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I've always wondered: what would happen when most nations central bank's gold holding drop below say 20%? or 10%? Is there a cliff where gold as a store of val
by tonfa 9y ago
I've always wondered: what would happen when most nations central bank's gold holding drop below say 20%? or 10%?
Is there a cliff where gold as a store of value just starts crashing? Or would the fantasy continue for the non-institutional holders for a while?
- pas 9y ago20% of what? Most central banks have foreign reserves ( https://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves https://en.wikipedia.org/wiki/List_of_countries_by_foreign-e... ) and and central banks' gold reserves are typically less than 1% of their reserves. So gold backing any currency is just a small part of all gold in existence (about 170 000 000 kg ~ 7T USD) For "all currency", the money supply is a lot (converted to USD): US M0 is 10T, UK 2.85T USD, Eurozone ~8T, Australia ~1.8T. And China, Japan, India and so on also has big monetary bases.