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Why is the BoE/USA not buying gold? - Any thoughts anyone?
The very quick answer to this is that the USA and UK are the main proponents of Keynesian economic policy, which, amongst many other things, sees the gold standard as a barbarous relic. Hence, gold has no role to play as 'money' as described by Keynes. It's just a commodity, such as copper - many would argue that copper is the more useful. Therefore, to start buying gold now would be an admission of defeat and that the politicians have got it wrong. It is very rare for a politician to admit they are wrong - you may have noticed.
It's also important to consider that both the USA and UK have not experienced hyperinflation - unlike Germany (which holds a lot of gold now). Empire's end with deflationary busts - Britain's started during the American civil war; the Empire's currencies were linked to the pound (even used the pound in most cases) and the pound rose in value causing deflation in the Empire and a rise in separatist movements. Then Germany formed and competed directly with Britain, and war saw us off very quickly. For the US, the dollar will ultimately rise and cause massive deflation in the world, eventually resulting in the decline of the US and rise of China.
So, we are ultimately looking at a huge deflationary bust coming early in the next decade - according to MA. But, for now, we have an inflationary wave due to shortages - not massive demand - which should be good for gold and commodities in general. As ever, it is timing and guessing what the manipulators will do next that matters. Ideally, we will be wanting to hold physical cash when the deflation comes. A government cryptocurrency may make that impossible, but I read this week that Sunak said he will not do away with cash. Then why bother with a cryptocurrency at all? - I don't trust him one inch. So, if there is a cryptocurrency only, it could make sense to hold gold even in the deflationary bust. At least you will have something at the end instead of a government helping itself from your crypto account.
https://www.armstrongeconomics.com/future-forecasts/ecm/the-sixth-wave-2032/
Now, wasn't that more interesting than writing about cars, apple trees and badgers?
IMO the US/UK currently lacks the political apparatus to make sound financial decisions
That said I don't think China has any appetite for buying vast quantities of gold at $1800 an ounce either
Personally I'm not expecting gold to fly - which is fine - retail demand would suffer at $2000 plus
Miners can make a decent profit at this range
The issue going forward is dwindling reserves - Egypt and West Africa are the place(s) to be so I am very hopeful that Centamin LTH's will do well - Cheers!
(apologies in advance to redsparrow and other theologians for my layman's reply ;-)
Yes, an even quicker reply is that the USA and UK haven't got a clue what they're doing.
I think China is very happy to mine gold at $1800, though.
Possibly the key to it is UK has very little physical and the US ,well check out USA bullion reserves full auditing.
The more you dig into this the more sceptical you will become.
They no doubt have something filling the space in the vaults ,but what?
Yes Red Sparrow your post was far more interesting tho my understanding is why badgers are on this board is the inverse geometric correlation between their numbers and the price of gold. Gold’s alpha relates to badgers’ beta, the relative risk to badgers around here is greedy farmers, badgers numbers go down as they illegally cull them when food prices go down and they worry about their profit, food prices going down is deflationary, however as Sunshine Gold says “ Gold is neither a perfect inflation nor deflation hedge. Its price also depends on the market sentiment and risk aversion ”; when badgers’ risk aversion exceeds the market’s risk aversion gold should rise and vice versa. It is highly complex, but as Andrew MaGuire says gold should always go up, the corollary of which is badgers’ numbers go down, except both don’t. Maybe the absence of badgers in Egypt has something to do with it, or maybe some long range ones secretly burrowed under the Sukari wall and brought it down, hoping to increase their numbers. A fruitful subject of research and badgers are v worth of being included on this board, ad the price of old cars etc and all that affects the gold price and our beloved Centamin. Thanks RedSPARROW and a great weekend all
Farmers ALWAYS worry about their profit. Most around these parts keep their cows shut up in massive sheds and the fields are cropped for silage several times without a cow setting hoof in em. The cows are milked by computer operated parlour when the animal feels the need and farmer Giles doesn't have to get his hands dirty. Now that's progress?
The badger is removed from the TB equation as will fiat money some day????
When and will Fiat Gold be removed is important.
The Institutions Big Money earner.
Every investor is being milked by computer these days.
Problem is that so many of the farms are actully owned by big conglomerates with accountants in charges , james Dyson, yes that stinker who supported Brexit and is producing his overpriced products in India, he owns lot's of farms in the UK now!
Ther way some of the animals , especially cows are treatedt in the UK farming and food industries is appauling , unbeleivable cruety to save a few pence here and there!
Not asking much really to let them see and taste grass really is it?
The reason they prefer to cull Badgers is their urine and the droppings spread TB to cattle, and at £2000 per cow and the herd culled ,plus loss of milk for months = no income.
Hay and silage are ok hay being dried in strong UV light and silage ,the fermentation process kills all.