Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Gold overtakes U.S. Treasuries as the largest foreign reserve asset

economictimes.indiatimes.com

Post reply on HN
Print view View original

101–110 of 270 posts

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#101

Post by logicchains »

andsoitis wrote: post #40
bijowo1676 wrote: post #29

Earlier quoted context omitted.

Gold has always been stable, because it is physically limited. It is the fiat currency debasement via unlimited money printing that makes the gold chart go up. Imagine being in Zimbabwe or Weimar Germany and watching your stock portfolio and gold going up...

> Gold has always been stable, because it is physically limited. Incorrect. Physical scarcity matters, but it’s not the main driver. Gold’s price is far more sensitive to interest rates, dollar strength, sentiment and fear, speculative flows. The stability it’s historically shown was mostly the result of fixed monetary systems, and those are long gone.

>Incorrect. Physical scarcity matters, but it’s not the main driver. Gold’s price is far more sensitive to interest rates, dollar strength, sentiment and fear, speculative flows.

Those are only relevant on a shorter timescale; on a long timescale gold's held its value extremely well. The price of a loaf of bread in gold now is still similar to what it was in the Roman Empire 2000 years ago.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#103

Post by ghywertelling »

cmcaleer wrote: post #73
BobbyJo wrote: post #55

Earlier quoted context omitted.

Being a reserve currency puts a gun to your economy's head. It creates an asymmetry where domestic production of material goods has to jump a gap created by favorable exchange rates in PPP terms. Its great for the day to day life style of your citizens, as other economy's do indeed pay tribute, in a sense, to their consumption of goods produced overseas. However, being paid to do nothing becomes a real problem when t…

It's as much a gun to adversaries' heads if they hold lots of your bonds (China used to hold over $1T in USTs) so they would have an interest in not having that blow up by not annoying the US so much they refuse to pay foreign bonds. It's also kind of neat as a financial MAD instrument, because China obviously can't just get everyone to go into their brokerage and market sell a trillion in USTs so they get a lever to…

After the US Dollar with Luke Gromen

https://youtu.be/OOW-oSruO80?t=4072

Luke's key point lands at about 1:08:27–1:08:33, where he says that instead of selling treasuries outright (which would draw attention from the American embassy), China can use them as collateral — and the American banks are happy to take it. He then lists what China gets in return: "I'll take Pereus. I'll take that oil field. I'll take that copper mine. I'll take all that gold." He then adds that this works because the incentives align on both sides — the Chinese want to understate their strength, the Americans want to overstate theirs, and the American banks are happy to accept dollar collateral without asking too many questions.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#104

Post by throwaway315314 »

neonstatic wrote: post #100
aloha2436 wrote: post #26

America was in practice running an empire that collected tribute from the rest of planet earth in exchange for entries in a database denominated in a currency they controlled and that was accepted everywhere. Really the only way it could go wrong is putting it under the control of someone who doesn't understand the kayfabe...

I think pinning this on one guy is a gross oversimplification driven by personal dislike for that guy. In my opinion larger forces are at play. I don't mean it in a conspiratorial way; simply put, the structure of global trade, economy, military power, etc. have shifted to such a degree, that this process has become inevitable.

Because such a system isn't just sunshine and rainbows like OP mentions and has real costs like ever increasing debt burdens and wealth and social inequality which naturally create political instability as lower classes and institutions become increasingly stressed. Trump is just a symptom of sentiment created by these consequences.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#105

Post by themafia »

NewJazz wrote: post #97
themafia wrote: post #88

Earlier quoted context omitted.

> States can't issue their own currency Of course they can. You're pointing out that federal law currently prohibits it? I already understood that to be the case when I made my point. > they're all going wherever the nation goes on this one. Unless they all collectively decide on a different course of action. The constitution was left amendable. It has been done several times already. A simple option is to repeal the…

How would that benefit anyone?... The core feature of the senate that makes it so indefensible is how it assigns power to states, not people. That relationship cannot be amended, per article 5 of the us constitution.

It's far easier to change a state government than it is the federal government. The states used to be able to recall Senators if they failed to do their jobs correctly; as determined by the elected body within the state. It's simply a single level indirection of Democracy. The House of Representatives is direct. This was intentional.

What's "indefensible" about this?

And you can amend how the body is elected; hell, you can amend how the president is elected. Also Article V provides for a state "constitutional convention" as a process for initiating changes, bypassing both the Senate and the House.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#106

Post by RobotToaster »

IAmGraydon wrote: post #63
rapind wrote: post #42

Earlier quoted context omitted.

> someone too stupid to understand That's only true if he's actually "your guy". There's an alternative where it's not stupidity that I think more people should be mulling over.

The fact that he has done countless things that are harmful to the US and not a single thing that is in the country's best interests tells me all I need to know. Either he's aligned with an enemy or he just hates the country and wants to destroy it.

Or he and his associates can make a lot of money out of crashing the economy and buying up assets for pennies.

Never attribute to malice that which is adequately explained by greed.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#107

Post by vintermann »

ZeroGravitas wrote: post #76
rapind wrote: post #42

Earlier quoted context omitted.

> someone too stupid to understand That's only true if he's actually "your guy". There's an alternative where it's not stupidity that I think more people should be mulling over.

One less conspiratorial but more pernicious angle, is that attacking things that are good but complex is a great strategy for troll politicians who don't care about the success of their country but just like the attention. See Brexit, and free trade in general. It's a good way to get "the establishment" to gang up on you and defend something complicated while you present simple but wrong alternatives and promise the…

For Brexit in particular, it seems clear to me that EU politicians, but the UK ones in particular, used EU as a scapegoat for unpopular economic policy that they themselves actually want, but can't justify effectively to their constituents. "We can't help it, it's an EU requirement" when leaving out that in the EU, their guys totally supported it.

That was bound to backfire at some point or another.

I think you're right that politicians prefer not to defend complicated (and possibly good) policy to the public. But if they choose easy ways out to avoid it (and they do!) then they're to blame too when it collapses. To blame the public for not blindly trusting them won't do.

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#108

Post by yosefk »

rapind wrote: post #42
aloha2436 wrote: post #26

America was in practice running an empire that collected tribute from the rest of planet earth in exchange for entries in a database denominated in a currency they controlled and that was accepted everywhere. Really the only way it could go wrong is putting it under the control of someone who doesn't understand the kayfabe...

> someone too stupid to understand That's only true if he's actually "your guy". There's an alternative where it's not stupidity that I think more people should be mulling over.

While we're at it, when did central banks start to buy lots of gold and under which POTUS? Could it have something to do with the freezing of hundreds of billions of some sovereign assets?

Re: Gold overtakes U.S. Treasuries as the largest foreign reserve asset

#109

Post by californical »

ghywertelling wrote: post #103
cmcaleer wrote: post #73

Earlier quoted context omitted.

It's as much a gun to adversaries' heads if they hold lots of your bonds (China used to hold over $1T in USTs) so they would have an interest in not having that blow up by not annoying the US so much they refuse to pay foreign bonds. It's also kind of neat as a financial MAD instrument, because China obviously can't just get everyone to go into their brokerage and market sell a trillion in USTs so they get a lever to…

After the US Dollar with Luke Gromen https://youtu.be/OOW-oSruO80?t=4072 Luke's key point lands at about 1:08:27–1:08:33, where he says that instead of selling treasuries outright (which would draw attention from the American embassy), China can use them as collateral — and the American banks are happy to take it. He then lists what China gets in return: "I'll take Pereus. I'll take that oil field. I'll take that cop…

Damn that’s actually a crazy thing to think about but makes perfect sense. Thanks for sharing
Post reply on HN