Could liquidity and USD funding needs be a factor here - alongside the longer-term sanctions/asset-freeze risk that other countries saw after Russia’s reserves were frozen?
Who is selling their physical gold for countries to buy? Is it all coming from gold mines? Would love to see an article on gold production and who is buying from whom.
3500 tons annually come from mines worldwide. Around 1000 tons are bought (officially) by central banks worldwide. Some more are bought inofficially (China for sure). But still the central banks can cover their investment with mine production i guess.
Seems like the Shanghai exchange is playing it wisely. Dump treasuries whilst keeping their prices higher than US exchanges for gold and silver. Then metals bought in the US cheaper can be sold in Shanghai for more. US traders think they got a great deal and made a big profit on the arbitrage, when all they got was shitty dollars and Shanghai ends up with more metals. Not sure I understand this all, but seems pretty reasonable on their part.
If the BRICS unit contains 40% gold, would it be consistent that the central banks be targeting roughly a 40% gold in reserves? And if the price continues rising, we’ll get there faster, massaged downwards but the declining dollars in which that value (for now) is reflected.
I said, "upcoming BRICS currency." We know the yuan will be a part of it, along with gold and other commodities; that's based upon public statements that have been released. The upcoming BRICS currency has been in discussion among its members since 2008; the Euro was in discussion among its members for 25 years before it was put in effect. These multinational currency roll-outs take time.
Nice article, you should have added the effect it has had on the US economy.
Could liquidity and USD funding needs be a factor here - alongside the longer-term sanctions/asset-freeze risk that other countries saw after Russia’s reserves were frozen?
Excellent article. Thank you.
Who is selling their physical gold for countries to buy? Is it all coming from gold mines? Would love to see an article on gold production and who is buying from whom.
3500 tons annually come from mines worldwide. Around 1000 tons are bought (officially) by central banks worldwide. Some more are bought inofficially (China for sure). But still the central banks can cover their investment with mine production i guess.
Seems like the Shanghai exchange is playing it wisely. Dump treasuries whilst keeping their prices higher than US exchanges for gold and silver. Then metals bought in the US cheaper can be sold in Shanghai for more. US traders think they got a great deal and made a big profit on the arbitrage, when all they got was shitty dollars and Shanghai ends up with more metals. Not sure I understand this all, but seems pretty reasonable on their part.
If the BRICS unit contains 40% gold, would it be consistent that the central banks be targeting roughly a 40% gold in reserves? And if the price continues rising, we’ll get there faster, massaged downwards but the declining dollars in which that value (for now) is reflected.
Fabulous Doug, I just pray the American people might wake up , sooner than later 🙏
I also think that China wants to promote the upcoming BRICS currency as the replacement.
Could be but BRICS currency isn't a "thing" yet, however Xi said that he wants the Remimbi to be the world's reserve currency.
I said, "upcoming BRICS currency." We know the yuan will be a part of it, along with gold and other commodities; that's based upon public statements that have been released. The upcoming BRICS currency has been in discussion among its members since 2008; the Euro was in discussion among its members for 25 years before it was put in effect. These multinational currency roll-outs take time.
So if these countries are selling, who is buying? There are 2 halves to the transactions. Let's see an article on who is buying US debt and why.
Yes, I noticed the upcoming. I wonder though will it come in to existence; why would Xi say what he said without the BRICS members being in agreement?
Doing it ahead of this new war we are about to start with Iran .