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

economictimes.indiatimes.com

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

#121

Post by znnajdla »

For the first time in history we are seeing multiple signals of USD losing its #1 position to EUR, all within the last year :

1. Euro-denominated interest rate derivatives (IRD) overtook US dollar-denominated contracts in the over-the-counter (OTC) market for the first time in history and the scale of the crossover is staggering.

2. EUR Real Effective Exchange Rate (REER) which measures actual purchasing power (not nominal price) is going in the opposite direction of USD real purchasing power (RTWEXBGS). 2025/2026 is the largest divergence in history: 10 percentage points in a year.

3. US treasuries is no longer a number 1 foreign reserve asset. EUR reserves grew 2.5x faster than USD reserves when measured in its own absolute terms.

Unlike the Eurozone which maintains a fiscally responsible budget with reasonable debt and a trade surplus, there is simply no foreseeable fix to the problem of ballooning US debt and trade deficits. Nothing can fix the US budget mess.

Anyone who is paying attention to the numbers would certainly have more confidence in EUR over USD.

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

#122

Post by hdgvhicv »

logicchains wrote: post #101
andsoitis wrote: post #40

Earlier quoted context omitted.

> 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.

So you’d be far worse off if you had put your savings in gold than in fiat currency based investments

Barely keeping up with inflation is not the win you think it is.

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

#123

Post by rapind »

RobotToaster wrote: post #106
IAmGraydon wrote: post #63

Earlier quoted context omitted.

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.

Yeah I think the most obvious explanation is looting and ego (to explain the ballroom and putting his name everywhere). I also think there's an awful lot of foreign influence around him and his family and friends before and during his term(s). I mean if I'm a foreign actor seeing your leader's keen interest in looting, I'll probably make him an offer or two...

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

#124

Post by gus_massa »

fakedang wrote: post #80
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…

> by not annoying the US so much they refuse to pay foreign bonds. The problem with this is that a country can only refuse to pay their foreign bonds once. But the buyer can always dump them and scoop them up later for cheap when shit hits the fan.

Hi from Argentina!

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

#125

Post by ferfumarma »

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.

The Clinton administration ran a budget surplus

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

#126

Post by jasomill »

themafia wrote: post #105
NewJazz wrote: post #97

Earlier quoted context omitted.

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, y…

For that matter, you could amend the Constitution to change the process for amending the Constitution, even to eliminate the possibility of future amendments altogether.

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

#127

Post by pjc50 »

rwmj wrote: post #113
vintermann wrote: post #107

Earlier quoted context omitted.

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 ri…

The alternative is everything falling apart at home and our manufacturing industries declining dramatically. Maybe the "unpopular economic policy" wasn't such a bad idea after all.

Well, that's the brexit outcome.

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

#128

Post by sph »

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 every complex problem there is an answer that is clear, simple, and wrong."

The issue is that the stupider the politician, the more likely they are unable to understand why their clear, simple answer to the ills of the world is also wrong.

Brexit, whatever is happening in the US, is caused by narcissism (a common trait among politicians) paired with a great deal of stupidity and ineptitude, not only among politicians, but among the populace as well.

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

#129

Post by rapind »

hax0ron3 wrote: post #70
IAmGraydon wrote: post #63

Earlier quoted context omitted.

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.

I disagree with probably the majority of Trump's main policy ideas, but I think a strong case can be made that his immigration policies are in the country's best interests. Not all of them, but as a whole.

What blows my mind is how liberals and progressives (of which I count myself a member) don't see to care that this is the policy that pushed Trump into office. Without it he would have flopped with just his MAGA core.

All you need to do to fix illegal immigration is to go after the employers. You know, actually enforce the laws. Streamline it. Declare it a national emergency and put more onerous requirements on businesses to verify legal status. Send ICE to businesses to investigate them instead of kidnapping people.

You'll probably find out pretty quickly that agriculture is extremely dependent on illegal labour, but so be it. Bring it into the light and have an actual debate. The current approach is all for show, or at worst, intimidation.

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

#130

Post by gpt5 »

yosefk wrote: post #108
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.

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?

There is something awfully bad happening to the internet, including Hacker News.

It seems like rage-baiting, polarizing titles and vibe based comments are being upvoted, with no interest in the facts. For example, in this case:

1. The growth of the gold reserve in comparison to US Treasuries have very little to do with growth in gold acquisition, and has everything to do with gold more than doubling in price in a year.

2. To make it even worse, gold has since fluctuated in value, and treasuries overtook gold momentarily just a week ago. These price fluctuations has nothing to do with geopolitics.

3. Central bank buying of gold has been trending down in the last year, down 21% from 2024. So far in 2026 it's been going even lower.

4. Gold owned by central banks was higher than US treasuries in the 90s (this is mentioned in the article at least).

This is a little meta - but the thing that bothers me is that this low quality discussion like in this thread is spreading everywhere with the same mechanism - bring politics and polarization into every place, no matter how tangentially related it is.

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