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Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

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Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#231

Post by mcbits »

xyzzyz wrote: post #226
mcbits wrote: post #204

Earlier quoted context omitted.

No, in fact it is not. To help you understand why, if the US were to switch back to a gold-backed currency and somehow do it relatively seamlessly, it would need to find enough gold to back a money supply of about $7 trillion dollars (or $20+ trillion, depending...). All the gold in the world is currently "worth" less than $7 trillion dollars, and the US would be lucky to land 15% of that, or about 25,000 tonnes. In…

That's completely irrelevant. The issue at hand is whether the US is able to pony up 1200 tons of gold, not whether they can back their whole currency base with gold at current exchange rate.

It's relevant to the hypothetical state stealing enormous quantities of gold from other states. They wouldn't do it to give all the citizens fancy necklaces and dental implants. The reason would be to shore up their currency. The economics of gold changes under that hypothetical scenario, and it's the current market price of gold that is completely irrelevant.

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#232

Post by tmsldd »

mcv wrote: post #220
raverbashing wrote: post #217

Earlier quoted context omitted.

Can you really say with a straight face that if they can't produce what they say they are storing for a third party that their reputation is not going to go down the drain? If any bank prevents anyone from getting their deposited money, for reasons other than legal, there would be serious questions about their trust

Absolutely. If countries want their gold, and the US refuses to give it to them, what does that mean? Has the US stolen it? Has someone else stolen it? If this is true, it suggests that all those countries were wrong to trust the US, as the US is untrustworthy one way or another. Of course those countries having lost their gold is not good for them either, so it seems everybody has agreed to continue the lie. This st…

"Has the US stolen it? Has someone else stolen it?"... to complete your line of thought I would make one more question: Has it ever existed? The whole thing about gold lies in the impossibility of speculation. Of course, it doesn't hold if one single institution controls of all of it...

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#233

Post by mercurialshark »

Everyone, stop. This guy is literally batshit insane.

Germany isn't being stiffed, strong-armed or muzzled. They are distributing assets amongst the world's soundest systems at will - at home in Germany, the UK, US and France. This guy isn't just speculating, he's making stuff up with absolutely no basis for it.

http://www.bundesbank.de/Redaktion/EN/Pressemitteilungen/BBK...

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#234

Post by mcv »

sgt101 wrote: post #203
ars wrote: post #192

Earlier quoted context omitted.

> because central banks managed to convince us that we don't need it to back up our currency. No, it's because we switched to much more productive things to back up our currency. Our currency is backed by the willingness of our citizens to work and the value of the land and other possessions. The currency is stabilized by not printing more than what there is to back it up, nor less. Gold is a terrible thing to use be…

I think that fiat money is backed by the state's ultimate monopoly on violence.

It's based on being able to pay your taxes with it.

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#235

Post by mcv »

ars wrote: post #192
mamon wrote: post #131

Earlier quoted context omitted.

Gold is valued at only $41k per kilo because central banks managed to convince us that we don't need it to back up our currency. If China really created gold-backed currency then gold price would skyrocket, increasing at lest 6 times (that's how much inflation we had since 1971, when the gold standard was abandoned)

> because central banks managed to convince us that we don't need it to back up our currency. No, it's because we switched to much more productive things to back up our currency. Our currency is backed by the willingness of our citizens to work and the value of the land and other possessions. The currency is stabilized by not printing more than what there is to back it up, nor less. Gold is a terrible thing to use be…

Gold is a pretty silly thing to base your currency on. It's shiny metal; it's not something productive like land, labour or production.

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#236

Post by vsl »

erikb wrote: post #148
21 wrote: post #44

Earlier quoted context omitted.

So you are saying that Germany would begin military action against Switzerland for $50 billion worth of gold (rough value of 1000 tons of gold). How much damage to the Euro and to the European stock markets would such action cause? Not to mention other costs

Not 100% what I'm saying. I'm saying that if Switzerland holds a lot of Germanys gold and has promised to give access whenever and don't hold up to that promise, Germany just moving some tanks over, then taking the gold, then moving the tanks back, is quite a possible scenario. Yes that would harm the EU in short term (1-5 years). But so would it get hurt if a powerful member of that alliance is not able to enforce r…

The point is, not really possible, given Swiss defense system. Have you been to Switzerland? That country is a fortress.

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#237

Post by tmaly »

tmaly wrote: post #67

It could have been just swapped out for gold coated lead bars. Hard to tell without any transparency.

The down vote is exactly why polls will continue to get it wrong. Every time I make a comment on economics or tax policy on HN, I get down voted. I will stick to tech, and everyone can keep getting surprised every election.

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#238

Post by NotSammyHagar »

xyzzyz wrote: post #230
NotSammyHagar wrote: post #183

Earlier quoted context omitted.

Eventually there will be asteroid mining, and like we already have a sense of 1 trillion dollars worth of palladium in an asteroid, there will be 1 trillion dollars worth of new gold - which did cost a lot to get. Google claims the entire mined gold in the world's history is 8 trillion, but tons (ha) have been lost over time. Anyway, you get 12.5% more in that first shipment. Maybe it will be a 100 years from now. An…

If we find vast amounts of gold in asteroid, the price of gold will fall to just above the marginal cost of recovering that gold as long as it's lower than its current price -- this is some very basic economics. A good example to consider is aluminium. In early 1880s, the price of aluminium was around $10000 of today's dollars for kilogram -- actually the price of ounce made more sense, as you very rarely saw pieces…

I agree with you. My point was that gold and all other elements and minerals on earth should likely go down in price tremendously in the next few 100 years, as we mine asteroids.
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