ”
For his part, the Governor of the Central Bank of Ireland , Gabriel Makhlouf , pointed out in February that investors who choose to acquire bitcoin should take into account that they may lose everything they have invested: “personally, I would not invest my money in it , but It is clear that there are people who think that it is a good option. 300 years ago, people bought tulips because they thought it was a good investment” (a reference to the tulip bulb market crisis that took place in the Netherlands in 1637).
The president of the US Federal Reserve , Jerome Powell , who commented in February on the growing popularity of these new investment assets, has also expressed himself in this regard : “what people call cryptocurrencies are, in reality, vehicles for speculation . Nobody uses them as a means of payment, like the dollar . ”
Janet Yellen , the US Treasury secretary and predecessor of the current Fed chair, described bitcoin as “ a highly speculative asset , not widely used as a transmission mechanism and an extremely inefficient means of conducting transactions” .…
The post Central Banks Bet On Physical Gold And Criticize Bitcoin appeared first on Buy Gold Guide.
) [2] => Array ( [title] => Gold, The Best “Commodity” For Investors [link] => https://buygold.guide/gold-the-best-commodity-for-investors/ [dc] => Array ( [creator] => Rafael Santos ) [pubdate] => Mon, 28 Nov 2022 12:59:07 +0000 [category] => Gold Investors [guid] => https://buygold.guide/?p=31 [description] =>In addition to being a precious metal and an investment asset, gold also falls into the category of ‘commodities’ or raw materials. It is often said that, compared to the others, it is the best for all the advantages it has for the investment portfolio. In this post we are going to compare what the precious metal can offer compared to the rest of the ‘commodities’.
A ‘commodity’ is defined as an economic good that has a value and is useful , and that does not present differences in terms of its composition or quality depending on the place where it was produced.
There are very diverse ‘commodities’, from precious metals (gold, silver, platinum and palladium) to base metals (iron, copper, aluminum, tin…), through fuels (oil, natural gas), agricultural products (cereals , sugar) and even cattle.
Gold as a ‘Commodity’
According to the previous definition, gold falls into the category of ‘commodities’. However, due to its market dynamics and the great diversity of its applications (investment, jewelry, electronics, medicine…) it is very different from the rest.
As pointed out by the World Gold Council , in their recent report ‘Gold: the most effective investment commodity’:
“This difference is due to the enormous relevance of the revaluation profile of gold in terms of returns, volatility and correlation. All these characteristics together allow the diversification of the investment portfolio to be much greater than with intensive exposure to one of these commodities” .
Some of these are considered as luxury goods; others have applications in the field of technology; others act as protection against inflation or currency devaluation; and, in general, all allow a greater or lesser degree of diversification in an investment portfolio. However, gold is the only ‘commodity’ that performs all these functions simultaneously.
Low Volatility
The arrival of the pandemic in Europe, starting in March 2020, significantly increased the volatility of most assets and ‘commodities’. Of all of them, gold is the least affected by this volatility.
The reason for this relative stability of the precious metal derives from its role as an element of diversification in turbulent environments, in addition to its low correlation with other ‘commodities’ and investment assets.
This allows gold to hold its own at times when other commodity indices plummet. A quality that is highly appreciated by investors.
Returns and diversification
Another difference between gold and other commodities is the precious metal’s ability to consistently deliver returns over the long term.
As the World Gold Council report underscores , the gold metal’s long-term performance is comparable to that of the S&P 500 stock index , with an annual rate of 10.8% since the elimination of the gold standard in 1971 , which is equivalent to a compound annual return of 7.9% .
Compared to the rest of the ‘commodities’, gold has outperformed most of them during the past 5, 10 and 20 years, as can be seen in the following graph.
In addition to this superior performance, gold also offers an invaluable investment portfolio diversification service, which is especially effective in times of systemic risk.
This is because the metal hardly correlates with other assets, including commodities, during times of stress, while it maintains a positive correlation with capital markets during times of economic growth, when stocks rise.
This capacity highlights the double condition of gold, as a consumer good and an investment asset.
Thus, when economic conditions are favorable, consumer spending increases in sectors such as jewelry or technology, which favors gold.
In contrast, in times of systemic risk, investors look for high-quality, liquid assets that are capable of preserving capital and minimizing losses. Once again, gold benefits from increasing investment demand and, therefore, its price.
Storage Costs
Finally, gold also benefits from its comparison with the rest of the ‘commodities’ in relation to its storage costs.
Most investors access the commodity markets through futures contracts, which are based on the expected price of the commodity at a specific time in the future, plus transportation and storage costs, and interest.
Therefore, investors are exposed to a new source of volatility: the so-called ‘futures curve’ .
However, this curve has less impact in the case of gold, since the costs of storing gold are much lower compared to those of other metals, or those of fuels such as oil or natural gas.
It must be taken into account that the enormous density of gold means that a ton of this metal occupies a much smaller volume than that of other metals such as iron, copper or silver.
For all these reasons, gold, although it shares characteristics with the rest of the ‘commodities’, outperforms them due to its intrinsic characteristics and the value it has due to its multiple applications.…
The post Gold, The Best “Commodity” For Investors appeared first on Buy Gold Guide.
[content] => Array ( [encoded] =>In addition to being a precious metal and an investment asset, gold also falls into the category of ‘commodities’ or raw materials. It is often said that, compared to the others, it is the best for all the advantages it has for the investment portfolio. In this post we are going to compare what the precious metal can offer compared to the rest of the ‘commodities’.
A ‘commodity’ is defined as an economic good that has a value and is useful , and that does not present differences in terms of its composition or quality depending on the place where it was produced.
There are very diverse ‘commodities’, from precious metals (gold, silver, platinum and palladium) to base metals (iron, copper, aluminum, tin…), through fuels (oil, natural gas), agricultural products (cereals , sugar) and even cattle.
Gold as a ‘Commodity’
According to the previous definition, gold falls into the category of ‘commodities’. However, due to its market dynamics and the great diversity of its applications (investment, jewelry, electronics, medicine…) it is very different from the rest.
As pointed out by the World Gold Council , in their recent report ‘Gold: the most effective investment commodity’:
“This difference is due to the enormous relevance of the revaluation profile of gold in terms of returns, volatility and correlation. All these characteristics together allow the diversification of the investment portfolio to be much greater than with intensive exposure to one of these commodities” .
Some of these are considered as luxury goods; others have applications in the field of technology; others act as protection against inflation or currency devaluation; and, in general, all allow a greater or lesser degree of diversification in an investment portfolio. However, gold is the only ‘commodity’ that performs all these functions simultaneously.
Low Volatility
The arrival of the pandemic in Europe, starting in March 2020, significantly increased the volatility of most assets and ‘commodities’. Of all of them, gold is the least affected by this volatility.
The reason for this relative stability of the precious metal derives from its role as an element of diversification in turbulent environments, in addition to its low correlation with other ‘commodities’ and investment assets.
This allows gold to hold its own at times when other commodity indices plummet. A quality that is highly appreciated by investors.
Returns and diversification
Another difference between gold and other commodities is the precious metal’s ability to consistently deliver returns over the long term.
As the World Gold Council report underscores , the gold metal’s long-term performance is comparable to that of the S&P 500 stock index , with an annual rate of 10.8% since the elimination of the gold standard in 1971 , which is equivalent to a compound annual return of 7.9% .
Compared to the rest of the ‘commodities’, gold has outperformed most of them during the past 5, 10 and 20 years, as can be seen in the following graph.
In addition to this superior performance, gold also offers an invaluable investment portfolio diversification service, which is especially effective in times of systemic risk.
This is because the metal hardly correlates with other assets, including commodities, during times of stress, while it maintains a positive correlation with capital markets during times of economic growth, when stocks rise.
This capacity highlights the double condition of gold, as a consumer good and an investment asset.
Thus, when economic conditions are favorable, consumer spending increases in sectors such as jewelry or technology, which favors gold.
In contrast, in times of systemic risk, investors look for high-quality, liquid assets that are capable of preserving capital and minimizing losses. Once again, gold benefits from increasing investment demand and, therefore, its price.
Storage Costs
Finally, gold also benefits from its comparison with the rest of the ‘commodities’ in relation to its storage costs.
Most investors access the commodity markets through futures contracts, which are based on the expected price of the commodity at a specific time in the future, plus transportation and storage costs, and interest.
Therefore, investors are exposed to a new source of volatility: the so-called ‘futures curve’ .
However, this curve has less impact in the case of gold, since the costs of storing gold are much lower compared to those of other metals, or those of fuels such as oil or natural gas.
It must be taken into account that the enormous density of gold means that a ton of this metal occupies a much smaller volume than that of other metals such as iron, copper or silver.
For all these reasons, gold, although it shares characteristics with the rest of the ‘commodities’, outperforms them due to its intrinsic characteristics and the value it has due to its multiple applications.…
The post Gold, The Best “Commodity” For Investors appeared first on Buy Gold Guide.
) [summary] =>In addition to being a precious metal and an investment asset, gold also falls into the category of ‘commodities’ or raw materials. It is often said that, compared to the others, it is the best for all the advantages it has for the investment portfolio. In this post we are going to compare what the precious metal can offer compared to the rest of the ‘commodities’.
A ‘commodity’ is defined as an economic good that has a value and is useful , and that does not present differences in terms of its composition or quality depending on the place where it was produced.
There are very diverse ‘commodities’, from precious metals (gold, silver, platinum and palladium) to base metals (iron, copper, aluminum, tin…), through fuels (oil, natural gas), agricultural products (cereals , sugar) and even cattle.
Gold as a ‘Commodity’
According to the previous definition, gold falls into the category of ‘commodities’. However, due to its market dynamics and the great diversity of its applications (investment, jewelry, electronics, medicine…) it is very different from the rest.
As pointed out by the World Gold Council , in their recent report ‘Gold: the most effective investment commodity’:
“This difference is due to the enormous relevance of the revaluation profile of gold in terms of returns, volatility and correlation. All these characteristics together allow the diversification of the investment portfolio to be much greater than with intensive exposure to one of these commodities” .
Some of these are considered as luxury goods; others have applications in the field of technology; others act as protection against inflation or currency devaluation; and, in general, all allow a greater or lesser degree of diversification in an investment portfolio. However, gold is the only ‘commodity’ that performs all these functions simultaneously.
Low Volatility
The arrival of the pandemic in Europe, starting in March 2020, significantly increased the volatility of most assets and ‘commodities’. Of all of them, gold is the least affected by this volatility.
The reason for this relative stability of the precious metal derives from its role as an element of diversification in turbulent environments, in addition to its low correlation with other ‘commodities’ and investment assets.
This allows gold to hold its own at times when other commodity indices plummet. A quality that is highly appreciated by investors.
Returns and diversification
Another difference between gold and other commodities is the precious metal’s ability to consistently deliver returns over the long term.
As the World Gold Council report underscores , the gold metal’s long-term performance is comparable to that of the S&P 500 stock index , with an annual rate of 10.8% since the elimination of the gold standard in 1971 , which is equivalent to a compound annual return of 7.9% .
Compared to the rest of the ‘commodities’, gold has outperformed most of them during the past 5, 10 and 20 years, as can be seen in the following graph.
In addition to this superior performance, gold also offers an invaluable investment portfolio diversification service, which is especially effective in times of systemic risk.
This is because the metal hardly correlates with other assets, including commodities, during times of stress, while it maintains a positive correlation with capital markets during times of economic growth, when stocks rise.
This capacity highlights the double condition of gold, as a consumer good and an investment asset.
Thus, when economic conditions are favorable, consumer spending increases in sectors such as jewelry or technology, which favors gold.
In contrast, in times of systemic risk, investors look for high-quality, liquid assets that are capable of preserving capital and minimizing losses. Once again, gold benefits from increasing investment demand and, therefore, its price.
Storage Costs
Finally, gold also benefits from its comparison with the rest of the ‘commodities’ in relation to its storage costs.
Most investors access the commodity markets through futures contracts, which are based on the expected price of the commodity at a specific time in the future, plus transportation and storage costs, and interest.
Therefore, investors are exposed to a new source of volatility: the so-called ‘futures curve’ .
However, this curve has less impact in the case of gold, since the costs of storing gold are much lower compared to those of other metals, or those of fuels such as oil or natural gas.
It must be taken into account that the enormous density of gold means that a ton of this metal occupies a much smaller volume than that of other metals such as iron, copper or silver.
For all these reasons, gold, although it shares characteristics with the rest of the ‘commodities’, outperforms them due to its intrinsic characteristics and the value it has due to its multiple applications.…
The post Gold, The Best “Commodity” For Investors appeared first on Buy Gold Guide.
[atom_content] =>In addition to being a precious metal and an investment asset, gold also falls into the category of ‘commodities’ or raw materials. It is often said that, compared to the others, it is the best for all the advantages it has for the investment portfolio. In this post we are going to compare what the precious metal can offer compared to the rest of the ‘commodities’.
A ‘commodity’ is defined as an economic good that has a value and is useful , and that does not present differences in terms of its composition or quality depending on the place where it was produced.
There are very diverse ‘commodities’, from precious metals (gold, silver, platinum and palladium) to base metals (iron, copper, aluminum, tin…), through fuels (oil, natural gas), agricultural products (cereals , sugar) and even cattle.
Gold as a ‘Commodity’
According to the previous definition, gold falls into the category of ‘commodities’. However, due to its market dynamics and the great diversity of its applications (investment, jewelry, electronics, medicine…) it is very different from the rest.
As pointed out by the World Gold Council , in their recent report ‘Gold: the most effective investment commodity’:
“This difference is due to the enormous relevance of the revaluation profile of gold in terms of returns, volatility and correlation. All these characteristics together allow the diversification of the investment portfolio to be much greater than with intensive exposure to one of these commodities” .
Some of these are considered as luxury goods; others have applications in the field of technology; others act as protection against inflation or currency devaluation; and, in general, all allow a greater or lesser degree of diversification in an investment portfolio. However, gold is the only ‘commodity’ that performs all these functions simultaneously.
Low Volatility
The arrival of the pandemic in Europe, starting in March 2020, significantly increased the volatility of most assets and ‘commodities’. Of all of them, gold is the least affected by this volatility.
The reason for this relative stability of the precious metal derives from its role as an element of diversification in turbulent environments, in addition to its low correlation with other ‘commodities’ and investment assets.
This allows gold to hold its own at times when other commodity indices plummet. A quality that is highly appreciated by investors.
Returns and diversification
Another difference between gold and other commodities is the precious metal’s ability to consistently deliver returns over the long term.
As the World Gold Council report underscores , the gold metal’s long-term performance is comparable to that of the S&P 500 stock index , with an annual rate of 10.8% since the elimination of the gold standard in 1971 , which is equivalent to a compound annual return of 7.9% .
Compared to the rest of the ‘commodities’, gold has outperformed most of them during the past 5, 10 and 20 years, as can be seen in the following graph.
In addition to this superior performance, gold also offers an invaluable investment portfolio diversification service, which is especially effective in times of systemic risk.
This is because the metal hardly correlates with other assets, including commodities, during times of stress, while it maintains a positive correlation with capital markets during times of economic growth, when stocks rise.
This capacity highlights the double condition of gold, as a consumer good and an investment asset.
Thus, when economic conditions are favorable, consumer spending increases in sectors such as jewelry or technology, which favors gold.
In contrast, in times of systemic risk, investors look for high-quality, liquid assets that are capable of preserving capital and minimizing losses. Once again, gold benefits from increasing investment demand and, therefore, its price.
Storage Costs
Finally, gold also benefits from its comparison with the rest of the ‘commodities’ in relation to its storage costs.
Most investors access the commodity markets through futures contracts, which are based on the expected price of the commodity at a specific time in the future, plus transportation and storage costs, and interest.
Therefore, investors are exposed to a new source of volatility: the so-called ‘futures curve’ .
However, this curve has less impact in the case of gold, since the costs of storing gold are much lower compared to those of other metals, or those of fuels such as oil or natural gas.
It must be taken into account that the enormous density of gold means that a ton of this metal occupies a much smaller volume than that of other metals such as iron, copper or silver.
For all these reasons, gold, although it shares characteristics with the rest of the ‘commodities’, outperforms them due to its intrinsic characteristics and the value it has due to its multiple applications.…
The post Gold, The Best “Commodity” For Investors appeared first on Buy Gold Guide.
) [3] => Array ( [title] => Large International Investors Recommend Investing In Physical Gold [link] => https://buygold.guide/large-international-investors-recommend-investing-in-physical-gold/ [dc] => Array ( [creator] => Rafael Santos ) [pubdate] => Mon, 28 Nov 2022 12:57:01 +0000 [category] => Physical Gold [guid] => https://buygold.guide/?p=27 [description] =>In a current environment of recovery of the global economy, with the threat of rising inflation, spurred on by the multi-million dollar support plans launched in the US by the Federal Reserve, investors are increasingly taking safe haven assets such as metals into account beautiful. In this same week, two large international investors have agreed to recommend physical gold as a means of protection against inflation, rejecting other options such as bitcoin.
The price of gold has risen in recent days and, at the time of writing this post, it was already above $1,816.50 an ounce , its highest level in the last month.
In a global economic environment marked by uncertainty about the recovery, geopolitical instability surrounding the conflict in Afghanistan and fear of a significant rise in inflation, precious metals once again appear as a suitable option to protect investors’ assets.
It is no coincidence that, in recent days, large international investors have advised increasing exposure to the precious metal to face the risk represented by rising inflation.
Möbius: 10% of the portfolio in gold
This is the case of Mark Möbius , an investor of German origin who led the investment firm Templeton ; he was the first to bet on the potential of developing countries, such as Chile and Brazil; he developed the stock markets in Latin America and Asia; and became an adviser to the World Bank and the Asian Development Bank .
In recent statements to the Bloomberg news agency , the veteran investor has opted for gold, preferentially physical, as the means of dealing with inflation and the monetary devaluation that it brings with it.
According to Mobius:
“The global currency devaluation is going to be very significant over the next year, given the incredible amount of money that has been printed . “
The investor believes that the unprecedented economic stimuli that have been put into operation since the beginning of the covid-19 pandemic are going to cause the devaluation of a good number of international currencies in the future.
In the United States alone, trillions of dollars have been invested in these stimulus programs that seek to accelerate economic growth, affected by the pandemic. The programs include the repurchase of treasury bonds and direct aid to consumers.
To counteract this currency devaluation, Möbius advises investors to purchase physical gold instead of the popular gold ETFs:
“ 10% of the investment portfolio should be in physical gold . It is very useful to have physical gold that can be accessed immediately, without the danger of the government confiscating it . ”
Physical gold has multiple advantages over so-called ‘paper gold’ : it has no counterparty risk, is not linked to any entity and has immediate liquidity at any time and place, even in the event of a natural catastrophe or systemic financial crisis.
Paulson: gold, better than bitcoin
The second major investor to have bet on gold in recent days is John Paulson , founder of the hedge fund Paulson & Co , which became famous in 2007 for betting against US subprime mortgage-backed securities. , a maneuver with which he earned more than 4,000 million dollars.
This financier has always been a staunch supporter of gold, which his hedge fund turned to as protection before the 2008 financial crisis.
According to Paulson, also interviewed by Bloomberg , the stars are realigning in favor of the precious metal, which is going to benefit from higher-than-expected inflation due to the huge supply of money pushed from the Federal Reserve to combat the financial effects of the pandemic.
For the US investor, now is the time to buy gold, as the precious metal “ revaluates very positively in times of rising inflation” .
In fact, Paulson has recalled what happened in the 1970s, when the price registered a ‘parabolic’ rise, caused by double-digit inflation.
In those years, the US CPI soared from 2.7% in June 1972 to a record of 14.8% in March 1980. For its part, gold went from $38 an ounce in August 1972 to nothing less than 850 dollars in the early 1980s.
Paulson believes that this situation could have parallels with the current one, and that gold will also benefit from its supply/demand situation, due to the “limited amount of investment gold” that exists in the market.
In addition, the American investor confesses that “I am not a believer in cryptocurrencies” , whose market is the closest thing to “a bubble” and whose value will end up being zero.
Even though the bitcoin supply is limited to 21 million units, Paulson considers this to be “a limited supply of nothing” . In his opinion, as long as the demand exceeds the supply, the price will go up; the problem is that when demand falls, the price will fall with it.
“None of the cryptocurrencies have intrinsic value, except for the fact that there is a limited amount ,” Paulson noted in the interview.
In any case, the example of large investors is very clear: faced with the threat of inflation and currency devaluation, the best way to protect yourself is by acquiring physical gold .…
The post Large International Investors Recommend Investing In Physical Gold appeared first on Buy Gold Guide.
[content] => Array ( [encoded] =>In a current environment of recovery of the global economy, with the threat of rising inflation, spurred on by the multi-million dollar support plans launched in the US by the Federal Reserve, investors are increasingly taking safe haven assets such as metals into account beautiful. In this same week, two large international investors have agreed to recommend physical gold as a means of protection against inflation, rejecting other options such as bitcoin.
The price of gold has risen in recent days and, at the time of writing this post, it was already above $1,816.50 an ounce , its highest level in the last month.
In a global economic environment marked by uncertainty about the recovery, geopolitical instability surrounding the conflict in Afghanistan and fear of a significant rise in inflation, precious metals once again appear as a suitable option to protect investors’ assets.
It is no coincidence that, in recent days, large international investors have advised increasing exposure to the precious metal to face the risk represented by rising inflation.
Möbius: 10% of the portfolio in gold
This is the case of Mark Möbius , an investor of German origin who led the investment firm Templeton ; he was the first to bet on the potential of developing countries, such as Chile and Brazil; he developed the stock markets in Latin America and Asia; and became an adviser to the World Bank and the Asian Development Bank .
In recent statements to the Bloomberg news agency , the veteran investor has opted for gold, preferentially physical, as the means of dealing with inflation and the monetary devaluation that it brings with it.
According to Mobius:
“The global currency devaluation is going to be very significant over the next year, given the incredible amount of money that has been printed . “
The investor believes that the unprecedented economic stimuli that have been put into operation since the beginning of the covid-19 pandemic are going to cause the devaluation of a good number of international currencies in the future.
In the United States alone, trillions of dollars have been invested in these stimulus programs that seek to accelerate economic growth, affected by the pandemic. The programs include the repurchase of treasury bonds and direct aid to consumers.
To counteract this currency devaluation, Möbius advises investors to purchase physical gold instead of the popular gold ETFs:
“ 10% of the investment portfolio should be in physical gold . It is very useful to have physical gold that can be accessed immediately, without the danger of the government confiscating it . ”
Physical gold has multiple advantages over so-called ‘paper gold’ : it has no counterparty risk, is not linked to any entity and has immediate liquidity at any time and place, even in the event of a natural catastrophe or systemic financial crisis.
Paulson: gold, better than bitcoin
The second major investor to have bet on gold in recent days is John Paulson , founder of the hedge fund Paulson & Co , which became famous in 2007 for betting against US subprime mortgage-backed securities. , a maneuver with which he earned more than 4,000 million dollars.
This financier has always been a staunch supporter of gold, which his hedge fund turned to as protection before the 2008 financial crisis.
According to Paulson, also interviewed by Bloomberg , the stars are realigning in favor of the precious metal, which is going to benefit from higher-than-expected inflation due to the huge supply of money pushed from the Federal Reserve to combat the financial effects of the pandemic.
For the US investor, now is the time to buy gold, as the precious metal “ revaluates very positively in times of rising inflation” .
In fact, Paulson has recalled what happened in the 1970s, when the price registered a ‘parabolic’ rise, caused by double-digit inflation.
In those years, the US CPI soared from 2.7% in June 1972 to a record of 14.8% in March 1980. For its part, gold went from $38 an ounce in August 1972 to nothing less than 850 dollars in the early 1980s.
Paulson believes that this situation could have parallels with the current one, and that gold will also benefit from its supply/demand situation, due to the “limited amount of investment gold” that exists in the market.
In addition, the American investor confesses that “I am not a believer in cryptocurrencies” , whose market is the closest thing to “a bubble” and whose value will end up being zero.
Even though the bitcoin supply is limited to 21 million units, Paulson considers this to be “a limited supply of nothing” . In his opinion, as long as the demand exceeds the supply, the price will go up; the problem is that when demand falls, the price will fall with it.
“None of the cryptocurrencies have intrinsic value, except for the fact that there is a limited amount ,” Paulson noted in the interview.
In any case, the example of large investors is very clear: faced with the threat of inflation and currency devaluation, the best way to protect yourself is by acquiring physical gold .…
The post Large International Investors Recommend Investing In Physical Gold appeared first on Buy Gold Guide.
) [summary] =>In a current environment of recovery of the global economy, with the threat of rising inflation, spurred on by the multi-million dollar support plans launched in the US by the Federal Reserve, investors are increasingly taking safe haven assets such as metals into account beautiful. In this same week, two large international investors have agreed to recommend physical gold as a means of protection against inflation, rejecting other options such as bitcoin.
The price of gold has risen in recent days and, at the time of writing this post, it was already above $1,816.50 an ounce , its highest level in the last month.
In a global economic environment marked by uncertainty about the recovery, geopolitical instability surrounding the conflict in Afghanistan and fear of a significant rise in inflation, precious metals once again appear as a suitable option to protect investors’ assets.
It is no coincidence that, in recent days, large international investors have advised increasing exposure to the precious metal to face the risk represented by rising inflation.
Möbius: 10% of the portfolio in gold
This is the case of Mark Möbius , an investor of German origin who led the investment firm Templeton ; he was the first to bet on the potential of developing countries, such as Chile and Brazil; he developed the stock markets in Latin America and Asia; and became an adviser to the World Bank and the Asian Development Bank .
In recent statements to the Bloomberg news agency , the veteran investor has opted for gold, preferentially physical, as the means of dealing with inflation and the monetary devaluation that it brings with it.
According to Mobius:
“The global currency devaluation is going to be very significant over the next year, given the incredible amount of money that has been printed . “
The investor believes that the unprecedented economic stimuli that have been put into operation since the beginning of the covid-19 pandemic are going to cause the devaluation of a good number of international currencies in the future.
In the United States alone, trillions of dollars have been invested in these stimulus programs that seek to accelerate economic growth, affected by the pandemic. The programs include the repurchase of treasury bonds and direct aid to consumers.
To counteract this currency devaluation, Möbius advises investors to purchase physical gold instead of the popular gold ETFs:
“ 10% of the investment portfolio should be in physical gold . It is very useful to have physical gold that can be accessed immediately, without the danger of the government confiscating it . ”
Physical gold has multiple advantages over so-called ‘paper gold’ : it has no counterparty risk, is not linked to any entity and has immediate liquidity at any time and place, even in the event of a natural catastrophe or systemic financial crisis.
Paulson: gold, better than bitcoin
The second major investor to have bet on gold in recent days is John Paulson , founder of the hedge fund Paulson & Co , which became famous in 2007 for betting against US subprime mortgage-backed securities. , a maneuver with which he earned more than 4,000 million dollars.
This financier has always been a staunch supporter of gold, which his hedge fund turned to as protection before the 2008 financial crisis.
According to Paulson, also interviewed by Bloomberg , the stars are realigning in favor of the precious metal, which is going to benefit from higher-than-expected inflation due to the huge supply of money pushed from the Federal Reserve to combat the financial effects of the pandemic.
For the US investor, now is the time to buy gold, as the precious metal “ revaluates very positively in times of rising inflation” .
In fact, Paulson has recalled what happened in the 1970s, when the price registered a ‘parabolic’ rise, caused by double-digit inflation.
In those years, the US CPI soared from 2.7% in June 1972 to a record of 14.8% in March 1980. For its part, gold went from $38 an ounce in August 1972 to nothing less than 850 dollars in the early 1980s.
Paulson believes that this situation could have parallels with the current one, and that gold will also benefit from its supply/demand situation, due to the “limited amount of investment gold” that exists in the market.
In addition, the American investor confesses that “I am not a believer in cryptocurrencies” , whose market is the closest thing to “a bubble” and whose value will end up being zero.
Even though the bitcoin supply is limited to 21 million units, Paulson considers this to be “a limited supply of nothing” . In his opinion, as long as the demand exceeds the supply, the price will go up; the problem is that when demand falls, the price will fall with it.
“None of the cryptocurrencies have intrinsic value, except for the fact that there is a limited amount ,” Paulson noted in the interview.
In any case, the example of large investors is very clear: faced with the threat of inflation and currency devaluation, the best way to protect yourself is by acquiring physical gold .…
The post Large International Investors Recommend Investing In Physical Gold appeared first on Buy Gold Guide.
[atom_content] =>In a current environment of recovery of the global economy, with the threat of rising inflation, spurred on by the multi-million dollar support plans launched in the US by the Federal Reserve, investors are increasingly taking safe haven assets such as metals into account beautiful. In this same week, two large international investors have agreed to recommend physical gold as a means of protection against inflation, rejecting other options such as bitcoin.
The price of gold has risen in recent days and, at the time of writing this post, it was already above $1,816.50 an ounce , its highest level in the last month.
In a global economic environment marked by uncertainty about the recovery, geopolitical instability surrounding the conflict in Afghanistan and fear of a significant rise in inflation, precious metals once again appear as a suitable option to protect investors’ assets.
It is no coincidence that, in recent days, large international investors have advised increasing exposure to the precious metal to face the risk represented by rising inflation.
Möbius: 10% of the portfolio in gold
This is the case of Mark Möbius , an investor of German origin who led the investment firm Templeton ; he was the first to bet on the potential of developing countries, such as Chile and Brazil; he developed the stock markets in Latin America and Asia; and became an adviser to the World Bank and the Asian Development Bank .
In recent statements to the Bloomberg news agency , the veteran investor has opted for gold, preferentially physical, as the means of dealing with inflation and the monetary devaluation that it brings with it.
According to Mobius:
“The global currency devaluation is going to be very significant over the next year, given the incredible amount of money that has been printed . “
The investor believes that the unprecedented economic stimuli that have been put into operation since the beginning of the covid-19 pandemic are going to cause the devaluation of a good number of international currencies in the future.
In the United States alone, trillions of dollars have been invested in these stimulus programs that seek to accelerate economic growth, affected by the pandemic. The programs include the repurchase of treasury bonds and direct aid to consumers.
To counteract this currency devaluation, Möbius advises investors to purchase physical gold instead of the popular gold ETFs:
“ 10% of the investment portfolio should be in physical gold . It is very useful to have physical gold that can be accessed immediately, without the danger of the government confiscating it . ”
Physical gold has multiple advantages over so-called ‘paper gold’ : it has no counterparty risk, is not linked to any entity and has immediate liquidity at any time and place, even in the event of a natural catastrophe or systemic financial crisis.
Paulson: gold, better than bitcoin
The second major investor to have bet on gold in recent days is John Paulson , founder of the hedge fund Paulson & Co , which became famous in 2007 for betting against US subprime mortgage-backed securities. , a maneuver with which he earned more than 4,000 million dollars.
This financier has always been a staunch supporter of gold, which his hedge fund turned to as protection before the 2008 financial crisis.
According to Paulson, also interviewed by Bloomberg , the stars are realigning in favor of the precious metal, which is going to benefit from higher-than-expected inflation due to the huge supply of money pushed from the Federal Reserve to combat the financial effects of the pandemic.
For the US investor, now is the time to buy gold, as the precious metal “ revaluates very positively in times of rising inflation” .
In fact, Paulson has recalled what happened in the 1970s, when the price registered a ‘parabolic’ rise, caused by double-digit inflation.
In those years, the US CPI soared from 2.7% in June 1972 to a record of 14.8% in March 1980. For its part, gold went from $38 an ounce in August 1972 to nothing less than 850 dollars in the early 1980s.
Paulson believes that this situation could have parallels with the current one, and that gold will also benefit from its supply/demand situation, due to the “limited amount of investment gold” that exists in the market.
In addition, the American investor confesses that “I am not a believer in cryptocurrencies” , whose market is the closest thing to “a bubble” and whose value will end up being zero.
Even though the bitcoin supply is limited to 21 million units, Paulson considers this to be “a limited supply of nothing” . In his opinion, as long as the demand exceeds the supply, the price will go up; the problem is that when demand falls, the price will fall with it.
“None of the cryptocurrencies have intrinsic value, except for the fact that there is a limited amount ,” Paulson noted in the interview.
In any case, the example of large investors is very clear: faced with the threat of inflation and currency devaluation, the best way to protect yourself is by acquiring physical gold .…
The post Large International Investors Recommend Investing In Physical Gold appeared first on Buy Gold Guide.
) [4] => Array ( [title] => Gold Is Still Important 50 Years After Breaking Away From The Dollar [link] => https://buygold.guide/gold-is-still-important-50-years-after-breaking-away-from-the-dollar/ [dc] => Array ( [creator] => Rafael Santos ) [pubdate] => Mon, 28 Nov 2022 12:54:10 +0000 [category] => Physical Gold [guid] => https://buygold.guide/?p=22 [description] =>These days mark the 50th anniversary of the decision taken by Richard Nixon to end the Bretton Woods system, in force since the end of World War II, and annul the convertibility of dollars into gold. That decision spelled the end of the last remaining vestige of the gold standard , though the time since has shown the failure of currencies based solely on trust and the continued importance of gold as a tangible asset.
It was on August 15, 1971 , a Sunday afternoon, when the then President of the United States Richard Nixon , after meeting with his advisers at his Camp David residence, publicly announced a historic decision: the temporary suspension (actually it would be definitive) of the convertibility of the dollar into gold .
This measure, described as “the closing of the golden window” , supposed to end the commitment acquired by the United States in the Bretton Woods Agreements , negotiated in 1944 and signed in 1945 by President Truman , to exchange the dollars in possession of foreign countries for gold from their national reserves, with an exchange fixed at $35 an ounce .
The Bretton Woods Agreements
It was a formula to achieve that the US dollar became the international reserve currency, which constituted the reference for the exchange of other currencies, with a fixed rate. In turn, the dollar would be linked to gold, with the aforementioned change of $35 an ounce.
The commitment of the United States to exchange dollar bills for physical gold at any time served to dispel the reluctance that some countries might have regarding this new international system.
The system worked for several decades, which helped international trade to recover from the damage caused by World War II, beginning in the 1950s.
However, already in the 1960s the problems derived from this commitment began to be noticed. In practice, the Bretton Woods system, a version of the so-called gold standard , limited the amount of dollars that the US government could print, since each one had to be backed by a part of the gold deposited in its reserves.
In fact, the commitment to redeem the dollars cost the United States dearly: between the early 1950s and Nixon’s decision in 1971, its national gold reserves fell by 55%.
The closing of the golden window
In 1971, the economic situation in the United States was becoming unsustainable: the growing military expenses derived from the Vietnam War had caused a rise in monetary inflation that forced drastic decisions.
As Richard Nixon announced in his appearance on August 15, 1971, the decision to suspend convertibility was intended “to protect the position of the American dollar as a pillar of world monetary stability . “
In practice, this meant that the dollar was no longer backed by a commodity such as gold and was based solely on the confidence that the US Federal Reserve inspired as an institution; that is, it became a fiduciary or fiat currency.
This meant that the United States could print as many dollars as it wanted, without fear that citizens, foreign governments, or central banks would request their conversion into gold.
A fiat currency system
As Alex J. Pollock points out on the Law & Liberty blog , this new system, which is still in place today, means that the entire world runs on fiat currencies, none of which can be redeemed for gold or any other commodity that works for it.
Furthermore, instead of having a fixed exchange rate, based on convertibility into gold, exchange rates between currencies fluctuate constantly, depending on the functioning of the markets and the interventions of central banks.
In other words: the central banks of the world are free to print as many banknotes as the respective governments want.
According to Pollock, instead of cutting the dollar’s link with gold, the Nixon administration could have devalued the US currency, going from the official price of $35 an ounce of gold to $70.
However, it was not an attractive measure from a political point of view, nor was it known for sure what the ideal figure was; everything depended on the gold that was possessed.
To this day, the inflation of these 50 years has affected the dollar to the point that the same ounce of gold that then traded at 35 dollars, now does so at 1,800: a devaluation of 98% .
Gold always maintains its value
Was Nixon’s decision the right one? At that time, public opinion was favorable and the stock markets reacted upwards.
However, over the years, most economists who have referred to this issue have concluded that ending the discipline established by the Bretton Woods system, which prevented the indiscriminate printing of banknotes and, therefore, the risk of provoking a inflationary credit expansion, was a premature and risky measure.
Not surprisingly, in the years immediately following, the so-called Great Inflation of the 1970s broke out . According to economist Robert Aliber , the Nixon-imposed system of fiat money and floating exchange rates has caused a series of recurring financial crises in the world, during the 1970s, 1980s, 1990s, 2000s, and 2010s.
Faced with this, gold stands as a refuge asset that has maintained its value ever since and has appreciated considerably against the US dollar since 1971: one only has to think that the same ounce of metal that year was exchanged at 35 dollars, it was worth more than $2,000 about a year ago, and is now around $1,800. Dollars or gold? The question is quite clear .…
The post Gold Is Still Important 50 Years After Breaking Away From The Dollar appeared first on Buy Gold Guide.
[content] => Array ( [encoded] =>These days mark the 50th anniversary of the decision taken by Richard Nixon to end the Bretton Woods system, in force since the end of World War II, and annul the convertibility of dollars into gold. That decision spelled the end of the last remaining vestige of the gold standard , though the time since has shown the failure of currencies based solely on trust and the continued importance of gold as a tangible asset.
It was on August 15, 1971 , a Sunday afternoon, when the then President of the United States Richard Nixon , after meeting with his advisers at his Camp David residence, publicly announced a historic decision: the temporary suspension (actually it would be definitive) of the convertibility of the dollar into gold .
This measure, described as “the closing of the golden window” , supposed to end the commitment acquired by the United States in the Bretton Woods Agreements , negotiated in 1944 and signed in 1945 by President Truman , to exchange the dollars in possession of foreign countries for gold from their national reserves, with an exchange fixed at $35 an ounce .
The Bretton Woods Agreements
It was a formula to achieve that the US dollar became the international reserve currency, which constituted the reference for the exchange of other currencies, with a fixed rate. In turn, the dollar would be linked to gold, with the aforementioned change of $35 an ounce.
The commitment of the United States to exchange dollar bills for physical gold at any time served to dispel the reluctance that some countries might have regarding this new international system.
The system worked for several decades, which helped international trade to recover from the damage caused by World War II, beginning in the 1950s.
However, already in the 1960s the problems derived from this commitment began to be noticed. In practice, the Bretton Woods system, a version of the so-called gold standard , limited the amount of dollars that the US government could print, since each one had to be backed by a part of the gold deposited in its reserves.
In fact, the commitment to redeem the dollars cost the United States dearly: between the early 1950s and Nixon’s decision in 1971, its national gold reserves fell by 55%.
The closing of the golden window
In 1971, the economic situation in the United States was becoming unsustainable: the growing military expenses derived from the Vietnam War had caused a rise in monetary inflation that forced drastic decisions.
As Richard Nixon announced in his appearance on August 15, 1971, the decision to suspend convertibility was intended “to protect the position of the American dollar as a pillar of world monetary stability . “
In practice, this meant that the dollar was no longer backed by a commodity such as gold and was based solely on the confidence that the US Federal Reserve inspired as an institution; that is, it became a fiduciary or fiat currency.
This meant that the United States could print as many dollars as it wanted, without fear that citizens, foreign governments, or central banks would request their conversion into gold.
A fiat currency system
As Alex J. Pollock points out on the Law & Liberty blog , this new system, which is still in place today, means that the entire world runs on fiat currencies, none of which can be redeemed for gold or any other commodity that works for it.
Furthermore, instead of having a fixed exchange rate, based on convertibility into gold, exchange rates between currencies fluctuate constantly, depending on the functioning of the markets and the interventions of central banks.
In other words: the central banks of the world are free to print as many banknotes as the respective governments want.
According to Pollock, instead of cutting the dollar’s link with gold, the Nixon administration could have devalued the US currency, going from the official price of $35 an ounce of gold to $70.
However, it was not an attractive measure from a political point of view, nor was it known for sure what the ideal figure was; everything depended on the gold that was possessed.
To this day, the inflation of these 50 years has affected the dollar to the point that the same ounce of gold that then traded at 35 dollars, now does so at 1,800: a devaluation of 98% .
Gold always maintains its value
Was Nixon’s decision the right one? At that time, public opinion was favorable and the stock markets reacted upwards.
However, over the years, most economists who have referred to this issue have concluded that ending the discipline established by the Bretton Woods system, which prevented the indiscriminate printing of banknotes and, therefore, the risk of provoking a inflationary credit expansion, was a premature and risky measure.
Not surprisingly, in the years immediately following, the so-called Great Inflation of the 1970s broke out . According to economist Robert Aliber , the Nixon-imposed system of fiat money and floating exchange rates has caused a series of recurring financial crises in the world, during the 1970s, 1980s, 1990s, 2000s, and 2010s.
Faced with this, gold stands as a refuge asset that has maintained its value ever since and has appreciated considerably against the US dollar since 1971: one only has to think that the same ounce of metal that year was exchanged at 35 dollars, it was worth more than $2,000 about a year ago, and is now around $1,800. Dollars or gold? The question is quite clear .…
The post Gold Is Still Important 50 Years After Breaking Away From The Dollar appeared first on Buy Gold Guide.
) [summary] =>These days mark the 50th anniversary of the decision taken by Richard Nixon to end the Bretton Woods system, in force since the end of World War II, and annul the convertibility of dollars into gold. That decision spelled the end of the last remaining vestige of the gold standard , though the time since has shown the failure of currencies based solely on trust and the continued importance of gold as a tangible asset.
It was on August 15, 1971 , a Sunday afternoon, when the then President of the United States Richard Nixon , after meeting with his advisers at his Camp David residence, publicly announced a historic decision: the temporary suspension (actually it would be definitive) of the convertibility of the dollar into gold .
This measure, described as “the closing of the golden window” , supposed to end the commitment acquired by the United States in the Bretton Woods Agreements , negotiated in 1944 and signed in 1945 by President Truman , to exchange the dollars in possession of foreign countries for gold from their national reserves, with an exchange fixed at $35 an ounce .
The Bretton Woods Agreements
It was a formula to achieve that the US dollar became the international reserve currency, which constituted the reference for the exchange of other currencies, with a fixed rate. In turn, the dollar would be linked to gold, with the aforementioned change of $35 an ounce.
The commitment of the United States to exchange dollar bills for physical gold at any time served to dispel the reluctance that some countries might have regarding this new international system.
The system worked for several decades, which helped international trade to recover from the damage caused by World War II, beginning in the 1950s.
However, already in the 1960s the problems derived from this commitment began to be noticed. In practice, the Bretton Woods system, a version of the so-called gold standard , limited the amount of dollars that the US government could print, since each one had to be backed by a part of the gold deposited in its reserves.
In fact, the commitment to redeem the dollars cost the United States dearly: between the early 1950s and Nixon’s decision in 1971, its national gold reserves fell by 55%.
The closing of the golden window
In 1971, the economic situation in the United States was becoming unsustainable: the growing military expenses derived from the Vietnam War had caused a rise in monetary inflation that forced drastic decisions.
As Richard Nixon announced in his appearance on August 15, 1971, the decision to suspend convertibility was intended “to protect the position of the American dollar as a pillar of world monetary stability . “
In practice, this meant that the dollar was no longer backed by a commodity such as gold and was based solely on the confidence that the US Federal Reserve inspired as an institution; that is, it became a fiduciary or fiat currency.
This meant that the United States could print as many dollars as it wanted, without fear that citizens, foreign governments, or central banks would request their conversion into gold.
A fiat currency system
As Alex J. Pollock points out on the Law & Liberty blog , this new system, which is still in place today, means that the entire world runs on fiat currencies, none of which can be redeemed for gold or any other commodity that works for it.
Furthermore, instead of having a fixed exchange rate, based on convertibility into gold, exchange rates between currencies fluctuate constantly, depending on the functioning of the markets and the interventions of central banks.
In other words: the central banks of the world are free to print as many banknotes as the respective governments want.
According to Pollock, instead of cutting the dollar’s link with gold, the Nixon administration could have devalued the US currency, going from the official price of $35 an ounce of gold to $70.
However, it was not an attractive measure from a political point of view, nor was it known for sure what the ideal figure was; everything depended on the gold that was possessed.
To this day, the inflation of these 50 years has affected the dollar to the point that the same ounce of gold that then traded at 35 dollars, now does so at 1,800: a devaluation of 98% .
Gold always maintains its value
Was Nixon’s decision the right one? At that time, public opinion was favorable and the stock markets reacted upwards.
However, over the years, most economists who have referred to this issue have concluded that ending the discipline established by the Bretton Woods system, which prevented the indiscriminate printing of banknotes and, therefore, the risk of provoking a inflationary credit expansion, was a premature and risky measure.
Not surprisingly, in the years immediately following, the so-called Great Inflation of the 1970s broke out . According to economist Robert Aliber , the Nixon-imposed system of fiat money and floating exchange rates has caused a series of recurring financial crises in the world, during the 1970s, 1980s, 1990s, 2000s, and 2010s.
Faced with this, gold stands as a refuge asset that has maintained its value ever since and has appreciated considerably against the US dollar since 1971: one only has to think that the same ounce of metal that year was exchanged at 35 dollars, it was worth more than $2,000 about a year ago, and is now around $1,800. Dollars or gold? The question is quite clear .…
The post Gold Is Still Important 50 Years After Breaking Away From The Dollar appeared first on Buy Gold Guide.
[atom_content] =>These days mark the 50th anniversary of the decision taken by Richard Nixon to end the Bretton Woods system, in force since the end of World War II, and annul the convertibility of dollars into gold. That decision spelled the end of the last remaining vestige of the gold standard , though the time since has shown the failure of currencies based solely on trust and the continued importance of gold as a tangible asset.
It was on August 15, 1971 , a Sunday afternoon, when the then President of the United States Richard Nixon , after meeting with his advisers at his Camp David residence, publicly announced a historic decision: the temporary suspension (actually it would be definitive) of the convertibility of the dollar into gold .
This measure, described as “the closing of the golden window” , supposed to end the commitment acquired by the United States in the Bretton Woods Agreements , negotiated in 1944 and signed in 1945 by President Truman , to exchange the dollars in possession of foreign countries for gold from their national reserves, with an exchange fixed at $35 an ounce .
The Bretton Woods Agreements
It was a formula to achieve that the US dollar became the international reserve currency, which constituted the reference for the exchange of other currencies, with a fixed rate. In turn, the dollar would be linked to gold, with the aforementioned change of $35 an ounce.
The commitment of the United States to exchange dollar bills for physical gold at any time served to dispel the reluctance that some countries might have regarding this new international system.
The system worked for several decades, which helped international trade to recover from the damage caused by World War II, beginning in the 1950s.
However, already in the 1960s the problems derived from this commitment began to be noticed. In practice, the Bretton Woods system, a version of the so-called gold standard , limited the amount of dollars that the US government could print, since each one had to be backed by a part of the gold deposited in its reserves.
In fact, the commitment to redeem the dollars cost the United States dearly: between the early 1950s and Nixon’s decision in 1971, its national gold reserves fell by 55%.
The closing of the golden window
In 1971, the economic situation in the United States was becoming unsustainable: the growing military expenses derived from the Vietnam War had caused a rise in monetary inflation that forced drastic decisions.
As Richard Nixon announced in his appearance on August 15, 1971, the decision to suspend convertibility was intended “to protect the position of the American dollar as a pillar of world monetary stability . “
In practice, this meant that the dollar was no longer backed by a commodity such as gold and was based solely on the confidence that the US Federal Reserve inspired as an institution; that is, it became a fiduciary or fiat currency.
This meant that the United States could print as many dollars as it wanted, without fear that citizens, foreign governments, or central banks would request their conversion into gold.
A fiat currency system
As Alex J. Pollock points out on the Law & Liberty blog , this new system, which is still in place today, means that the entire world runs on fiat currencies, none of which can be redeemed for gold or any other commodity that works for it.
Furthermore, instead of having a fixed exchange rate, based on convertibility into gold, exchange rates between currencies fluctuate constantly, depending on the functioning of the markets and the interventions of central banks.
In other words: the central banks of the world are free to print as many banknotes as the respective governments want.
According to Pollock, instead of cutting the dollar’s link with gold, the Nixon administration could have devalued the US currency, going from the official price of $35 an ounce of gold to $70.
However, it was not an attractive measure from a political point of view, nor was it known for sure what the ideal figure was; everything depended on the gold that was possessed.
To this day, the inflation of these 50 years has affected the dollar to the point that the same ounce of gold that then traded at 35 dollars, now does so at 1,800: a devaluation of 98% .
Gold always maintains its value
Was Nixon’s decision the right one? At that time, public opinion was favorable and the stock markets reacted upwards.
However, over the years, most economists who have referred to this issue have concluded that ending the discipline established by the Bretton Woods system, which prevented the indiscriminate printing of banknotes and, therefore, the risk of provoking a inflationary credit expansion, was a premature and risky measure.
Not surprisingly, in the years immediately following, the so-called Great Inflation of the 1970s broke out . According to economist Robert Aliber , the Nixon-imposed system of fiat money and floating exchange rates has caused a series of recurring financial crises in the world, during the 1970s, 1980s, 1990s, 2000s, and 2010s.
Faced with this, gold stands as a refuge asset that has maintained its value ever since and has appreciated considerably against the US dollar since 1971: one only has to think that the same ounce of metal that year was exchanged at 35 dollars, it was worth more than $2,000 about a year ago, and is now around $1,800. Dollars or gold? The question is quite clear .…
The post Gold Is Still Important 50 Years After Breaking Away From The Dollar appeared first on Buy Gold Guide.
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