Most gold in the world

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July 12th, 2017 at 7:01:14 AM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 48
Posts: 4573
Quote: Pacomartin
Basically, do you believe that how much gold a country has is completely irrelevant? I'm kind of leaning that way myself as I think the USA should sell it's gold.
But other times, I feel that there is a lot of emotional baggage associated with gold. I know there are many people that are upset the the UK, Norway and Canada sold their gold reserves.

Its a question of value: Do we need to coin a term such as 'meta-intrinsic' or Intrinsic-Premium?

Consider value: If a man was right on the last three spins of the roulette wheel, does he posess intrinsic value? If instead he happened to be right on his last three movie deals, he needs no reservations and can order what he wants without regard to the menu and money men will flock to invest in his next movie. So its not just empty social gestures, he is endowed with value. The source of that value is the same as the source of the value of a 'hot streak' at a roulette wheel. Other people believe he is hot, so he is given value by them. Are gold reserves accorded the same heat? Will the heat of gold evaporate when the next spin of the wheel falls onto the wrong color and some Central Bank says 'get lost'?

Consider the man who is wearing what looks like a rumpled suit that he has slept in for a week. If he is walking in an alley, he is viewed as a bum but if he is walking along Rodeo Drive well that suit probably cost him $2200.00. Its still a rumpled suit. What is its value? Is that vaue intrinsic or ephemeral?

Cuffs, slit sleaves, neckties and buttons are archaic items dating back to swordplay and riding horses. Want to go to a business meeting without that emotional baggage that we invest in them? What is the value of a woman's neckline? What happens to that value if she gets the first tan of the season with a high neckline and can 'show a little white' the rest of the season? As that 'little white' tans all season long, does her neckline value change? Does the value of gold shift as well?

When it is necessary to 'dash' the bank teller to withdraw your own money and to 'dash' the mailman to take your letters, what does this knowledge do to considerations of 'Gold Reserves'. What honesty is there in those numbers? What 'dash' would have to be paid to access those reserves? Is Nigerian Gold more or less valuable than a Nigerian Email?

When the public perception, though not necessarily actual situation, is that Lebanon is a combat zone, what is the adjustment we mentally make to 'value' of gold?

People used to value "The Market" by looking at the price of "Big Steel" but Big Steel has been bankrupt for eons and is now called Puny Steel. Some continued to value Big Steel during the 1929 crash, others knew its value was purely emotional and shorted it all the way down. What about Big Gold? Gold shares did indeed rise that day, but by 1932 even gold shares were walpaper items.

Switzerland used not to have so many drug addicts but their currency doesn't seem to reflect actual society but more archaic notions of Swiss society and Swiss banking.
July 12th, 2017 at 7:16:45 AM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 705
Posts: 8134
Quote: Fleastiff
Switzerland used not to have so many drug addicts but their currency doesn't seem to reflect actual society but more archaic notions of Swiss society and Swiss banking.


The Swiss franc (CHF) has long been considered a hard currency, despite Switzerland being such a small population compared to the big three, Euro-zone, Japanese Yen, and USD.

The little three hard currencies are traditionally the British Pound, the Canadian dollar and Swiss Franc. But I think part of the reason Swiss Franc remained a popular addition to foreign reserve is that it was the last paper currency in the world to terminate its convertibility to gold.

In 1999 the 500 franc note was replaced with a 200 franc note Now with the massive jump from 200 francs to 1000 franc there is a clear distinction between banknotes for transactions and banknotes for "store of value". About half of the value of circulating banknotes is in the 1000 franc denomination.
July 12th, 2017 at 8:09:39 AM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 48
Posts: 4573
Exactly.
Fundamental changes to Swiss society and the Swiss money and banking system did not affect the reputation of the Swiss Bankers or the value of gold reserves.
Yet one would hardly suspect that fundamental changes in Lebanon or Nigeria would fail to alter the banking system and the value of gold reserves.

A good measure of the value of gold reserves is the value that is attributed to a particular country's economy and stability. Swiss bankers are still good bankers even if their laws are a little more porous now than they used to be. Swiss gold reserves are respected even if their currency is not 'gold notes'.
July 12th, 2017 at 8:42:05 AM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 705
Posts: 8134
How Sweden's negative interest rates experiment has turned economics on its head

Sweden is best known for their decision to take the repo-rate to negative percentage since 18 February 2015.

The repo rate is the rate of interest at which banks can borrow or deposit funds at the central bank for a period of seven days
The deposit rate is the rate of interest banks receive when they deposit funds in their accounts at the central bank overnight and is normally 0.75 percentage points lower than the repo rate.
The lending rate is the rate of interest banks pay when they borrow overnight funds from the central bank and is normally 0.75 percentage points higher than the repo rate.

Discussions of negative interest rates are alarming to many people.

Personally, I think that Sweden could get publicity out of the fact that their gold reserves are now worth more than their banknotes. AFAIK only Lebanon has been able to make that claim to date.

Serious economists may take that fact with a grain of salt, but I think it would be worth something to investors, particularly from the gold obsessed portions of the world.
July 12th, 2017 at 1:02:28 PM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 48
Posts: 4573
Quote: Pacomartin
particularly from the gold obsessed portions of the world.
Political and economic instability? Inflation rampant? Countries with major gold mines?
July 12th, 2017 at 3:58:12 PM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 705
Posts: 8134
Quote: Fleastiff
Political and economic instability? Inflation rampant? Countries with major gold mines?


Countries like the Arab countries, China and India that have a strong cultural affiliation with gold.


Stockholm has a beautiful city center, but prices are no where near as astronomical as London or Monte Carlo. This apartment at US$12.8 million was the highest price ever for a home in Stockholm. People who if you say "Sweden is the only country in Europe that backs their currency with gold" will find that significant.

Stockholm's highest building is under 400', and with the canals it is like a beautiful northern Venice.

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