11–20 of 238 posts
I do not even understand why one country would need to negotiate about their properties held abroad.
There are two reasons I can come up with right now:
- Country A holding assets of Country B wants leverage over Country B or
- Country A does not hold 100% of these assets any longer
Why do countries bother to hold gold? Wouldn't it be sensible to sell as much of it off as possible? (I'm asking like "ELI5" because I'm sure there is a reason)
I agree that mining, storing and transporting gold around the planet is a waste of resources, but there are only so many places to store wealth in a physical manner. The fact that gold has historically been useless in industry probably adds to its value.
Why do countries bother to hold gold? Wouldn't it be sensible to sell as much of it off as possible? (I'm asking like "ELI5" because I'm sure there is a reason)
Diversification of "hard assets" because the value of sovereign currency is illusory and often fleeting. I agree that mining, storing and transporting gold around the planet is a waste of resources, but there are only so many places to store wealth in a physical manner. The fact that gold has historically been useless in industry probably adds to its value.
Earlier quoted context omitted.
Diversification of "hard assets" because the value of sovereign currency is illusory and often fleeting. I agree that mining, storing and transporting gold around the planet is a waste of resources, but there are only so many places to store wealth in a physical manner. The fact that gold has historically been useless in industry probably adds to its value.
Given that you want an asset which is difficult to move, wouldn't it be better to build infrastructure instead (eg. roads). At least you can use that asset. I don't understand why gold would be preferable.
Why do countries bother to hold gold? Wouldn't it be sensible to sell as much of it off as possible? (I'm asking like "ELI5" because I'm sure there is a reason)
Not sure why the article doesn't mention that fact, maybe it doesn't feed into the FUD/conspiracy theory?
The gold is stolen.
yes. I spent too much time on goldbug blogs too. then I was reminded that cultures have used all kinds of objects as currency, and as stores of value. gold just happens to be the most historically relevant and widely understood, culturally.
Why do countries bother to hold gold? Wouldn't it be sensible to sell as much of it off as possible? (I'm asking like "ELI5" because I'm sure there is a reason)
They do. Switzerland sold more than half of their gold in the past 20 years, including all their holdings at the Federal Reserve in New York (that's like 1300 tons of gold that was sold, in comparison the hundreds of tons that are mentioned on the article for germany and netherlands). Not sure why the article doesn't mention that fact, maybe it doesn't feed into the FUD/conspiracy theory?
until the world stops needing oil to function, no one is going to care much.
I think the background to this is that, during the Cold War, Germans were worried about a possible Soviet invasion, so storing gold in the US at the time made sense. As the article states, conditions have changed somewhat and there has been political pressure to return some of the gold in recent years.
(and moving the gold physically is a pain, easier to have them all in the same location, that's what the FRBNY account is for)
The gold is stolen.
1 - Why do Germany and Netherlands even store their gold in the USA?
2 - Why shall the USA/FED have any saying about Germany wanting their property back anyway? It's like me having to negotiate with my bank weather I can or not withdrawal my money from there.