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This has nothing to do with USD dominance as many are suggesting. Ghana is running out of USD reserves and has to resort to buying with gold. Nothing suggests t

This has nothing to do with USD dominance as many are suggesting. Ghana is running out of USD reserves and has to resort to buying with gold. Nothing suggests they wouldn’t use USD if they had it.

luciusdomitius 4y ago
What prevents them exchanging gold for $ like all other gold producers are doing? This is probably what they themselves were doing beforehands?
- notahacker 4y ago
  This sibling comment has the answer to that: it helps disguise the margin the government makes on gold it compulsory purchases from local miners in local currency https://news.ycombinator.com/item?id=33742853 https://news.ycombinator.com/item?id=33742853 Also helps to look like you're doing something about a debt crisis even if the net effect is minimal or negative...
  - analog31 4y ago
    It shouldn't be hard for the miners to guess that margin, given that the market price of gold can be looked up. Gold is, for all intents and purposes, usable as money, at least between sophisticated parties such as governments. It lacks some of the features of USD, but if Ghana is out of USD, then those features don't matter to them.
    - notahacker 4y ago
      Oh, the mining company management will know what the spot price in dollars is and if the spot price offered in cedis doesn't seem fair. But "we've found a cunning new way to exploit our gold reserves" is a better PR line to the general public than "we're fudging the figures a bit in our favoir* Look at HN's somewhat sophisticated audience heralding it as a power move against the dollar rather than a country scrabbling around for ways to dig itself out of a financial hole caused in part because the dollar holds value much better than their own currency.
      - analog31 4y ago
        It strikes me as a tax on gold mining. I can't think of any principled reason why they shouldn't do that, to raise money for their government. Indeed, having a better engineered money system is one of the things that make rich countries richer.
notahacker 4y ago
It's also a country once known as the "Gold Coast" whose largest export is gold. I don't think they'd be proposing to acquire it otherwise...
danielschonfeld 4y ago
It has everything to do with USD dominance. Ghana is shouting out loud I can’t get my hands on USD. They’re echoing what the global market in general has been pricing. Now true, having your product be a hot commodity everybody wants is good for business but there’s only so much of that before your competitor starts offering a more readily available product. Pepper that with some morally objectionable stances the US has taken over the past 22 years and suddenly your ultra safe and liquid commodity while still good and desirable for this present crisis might not be as desirable for the post crisis era. Where one crack starts many others can possibly form.
- gtirloni 4y ago
  Are you advocating for printing more USD? edit: not sure why I'm being downvoted for asking a relevant question
  - whatever1 4y ago
    People outside the US love it, so no issue with devaluing the USD if we print an extra couple of trillions. The main issue is that the global supply chain cannot literally serve richer American consumers, so the cost of supply increases and everyone (in the US and out) faces inflation pressure.
    - miguelazo 4y ago
      People outside the US loved it. Recent moves by Japan, Switzerland and some others in the (quickly-losing-liquidity) Treasury Market suggest that era is coming to a close.
      - ghostwriter 4y ago
        > People outside the US loved it. Correction: foreign central banks guided by IMF subsidiaries loved it dearly, people - not that much, perhaps the opposite [1] [1] https://youtu.be/p5Ac7ap_MAY?t=1769 https://youtu.be/p5Ac7ap_MAY?t=1769
      - 4y ago
factorialboy 4y ago
It has everything to do with USD dominance. Countries have resources thus commodities. Commodities have value. Real value. Trade in local currencies can be backed by these commodities. Necessity will force countries to find USD alternatives.
- jkepler 4y ago
  Add to this that the US Federal government has conducted numerous hot wars to protect USD dominance. Remember when Saddam Hussain and then Kadafi in Libya each started selling dollars for euros? War. https://bitcoinmagazine.com/markets/petrodollar-deep-dive-with-alex-gladstein https://bitcoinmagazine.com/markets/petrodollar-deep-dive-wi... But now the US is even destroying confidence in the dollar, through its confiscation of the Afgan central bank reserves (which included private citizens' deposit accounts) and distributing the money to families of Sept 11th victims; or freezing the Russian central bank reserves, even though the international settlement system was meant to be apolitical.
  - giaour 4y ago
    > even though the international settlement system was meant to be apolitical “Apolitical” does not mean “usable by any party for any transaction.” SWIFT policy prohibits using its system in support of illegal activity [0], and the settlement system has been denied to sanctioned countries before [1]. [0]: https://www.swift.com/about-us/legal/compliance-0/fighting-illegal-financial-activities https://www.swift.com/about-us/legal/compliance-0/fighting-i... [1]: https://www.aljazeera.com/economy/2018/11/5/what-swift-is-and-why-it-matters-in-the-us-iran-spat https://www.aljazeera.com/economy/2018/11/5/what-swift-is-an...
    - immibis 4y ago
      Illegal according to whom?
      - selectodude 4y ago
        Illegal according to the United States, who regulates the SWIFT system and is the issuer and owner of all US Dollars. This isn't complicated.
Guthur 4y ago
Gold is real, it exists. The USD is a figment of imagination.

This has nothing to do with USD dominance as many are suggesting. Ghana is running out of USD reserves and has to resort to buying with gold. Nothing suggests they wouldn’t use USD if they had it.

luciusdomitius 4y ago

What prevents them exchanging gold for $ like all other gold producers are doing? This is probably what they themselves were doing beforehands?

notahacker 4y ago
This sibling comment has the answer to that: it helps disguise the margin the government makes on gold it compulsory purchases from local miners in local currency https://news.ycombinator.com/item?id=33742853 https://news.ycombinator.com/item?id=33742853 Also helps to look like you're doing something about a debt crisis even if the net effect is minimal or negative...
- analog31 4y ago
  It shouldn't be hard for the miners to guess that margin, given that the market price of gold can be looked up. Gold is, for all intents and purposes, usable as money, at least between sophisticated parties such as governments. It lacks some of the features of USD, but if Ghana is out of USD, then those features don't matter to them.
  - notahacker 4y ago
    Oh, the mining company management will know what the spot price in dollars is and if the spot price offered in cedis doesn't seem fair. But "we've found a cunning new way to exploit our gold reserves" is a better PR line to the general public than "we're fudging the figures a bit in our favoir* Look at HN's somewhat sophisticated audience heralding it as a power move against the dollar rather than a country scrabbling around for ways to dig itself out of a financial hole caused in part because the dollar holds value much better than their own currency.
    - analog31 4y ago
      It strikes me as a tax on gold mining. I can't think of any principled reason why they shouldn't do that, to raise money for their government. Indeed, having a better engineered money system is one of the things that make rich countries richer.

notahacker 4y ago

It's also a country once known as the "Gold Coast" whose largest export is gold. I don't think they'd be proposing to acquire it otherwise...

danielschonfeld 4y ago

It has everything to do with USD dominance. Ghana is shouting out loud I can’t get my hands on USD. They’re echoing what the global market in general has been pricing. Now true, having your product be a hot commodity everybody wants is good for business but there’s only so much of that before your competitor starts offering a more readily available product. Pepper that with some morally objectionable stances the US has taken over the past 22 years and suddenly your ultra safe and liquid commodity while still good and desirable for this present crisis might not be as desirable for the post crisis era. Where one crack starts many others can possibly form.

gtirloni 4y ago
Are you advocating for printing more USD? edit: not sure why I'm being downvoted for asking a relevant question
- whatever1 4y ago
  People outside the US love it, so no issue with devaluing the USD if we print an extra couple of trillions. The main issue is that the global supply chain cannot literally serve richer American consumers, so the cost of supply increases and everyone (in the US and out) faces inflation pressure.
  - miguelazo 4y ago
    People outside the US loved it. Recent moves by Japan, Switzerland and some others in the (quickly-losing-liquidity) Treasury Market suggest that era is coming to a close.
    - ghostwriter 4y ago
      > People outside the US loved it. Correction: foreign central banks guided by IMF subsidiaries loved it dearly, people - not that much, perhaps the opposite [1] [1] https://youtu.be/p5Ac7ap_MAY?t=1769 https://youtu.be/p5Ac7ap_MAY?t=1769
    - 4y ago

factorialboy 4y ago

It has everything to do with USD dominance. Countries have resources thus commodities. Commodities have value. Real value. Trade in local currencies can be backed by these commodities. Necessity will force countries to find USD alternatives.

jkepler 4y ago
Add to this that the US Federal government has conducted numerous hot wars to protect USD dominance. Remember when Saddam Hussain and then Kadafi in Libya each started selling dollars for euros? War. https://bitcoinmagazine.com/markets/petrodollar-deep-dive-with-alex-gladstein https://bitcoinmagazine.com/markets/petrodollar-deep-dive-wi... But now the US is even destroying confidence in the dollar, through its confiscation of the Afgan central bank reserves (which included private citizens' deposit accounts) and distributing the money to families of Sept 11th victims; or freezing the Russian central bank reserves, even though the international settlement system was meant to be apolitical.
- giaour 4y ago
  > even though the international settlement system was meant to be apolitical “Apolitical” does not mean “usable by any party for any transaction.” SWIFT policy prohibits using its system in support of illegal activity [0], and the settlement system has been denied to sanctioned countries before [1]. [0]: https://www.swift.com/about-us/legal/compliance-0/fighting-illegal-financial-activities https://www.swift.com/about-us/legal/compliance-0/fighting-i... [1]: https://www.aljazeera.com/economy/2018/11/5/what-swift-is-and-why-it-matters-in-the-us-iran-spat https://www.aljazeera.com/economy/2018/11/5/what-swift-is-an...
  - immibis 4y ago
    Illegal according to whom?
    - selectodude 4y ago
      Illegal according to the United States, who regulates the SWIFT system and is the issuer and owner of all US Dollars. This isn't complicated.

Guthur 4y ago

Gold is real, it exists. The USD is a figment of imagination.