There is more evidence of how European central banks are equalizing their monetary gold reserves proportionally to Gross Domestic Product (GDP). Secret agreements make countries sell or buy gold to balance gold reserves within Europe, and relative to large economies abroad. Evenly distributed gold reserves are a requirement for a stable transition towards a gold standard whereby concurrently the debt overhang can be extinguished. Europe has been preparing for this reset.
That’s why I write about a gold price targeting system. By the way, if central banks use their gold revaluation account to cancel debt they cannot let the gold price sink - or they have a loss. A floor under the gold price must be set.
Hi Jan. This article was news to me, given Europe's push for CBDC and current investigation on possibilities of it's implementation that will end next year.
Do You think Europe could create gold-backed DC similarly to what is China working on?
Had You analysed it possibly in relation to BRICS hoarding gold in recent years. US under Biden's administration speaking more openly about returning to gold standard (disregarding lack of moves in terms of reserves) and most importantly BIS upgrading gold from Tier-3 to Tier-1 Asset in 2018?
Very compelling/interesting, though I have to question your conclusion that CBs are looking to transition to a gold standard. That seems like an unnecessary step that only complicates the rescue mission when a monetary reset is required.
Simpler alternative: Instead, the ECB could "revalue" gold by increasing the price at which they are willing to buy physical, in very large quantities. Imagine a 50x price increase for physical. Since they mark their reserves to market, this would have an immediate impact on their reserves which has positive knock on effects.
That's a similar outcome to a gold standard, but instead of having a fixed price of Euros/gold, the gold price can still float internationally. This gives some more flexibility to central banks to ease etc. I don't see how CBs would ever choose to remove tools that are at their disposal if they are not 100% forced to.
The above idea has been discussed elsewhere at length by FOFOA, who's studied some very curious posts by (probably) ex-central bankers from the 90's on the US Gold forums. The secrecy behind CB moves makes accounts like the above all the more interesting and compelling, even if it's nearly impossible to verify.
FOFOA's posts are long and his recent stuff is behind a paywall, but it is 100% consistent with the rebalancing of gold reserves you describe and would be a simpler transition than a fully fledged gold standard.
I am afraid you are whistling past the graveyard where the European corpses will soon be buried. EU or Eurozone whatever you want to call it, will be falling apart, finished in the near future. Then it will be every country for itself, trying to sauve qui peut. Rgds, BV
That’s why I write about a gold price targeting system. By the way, if central banks use their gold revaluation account to cancel debt they cannot let the gold price sink - or they have a loss. A floor under the gold price must be set.
Mooi en duidelijk artikel heel leerzaam
Hi Jan. This article was news to me, given Europe's push for CBDC and current investigation on possibilities of it's implementation that will end next year.
Do You think Europe could create gold-backed DC similarly to what is China working on?
What are possible implications in your opinion?
To be honest, I don’t know. The above is a “Plan B.” How many other plans there are and how they fit together is hard to tell.
Sounds valid.
Had You analysed it possibly in relation to BRICS hoarding gold in recent years. US under Biden's administration speaking more openly about returning to gold standard (disregarding lack of moves in terms of reserves) and most importantly BIS upgrading gold from Tier-3 to Tier-1 Asset in 2018?
Very compelling/interesting, though I have to question your conclusion that CBs are looking to transition to a gold standard. That seems like an unnecessary step that only complicates the rescue mission when a monetary reset is required.
Simpler alternative: Instead, the ECB could "revalue" gold by increasing the price at which they are willing to buy physical, in very large quantities. Imagine a 50x price increase for physical. Since they mark their reserves to market, this would have an immediate impact on their reserves which has positive knock on effects.
That's a similar outcome to a gold standard, but instead of having a fixed price of Euros/gold, the gold price can still float internationally. This gives some more flexibility to central banks to ease etc. I don't see how CBs would ever choose to remove tools that are at their disposal if they are not 100% forced to.
The above idea has been discussed elsewhere at length by FOFOA, who's studied some very curious posts by (probably) ex-central bankers from the 90's on the US Gold forums. The secrecy behind CB moves makes accounts like the above all the more interesting and compelling, even if it's nearly impossible to verify.
FOFOA's posts are long and his recent stuff is behind a paywall, but it is 100% consistent with the rebalancing of gold reserves you describe and would be a simpler transition than a fully fledged gold standard.
Hi Jan,
I am afraid you are whistling past the graveyard where the European corpses will soon be buried. EU or Eurozone whatever you want to call it, will be falling apart, finished in the near future. Then it will be every country for itself, trying to sauve qui peut. Rgds, BV