I am surprised by the chart. A few countries, ie Haiti, have purchased a few tons of gold since 2009. Seems odd.
I confess I am suspicious, perhaps someone is building a bug-out bag? Hope not.
Nope. The charts that have been posted show that most first world countries’ gold reserves are steady or dropping. Those that are steady are not exchanging it with anybody. Those that are selling it off aren’t selling it to other Western first world nations since they aren’t buying it.
The odd-men out are Russia and China. Since their reserves increases are a lot more than anybody is selling, they are getting it from other sources. Russia from its own local mining companies, China from overseas. Some of the latter is from places like Germany that are selling off, but that’s not enough. So they get it from private buyers.
Country to country sales are rare. As noted, some countries that are in trouble are selling gold. But that goes on the open market which is private buyer dominated. The sellers don’t care who buys it as long as they get their cash.
Those videos showing pallets of gold being moved around in the NY Federal Reserve vaults are private transactions for the most part.
gold is more than worth it! gold has its own value and is much higher than any currency in the world.
I would happily give you a 1/4 oz British Gold Guinea for $5000 in US banknotes.
I don’t think we’re in any big disagreement. A reason the U.S. isn’t selling bullion is partly psychological, and What would be the point anyway?
But you sure know how to spin the chart! China and Russia ARE important countries and have been increasing their gold reserves HUGELY. Making the aggregate central bank increase large. China is the 2nd-biggest economy in the world; calling its currency “unimportant in international trade” may be an exaggeration:
The chart shows that 22 countries have more than doubled their gold reserves this decade. Among gold sellers, Germany, with its tiny 1% sale, is in 2nd place with 37 tonnes. Contrast this with Russia’s purchase of 1464 tonnes.
The answer to my question: “Are central banks still increasing their gold reserves?” was a simple ‘Yes (on average).’ HTH.
One can also claim the value of cereal box tops is higher than any currency in the world by this “logic”.
How do you compare the value of one thing to currency except by that same currency? And if you do, just look at the massive instability in gold prices over the decades. And how much money you’d lose on average when inflation is taken into account. And that doesn’t take into account if you had bought govt. bonds instead and gotten an actual ROI.
Sure, if there are low points and high points and say “Say you bought at X and sold at Y, you made money!” But that’s 20/20 hindsight and doesn’t apply to the average over time. Pick two random times to buy and sell and odds are you lose. But if you bought a stable currency and sold it at a random time, you’d do better on average.
How on Earth does anyone think that gold is some sort of magic wealth generator?
Wiki has this:
Your facts are off. China is the largest producer of gold by a significant margin. Like 30% clear of Australia.
Second is Australia, third is Russia, then the US and Canada. Aussie and Russia are comparable, US/Canada a way behind.
No matter how much you despise gold — or despise the people who don’t despise gold — you do your fellow gold haters a disservice by spreading disinformation and thereby lowering their credibility.
In 1970 you could purchase 1 troy ounce of gold in New York City for $36.41. That gold could now be sold for $1500.30. (This ignores costs to store or safeguard your gold.)
Had that same $36.41 been invested in U.S. Treasury bonds (with interest recalculated at the beginning of every September using the 10-Year Treasury Constant Maturity Rate) you would now have $730 (ignoring transaction costs).
$1500.30 > $730. Hope this helps.
I disagree. No one thinks of gold as “money”. Many people, possibly everyone, thinks of gold as valuable, but that’s an entirely different thing.
OK. Why did you pick 1970?
Why did he pick U.S. Treasury bonds? I’m ready to do a comparison with the DJIA to solve the following puzzle, but first would need data showing the dividends paid on the DJIA, since of course we’d reinvest them. Can any good Googler provide that series?
Alice and Bob each inherit $1000 worth of DJIA in 1950. Bob reinvests his dividends, and still has all that stock. Alice also reinvests hers until date X, when she trades all her stocks for gold; she still has all that gold. For what values of X (call this the Alice-win set) would Alice have more wealth than Bob today?
Every single day since Trump’s election would be in the Alice win-set! That win-set also includes many dates near market highs since 1997. Several dates in the 1960’s or 70’s would also be in the Alice win-set if the DJIA yield averaged less than 1.3% and my program is correct.
All of which is beside the point. Gold may or many not outperform some other form of savings over some period — so what? (And the point which it is beside is different than the question OP asks. :smack: )
We could do that same with any number of stocks, not to mention real estate, art, collectables, etc.
You also could have bought gold for $2178 in 1980 and sold it for $386 in 2001.
Gold is simply a commodity. It goes up and down.
So you’re taking my side of the “debate.”
Well …
… Except for this gibberish. If it seems to help your side of an “argument” to use so-called “constant dollars”, at least ***say that’s what you’re doing.
So you made a selective choice. People point this out. You respond that it’s gibberish. I am completely less than impressed.
You keep twisting and twisting and twisting. Claiming all sorts of complete refutation of people’s arguments but missing the actual points being made and burying yourself deeper in the process. Even some of your own cites refute you!
I apologize for the following off-topic tirade. But we are here to fight ignorance, and the ignorance I address is huge. Nor do I take kindly to baseless accusations against me.
Wow. Almost every single sentence you’ve contributed to this thread, or the other one, has been completely wrong.
Let’s start by obliterating your claim, from the other thread,“Note that many European countries are reducing their gold reserves since they are just a waste of money in terms of storage and other fees.”
Upthread we’ve found a source for central bank sales. In most cases the central bank’s gold stock did not change over the last decade, or changed by too little to register given the source’s 1-tonne granularity. I now present the results for all European countries whose gold stock changed by 1 tonne or more:
Belarus purchased 24 tonnes of gold during the last decade.
Belgium sold 1 tonne.
Bosnia and Herz purchased 2 tonnes.
Czech Republic sold 4 tonnes.
France purchased 1 tonne.
Germany sold a whopping 37 tonnes, 1% of its stock.
Greece purchased 1 tonne.
Hungary purchased 29 tonnes.
Poland purchased 26 tonnes.
Russia purchased 1464 tonnes
Serbia purchased 7 tonnes.
Turkey purchased 138 tonnes.
Ukraine sold 3 tonnes.
If we exclude Russia (a special case?) this is still a net purchase of 183 tonnes. Without excluding Russia, the net purchase is 1647 tonnes.
Dopers: Please raise your hand if you think this is compatible with ftg’s claim
“Note that many European countries are reducing their gold reserves since they are just a waste of money in terms of storage and other fees.”
The only significant sale was Germany’s. (IIRC that was part of an experiment — they wanted to see how long it would take the N.Y. Fed to deliver Germany’s gold!)
Yes, I used 1970 as a starting part for one comparison. I also mentioned that many other starting dates, including some way back in the 1960’s, would work even besting the DJIA with dividends reinvested. ***And I’ve repeatedly stressed that these comparisons are largely irrelevant anyway to any essential point ***— I just make them to obliterate the nonsense that gold is ALWAYS a bad investment.
Finally, see if you can understand the following:When discussing apples, if one of the debaters thinks oranges, specifically seven oranges, would be a more useful example than apples, it is the responsibility of that debater to write the word “oranges.”
If instead he discusses an example involving “seven apples”, where he actually is talking about “seven oranges” then said debater is remiss.
Do you understand that? To write “apples” when one means “oranges” is inappropriate. Do we need to put that up for a vote also?
“Constant dollars” are sometimes a useful way to think about a matter of economics or pricing. No argument there. In prior posts I bypass the need for inflation adjustment by comparing TWO investments and using nominal dollars at BOTH ends of an investment period. Others may find constant dollars convenient for some purposes.
But so-called “constant dollars” [SIZE=“4”]are not dollars.[/SIZE] You don’t slip them in to a paragraph to inflate your figures hoping Septimus is too dull to notice! Capische?
I’ll give Dr. Deth the benefit of the doubt and guess that he Googled over-quickly, missed the word “constant,” and didn’t notice the absurdity of the number derived. Yet you have no such excuse. I pointed out Dr Deth’s blunder and you retort with more gibberish: “twisting and twisting.” Seriously: You couldn’t even figure this much out??
HTH.
By the way:
I've never thought of myself as a "gold bug." Until 2019 the last time I purchased gold was trinkets for Mrs. Septimus two decades ago. (I try not to be overly niggardly but Mrs. Septimus prefers automobiles and iPhones to gold trinkets.)
Some months ago, based on my readings, I did sell a moderate-sized fraction of my stocks and used the proceeds to buy gold, both physical and ETF, as a "hedge." I got lucky. I wish I'd traded a larger fraction of my stocks.
I did not buy the gold because I thought we were on the verge of Armageddon. I think I was aware that gold cannot be used as toilet paper, but I bought it anyway. I apologize if any Doper is offended that I purchased gold and thinks that gold buyers are too stupid to post in these forums. Nope, gold is simply a commodity like oil, pork bellies, and silver.
There is nothing special about it.
There are hundred of stocks that would have dont better, and overall, the DOW does better than gold.
Sure, you can cherry pick lots of dates and come to the conclusion either that gold is a crap investment or fantastic. Same with the DOW, same with Pork bellies.
Yeah, sure, adjusted for inflation- but just so both figures are, it comes out the same.
There is nothing special about gold, it is no more a hedge against inflation than Pork bellies are.
Who do you think you’re arguing against here? Certainly not against me nor against anyone else in the thread.
My only comment to YOU is that we don’t refer to oranges as apples, and we don’t refer to “constant dollars” as dollars. You may find that thinking of “constant dollars” simplifies your thinking, but refer to them correctly when you mention them.
Please acknowledge this, and pledge to exert more care in future. Otherwise your posts will cease to be worth reading.
An excellent point that you should consider.