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Article posted Mar 28 2010, 2:38 AM Category: Economy Source: MoneyNews.com Print

Central Banks Stashing Away Gold at Brisk Pace

By: Dan Weil

Central banks around the world added 425.4 metric tons of gold to their reserves last year, the biggest increase since 1964, according to the World Gold Council.

That represents a 1.4 percent gain to put their holdings at 30,116.9 tons in total. The increase was the first since 1988.

Central banks in India, Russia and China were among those boosting their gold reserves last year, as the precious metal jumped 24 percent, hitting a record of $1,226 an ounce in December.

Central banks now possess 18 percent of all gold ever mined.

“There’s clearly been a renaissance of gold in central bankers’ minds,” Nick Moore, an analyst at Royal Bank of Scotland, told Bloomberg.

“It’s not just been central banks taking on gold, but a general shift for physical gold in the investment sector.”

Many are now singing gold’s praises, with the precious metal up about 3 percent so far this year.

“Gold is quietly, at the edge, becoming the world’s second reservable currency, supplanting the euro and rivaling the dollar,” money manager Dennis Gartman wrote in his Gartman Letter, obtained by Bloomberg.

“The trend shall continue months, if not years, into the future.”

David Skarica, editor of The Gold Stock Adviser, tells Moneynews.com that central banks will continue to buy gold.

“The next lot sold by the IMF (International Monetary Fund) will go to China’s central bank,” he said. “The IMF has a supply overhang.”

© Moneynews. All rights reserved.





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Comments 1 - 6 of 6 Add Comment Page 1 of 1
Anonymous

Posted: Mar 28 2010, 12:17 PM

Link
98247 Contrast the article above with this --
http://newledger.com/2010/02/central-bank-reserves-supplydemand-mismatch/

and this --
http://www.ftadviser.com/InvestmentAdviser/Investments/AssetClass/AlternativeInvestments/NaturalResources/News/article/20100301/f7d726d4-21fb-11df-b7b6-00144f2af8e8/Manager-fears-bank-gold-could-be-phased-out.jsp

Falling in line and automatically reproducing "alternative news" stories is potentially financially dangerous to your readers.
Chris

Posted: Mar 28 2010, 12:32 PM

Link
So a basket of paper is of more value than physical gold? I bought gold at $388 so I am pretty happy with the "alternative news." I'm about to buy some more as well if I can just bite the bullet.
Anonymous

Posted: Mar 28 2010, 12:44 PM

Link
98247 Let's do some simple math...

Central banks worldwide now possess 18 percent of all gold ever mined. They also own about 65% of all US dollars.

Considering the ability of coordinated central bank action worldwide (coordinated through the BIS, or Bank of International Settlements), I highly suspect that the US dollar will be held in favor and with much more protection than gold or silver ever will.

Perhaps gold and silver may spike during a US fiscal crisis, but the spike will be quick and possibly too quick for anyone to really benefit from it. The US dollar would be quickly replaced with a new world reserve currency with no gold backing, and such an announcement would quickly cause gold and silver to plummet in price.

My guess is that central banks are not loading up on gold -- they are loading up on Special Drawing Rights (SDRs) in anticipation of a sudden, overnight USD collapse in which USD is converted to the new reserve currency, possibly the Bancor or something like it (which is also a "basket" of currencies). It will be a currency that has zero gold backing -- it will be backed by carbon credits, instead.
Anonymous

Posted: Mar 28 2010, 12:52 PM

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98247 Chris -- you are aware of Agenda 21 and Cap and Trade, right? It's all about creating a new carbon-based currency. Why? Because gold is not in enough supply to based a world reserve currency off of. Carbon credits are much more plentiful, and also require the creation of expanded government to oversee the entire process.

What would be great to see on your web site is how to diversity investments outside of gold and silver, in anticipation of a new world reserve currency that will NOT be backed by gold or silver.

For the period of 2006-2010, one SDR (Special Drawing Right) is the sum of 0.6320 US Dollars, 0.4100 euro, 18.4 Japanese yen and 0.0903 pound sterling.

It would be awesome if we could learn easy ways in which to invest in SDRs or something like it. Maybe even learn how to possess this same basket f currencies, since the SDR is owned and created by the IMF, and it's certain that the IMF isn't going to destroy it's strongest world reserve currency.
Chris

Posted: Mar 28 2010, 1:19 PM

Link
The dollar is being massively devalued by all the money being printed, the only reason is hasn't gone down against other currencies is because everyone is printing money and they're doing a somewhat orderly across the board devaluation.

SDR's are just more worthless paper with zero value, they don't need to load up on paper because it's of no value to them, they want gold, land, real estate etc.

A carbon based currency is worthless as well as carbon is a gas in the air and not a commodity, thank god for climategate because that whole hoax is collapsing.

I don't want some globalist SDR currency, I want physical assets like gold and silver which are actually worth something and cannot be printed out of thin air.

The thing is gold would be 2000-3000 already if they weren't manipulating the price to keep up the perception the dollar is actually worth anything, I'd rather spend $1180 (after markup) to buy gold which I personally believe is worth more like $2000 and take the chance it goes down in relation to fiat currencies and have the psychical property than just keep my money in dollars and hope the whole scheme keeps on going. An ounce of gold is an ounce of gold forever, historically it's always been a great store of wealth, the relative price is not that important to me.

I'm not someone obsessed with gold, if you don't want gold guns are a great investment, if you have the money and can find genuinely cheap real estate that's good too, the point is to convert your worthless dollars into physical assets which will be a better store of value. If the bankers weren't printing up a storm though then obviously I would just keep my money in the bank for convenience.
TimAng

Posted: Apr 01 2010, 9:55 AM

Link
i thought it was too hard to bite the bullet back at $700, $900, and $1000 so i never did it. now i think it's too hard to bite the bullet at $1100. to be fair i thought it was hard to bite the bullet back at $400 too. i think it's all about biting the bullet whenever i can muster the chutzpah cause in the end it's a good move.

still... $1100 is so much money. lol
Comments 1 - 6 of 6 Page 1 of 1


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