05-11-2024, 08:08 PM
This post was last modified 05-12-2024, 06:38 PM by Maxmars.
Edit Reason: grammar
For reasons that are probably 'simple' to the global economists, but mercurial to me, banks all over the globe have begun to buy up gold. According to the attached article, the strengthening of the US Dollar has caused a buying spree of bullion by central banks all over the globe, but most notable China, which over the last year and a half has increased its gold reserve unabashedly.
From BusinessInsider.com: The US dollar is so strong that China's central bank, among others, just keeps loading up on gold
China's economy is in a funk, and people are rushing out to buy gold as a safe-haven asset to hedge against economic uncertainties, sending prices of the precious metal to record highs.
The country's central bank has also gotten into the act, adding 60,000 troy ounces of gold to its stash in April, according to official data released Tuesday. It marked the 18th straight month the People's Bank of China added to its gold reserves.
But it's not just about economic uncertainty. The heightened interest in gold is also a pushback to the strong US dollar, which is making it too expensive for emerging nations such as China to import goods.
The US Dollar Index — which measures the value of the green against a basket of six other currencies — has risen 4% this year and 10% since the start of 2022. This is because of the Federal Reserve's interest-rate hikes since March 2022, which tend to strengthen the dollar.
Turkey, India, Kazakhstan, Oman, Kyrgyzstan, and Poland are all loading up significantly, and the dollars' strength is reported not a good thing... for the rest of the world.
The rush into gold assets may not bode well for the US dollar in the longer run, should the currency continue to gain.
"A stronger USD would weaken its role as reserve currency," economists at Allianz, an international financial-services firm, wrote in a report in June last year. "If access to USD becomes more expensive, borrowers will search for alternatives."
Apparently the world fears dependence on the US dollar as they try to become independent of it, and fear vulnerability to US sanctions...
It appears we can't do anything right... strong currency in the US has been maneuvered into meaning bad things for those who wish to remain adversarial to us, weak US dollar means American consumers drift away from prosperity... we just can't earn enough. How to 'win' the global game is less important than how to survive.
Can we imagine what the banks will do next? Does it matter, they win in any case.
From BusinessInsider.com: The US dollar is so strong that China's central bank, among others, just keeps loading up on gold
- China's economy is struggling, leading to a surge in gold purchases as a safe-haven asset.
- Central banks are on a gold-buying spree, contributing to record-high spot gold prices.
- Other central banks are also buying gold to diversify their assets on the back of a strong US dollar.
China's economy is in a funk, and people are rushing out to buy gold as a safe-haven asset to hedge against economic uncertainties, sending prices of the precious metal to record highs.
The country's central bank has also gotten into the act, adding 60,000 troy ounces of gold to its stash in April, according to official data released Tuesday. It marked the 18th straight month the People's Bank of China added to its gold reserves.
But it's not just about economic uncertainty. The heightened interest in gold is also a pushback to the strong US dollar, which is making it too expensive for emerging nations such as China to import goods.
The US Dollar Index — which measures the value of the green against a basket of six other currencies — has risen 4% this year and 10% since the start of 2022. This is because of the Federal Reserve's interest-rate hikes since March 2022, which tend to strengthen the dollar.
Turkey, India, Kazakhstan, Oman, Kyrgyzstan, and Poland are all loading up significantly, and the dollars' strength is reported not a good thing... for the rest of the world.
The rush into gold assets may not bode well for the US dollar in the longer run, should the currency continue to gain.
"A stronger USD would weaken its role as reserve currency," economists at Allianz, an international financial-services firm, wrote in a report in June last year. "If access to USD becomes more expensive, borrowers will search for alternatives."
Apparently the world fears dependence on the US dollar as they try to become independent of it, and fear vulnerability to US sanctions...
It appears we can't do anything right... strong currency in the US has been maneuvered into meaning bad things for those who wish to remain adversarial to us, weak US dollar means American consumers drift away from prosperity... we just can't earn enough. How to 'win' the global game is less important than how to survive.
Can we imagine what the banks will do next? Does it matter, they win in any case.
