Central Bank: If The Entire System Collapses, Gold Will Be Needed To Start Over - page 4.

Mometaskers

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Quote from: 1Referee on October 19, 2019, 05:47:34 PM

Quote from: Mometaskers on October 19, 2019, 12:23:03 PM

I'm no economist but if the system does collapse, then it is very likely that countries would go back to the gold standard, which was the system before the Americans managed to muscle their way. And it'll likely stay that way until a different currency becomes the reserve.

It's quite difficult to have something so precious as Gold to become the standard of money again, and even if it turns out to happen one day, it's not going to last long before we're subjected to the same shananigans of endless money creation, debt, inflation, etc. As long as the same governments are responsible for creation and regulation of monetary policies, we're not going to move forward at all.

I like that with Bitcoin we don't have to wait for a new monetary system, it's here already and we're using it. Yes, it's priced against the us dollar, but so what? It works exceptionally well and it provides an indication of value, which is extremely hard to do when you start from scratch.

Another problem is that governments going back to the Gold standard will never be able to fully back every single unit because a lot of their Gold is stored in other countries. Not your keys not your Bitcoin is similar to not your physical Gold = you have no Gold. They're way better off hoarding Bitcoin because it's much easier to store. You can store trillions of dollars worth of Bitcoin in a $90 Ledger Nano hardware wallet. Tongue

I agree with everything you pointed out. Even if there was a movement among the governments to go back to gold standard to break the dollar's hegemony, it won't last long. Even if there's enough gold in each country's treasury to back the fiat, they'll want to keep on printing money. It's an addiction.

Of course this is not an issue with bitcoins (though some would argue that forks fulfill that want for money creation) though only time will tell if it'll be enough to compete with whatever new currency becomes the world standard.

boltz

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Besides Gold which is the top asset of the world and will never loose its value I think land will become again a great investments in order for the system to resume its power as with agriculture comes food , houses, drinks and all sort of things , depends what you do with the land. Anyway , until then , lets enjoy the digital age and Bitcoin.

fiulpro

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I think offered the conditions are the same and like right now I do think that instead of gold we could be really happy about owning bitcoins since ;
This way the small countries would indirectly get the support of the big ones and the economy would be global for once and the currency would be stronger since it's not depending upon one person or one country but on all ..
No matter what people might say it doesn't directly get affected with the price of other stocks and cryptocurrencies like the dollars or the gold, that could be a good thing for us in time time of recession.

Since no government would be able to control it , this way the corruption will decrease and the risk factor would go down.

error08

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Central banks are the source of financial crisis since the beginning with all their policies to wrap countries in debt. That's why in economics, hoarding gold and other hard assets far better than have trillion in bank accounts. In a collapse financial system, gold will be the new standard, hopefully fiat currency in the future made of gold like the system thousands of years ago.

Eclipse26

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You mean all paper money will collapse at the same time? Is that possible? A country who has a lot of debt is most likely to collapse, but if all country, to whom they have debts?
Well I do believe that the second option when fiat collapses is gold. Because it's the traditional one and already tested by the past. So possibly it'll just go back to the traditional way of trading.

deisik

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Quote from: Mometaskers on October 19, 2019, 12:23:03 PM

I'm no economist but if the system does collapse, then it is very likely that countries would go back to the gold standard, which was the system before the Americans managed to muscle their way. And it'll likely stay that way until a different currency becomes the reserve

Most countries went off gold standard during WWI (or soon thereafter)

While the Americans forced their way only in 1944 (with the establishment of the Bretton Woods monetary system). Although countries can return to gold for international settlements of payments, it is not very likely that we will be back to the proper gold standard when you could freely and fully exchange (redeem) whatever piece of paper is called money for real gold. It seems we are irrevocably past that point already

joniboini

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Quote from: mu_enrico on October 19, 2019, 02:30:46 PM

If BTC becomes more and more mainstream, we could expect more central banks to add BTC into their portfolios.

If this happens, then our fiat is Bitcoin backed. Meh, might as well go with Bitcoin instead.

Quote from: 1Referee on October 19, 2019, 05:47:34 PM

Another problem is that governments going back to the Gold standard will never be able to fully back every single unit because a lot of their Gold is stored in other countries.

I think they'll withdraw their gold before the collapse unless they're too stupid to do that. But, regardless of what happened, gold-backed currency in the hand of the governments is not good enough because they could lie and repat what happened a few decades ago.

1Referee

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Quote from: Mometaskers on October 19, 2019, 12:23:03 PM

I'm no economist but if the system does collapse, then it is very likely that countries would go back to the gold standard, which was the system before the Americans managed to muscle their way. And it'll likely stay that way until a different currency becomes the reserve.

It's quite difficult to have something so precious as Gold to become the standard of money again, and even if it turns out to happen one day, it's not going to last long before we're subjected to the same shananigans of endless money creation, debt, inflation, etc. As long as the same governments are responsible for creation and regulation of monetary policies, we're not going to move forward at all.

I like that with Bitcoin we don't have to wait for a new monetary system, it's here already and we're using it. Yes, it's priced against the us dollar, but so what? It works exceptionally well and it provides an indication of value, which is extremely hard to do when you start from scratch.

Another problem is that governments going back to the Gold standard will never be able to fully back every single unit because a lot of their Gold is stored in other countries. Not your keys not your Bitcoin is similar to not your physical Gold = you have no Gold. They're way better off hoarding Bitcoin because it's much easier to store. You can store trillions of dollars worth of Bitcoin in a $90 Ledger Nano hardware wallet. Tongue

mu_enrico

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OP, did you mean this article?
https://www.dnb.nl/en/payments/goud/index.jsp

I think it's only a "marketing effort" by DNB to show how strong their reserves. As stated in the same article:

Quote

De Nederlandsche Bank (DNB) holds more than 600 tonnes of gold. A bar of gold always retains its value, crisis or no crisis. This creates a sense of security. A central bank's gold stock is therefore regarded as a symbol of solidity.

and full context:

Quote

Gold: anchor of trust
Shares, bonds and other securities are not without risk, and prices can go down. But a bar of gold retains its value, even in times of crisis. That is why central banks, including DNB, have traditionally held considerable amounts of gold. Gold is the perfect piggy bank – it's the anchor of trust for the financial system. If the system collapses, the gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank's balance sheet and creates a sense of security.

Both sources: https://www.dnb.nl/en/payments/goud/index.jsp

AFAIK, central banks have portfolios of different assets as their risk management practice. However, maybe only Venezuela has BTC in its reserves (CMIIW). If BTC becomes more and more mainstream, we could expect more central banks to add BTC into their portfolios.

Febo

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Quote from: Hydrogen on October 16, 2019, 05:01:30 AM

Central Bank: If The Entire System Collapses, Gold Will Be Needed To Start Over

Entire system will never collapse. But USD as world reserve currency and other big currencies can lose its influence or even totally collapse. That will for sure reduce world trade. But there will always exist currencies. Question is how wanted they will be.

ivakar

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the problem is not a dollar or the gold, the main problem is capitalism itself, imo
it is golden era of consumers, more products, more food and more and more.
even if is not needed the system is build to produce more and more.
now system is broken not sure the gold will fix it

Mometaskers

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I'm no economist but if the system does collapse, then it is very likely that countries would go back to the gold standard, which was the system before the Americans managed to muscle their way. And it'll likely stay that way until a different currency becomes the reserve.

As for the value, we can't really say that it will "keep" it. It'll only have value if people believe it does, meaning that the economy will have to recover for those bars of yours to have any price. You can't eat gold.

AniviaBtc

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Quote from: Ucy on October 16, 2019, 09:51:07 AM

Quote

"A bar of gold retains its value, even in times of crisis. This makes it the opposite of "shares, bonds and other securities" all of which have inherent risk and prices can go down.

Can a bar of gold still retain its value in a prolonged global financial crisis or global disaster? I have my doubts.
Any wise person will stockpile other things like foods (with long-shelf life Ofcourse), small torch, batteries, herbs, etc. They will be in great demand if crisis is in global scale. Bitcoin/cryptocurrencies could be good way to store value if internet isn't affected.
Hopefully it won't be a global thing.

I agree, there's so much more important things than a bar of gold. We can live without it, because the commodities are much effective in survival during crisis. But the sad part is that, we can't store them without buying those things. We can't get them for free before the crisis starts. So technically speaking, a gold is also a factor in surviving when system collapses.

Pearls Before Swine

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Quote from: Hydrogen on October 16, 2019, 05:01:30 AM

Quote

"A bar of gold retains its value, even in times of crisis. This makes it the opposite of "shares, bonds and other securities" all of which have inherent risk and prices can go down.

There is so much wrong with this article that I could likely write pages worth of rebuttals, but it would be a waste of time, so I will just comment on the above quote.

A bar of gold does not *necessarily have to* retain any of its value, whether in time of crisis or not. All of gold's value is what human beings assign to it, and this is the same for stocks, bonds, real estate, and cryptocurrency. If you had bought gold or silver in any month of 2011 you would still be in the red right now. This is because of free market forces which drove its price up to its all time high and the same forces subsequently were responsible for its plummet back to earth.

Be careful when reading articles from zerohedge, because they will pump gold and silver regardless of the state of the economy or whether or not it makes sense to buy either one instead of something else like stocks or crypto. They will always tell you it's a great time to buy gold, the world is ending, everything is going to collapse, etc. Those things might well happen, but I can guarantee you the people at zerohedge don't know for sure that they will.

deisik

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Quote from: Hydrogen on October 16, 2019, 05:01:30 AM

What should we think of a world where central banks behave like doomsday preppers, accumulating and hoarding gold as if in anticipation of global economic crash?

I would say that this world came undone

Gold is mostly meaningless on its own (apart from its industrial use and value, of course). It is the economy, its strength and power, which matter in the long run, not some precious metal. The Soviets had enough gold (yet more crude oil), and it allowed them to last longer (for example, they started to buy wheat from Canada in the early 1970's in exchange for physical gold) but since their economic model was massively flawed (essentially suicidal), it was only a matter of time until they finally kicked the bucket

ChrisPop

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First of all GOLD does not retain its value in periods of crisis. I don't consider it to be a viable hedge against economic downturns. As an example in the 2008 recession, GOLD price plummeted by over 30%! After all it is just a metal with special properties and some use cases in industries. Why would it keep its value? - because it has been considered a store-of-value by population for thousands of year? - That could be a reason, but maybe there are better hedges out there like hmm.. food or even better.. BITCOIN. I believe that once GOLD won't be considered a store of value anymore its price will go down very fast.

airdnasxela

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If Central Bank collapses and fiat and paper cash loses it value, it is most likely that gold and other natural resources will be used. Since it is from the nature, it doesn't lose its value and are more stable. Just like what happened in Germany after world war one when they have hyperinflation and their currency loses its value, their way of paying other country for their debt is through gold and coal. People also start buying foreign currency since their currency loses its value.

NathanJB

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If the main foundation of the fiat system, which is the central bank, everything about the system will fall down to the ground. Everything related to paper bills and metal coins, their values, their denominations, and so on will be nothing. And there is going to be much confusion about which should take its place as a form of payment. Everything will go back to the good old days in which only valuable metals such as gold, silver, copper will be accepted. We will be going in that direction. After all, everyone agrees that such metals are valuable.

ecnalubma

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Quote from: Hydrogen on October 16, 2019, 05:01:30 AM

What should we think of a world where central banks behave like doomsday preppers, accumulating and hoarding gold as if in anticipation of global economic crash?

Gold is the common medium of payment for thousand years ago, I think the banks are aware of the incoming global economic crash that's why they are on the move of accumulating precious metals as much as they can. The game might be change if Bitcoin will outperform gold in the near future.

yoseph

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Quote from: Ucy on October 16, 2019, 09:51:07 AM

Quote

"A bar of gold retains its value, even in times of crisis. This makes it the opposite of "shares, bonds and other securities" all of which have inherent risk and prices can go down.

Can a bar of gold still retain its value in a prolonged global financial crisis or global disaster? I have my doubts.
Any wise person will stockpile other things like foods (with long-shelf life Ofcourse), small torch, batteries, herbs, etc. They will be in great demand if crisis is in global scale. Bitcoin/cryptocurrencies could be good way to store value if internet isn't affected.
Hopefully it won't be a global thing.

When it comes to financial uncertainty that's when gold becomes even more valuable but when it comes to things like a global epidemic like the one which happened in the movie "2012" or "The day after tomorrow " Gold becomes irrelevant in the long run and things like food and water becomes the most important commodity.

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