Topic: Central Bank: If The Entire System Collapses, Gold Will Be Needed To Start Over (Read 874 times)

The fiat system of states is unlikely to collapse overnight. In the world, the economy is always weaker in some states, stronger in others. At the same time, periodic financial crises not only have a bad effect on the development of the economy, but also bring certain benefits to it. At all times, they complained about the imperfection of the financial system of states, but it continues to exist and so far there is no worthy and effective alternative to it.
Gold, like every financial asset, has its advantages and disadvantages. There is nothing ideal in our rough physical world. Therefore, we use different assets as money in relation to the current situation, and this is probably correct.

Yes. this is very interesting to follow..I also ask myself is it possible that we all will be able to pay at the end of the story using only 2 (two) types of payment modes, namely BTC and Gold..??

Another relevant thread which could use a bump.

It’s too difficult for layman to even tell the real gold, remember countless of people getting into buying fake gold scams Ponzi scheme that later on the investors who bought the custodial paper gold contracts, now worth nothing after the scam company getting exposed and all the fund collected get into nobody know whose fault and care anymore. I doubt people are getting smarter today or even have the prowess to actually doing all the tedious procedure of detecting counterfeit gold. I would tell you when central bank get into gold, the entire gold market would face the same fate of fiat, getting extreme inflation, irresponsible quantitative easing, all for the benefit of their self gain, and milking every last person who have faith on gold and sell their bunch of questionable gold products, many possibilities, you can’t trust bank to handle the gold again just like we trust them with fiat money but we get in return are a wobbling problem that would destroy entire generation.

In our world, not only gold has eternal constant value. Real estate, gas and oil reserves, precious stones and metals, antique products and much more are of almost constant value. Of course, gold has always been the basis of value.
However, I see no reason why our common value system should collapse. Economic crises have been, are and will always be periodically. They have both a negative impact on the global economy and a positive one. However, for the whole system of our values ​​to collapse, in my opinion, there is no such great danger.

Gold always had a value for human kind and that probably will never change. However, in the digital era it's oldfashioned and as far as I.know countries don't back up their national currencies in gold anymore. That is why remains unclear how could gold help to start over. Maybe for individuals but not for economy and financial systems in general.

This is nothing more than just a wrong view or point of view

The truth is, gold is rock-solid on its own. I'm damn sure you are looking at the dynamic of gold prices in dollars. But it is not gold that changes its value against the dollar as it is the value of the dollar (as well as that of other fiat currencies), present and expected, that fluctuates wildly (at times) against gold. It is a pretty common mistake. Just keep in mind that every equation has two sides to it, and if you change one side, the other should be adjusted accordingly

Gold is the best option only if you want to store your excess monthly earning and nothing more. The downside of gold is the fluctuation that is just as volatile as cryptos but in a smaller scale because the higher market cap. If I have some wealth that I need to keep and to avoid the currency or fiat fluctuation which gets worse and worse by the time passes, gold is very good. Otherwise, just invest to something that can give you passive income. However, I heard that silver is getting the bullish market as of now, and I always consider gold and silver as equal in term of investment.

I constantly read reviews of cryptocurrency users about their opinions regarding investments in gold and each statement is different from each other.  But as for me personally, I would not use gold for trade, but gold is suitable as savings, just in case.  Perhaps in the future we will face situations where no currency can resist the real precious metal.

After investors loss a fortune on betting the share market, in return they get warning letters for messing up their share market. How does it feel? It felt like marriage to a nasty wife, who later on decide to go off grid and dump you when you’re broke and also take the child along with her and ask for alimony or she will put you to jail for cheating on her.

Guy if you can’t see the entire narrative clearly, you’re properly the only person who still have faith on a feet biting dog who you spend entire life feeding them to be fatty bomb bomb.

im sure if someday gold will show their existence, but how they manage it. if they manage or make it same like fiat currency, its a problem. in history, they can live without any economic problem because they have same value, in a long time. so, this also about how to manage what we have.

No country uses gold as a backup for its currency nowadays

Muammar Gaddafi tried to launch a gold-backed dinar as a pan-African currency but was quickly overthrown and then assassinated. Gaddafi and his ideas aside, gold as a currency is only a medium of exchange just like any other currency out there, and in this regard its function is purely utilitarian, i.e. without goods and services to be produced and exchanged it means nothing on its own, not worth a dime, so to speak, gold or otherwise

For ages, gold has been the de facto standard in most trades and medium of exchange aside from barter, I think still gold is a valued asset until now. Gold is supported by all nations, and its good to the assets or currency for a country to be back by gold. But now, I think cryptocurrency is another option, for big secured and highly portable and flexible.

That is ow it is in confederation. Texas also cant do their own implementation on USD. They need other states to agree with their proposal first. Where would we be if all European countries would be against Netherlands suggestion but that suggestion would be accepted? Definitely not in Confederation.

If the current monetary system collapses is not only an alternative solution that must be sought but also the root of the problem that occurs so that the same problem does not recur in the future. I am among those who believe that the fiat money system will collapse according to what has been preached by the Prophet Muhammad. While forgetting about the forecast problem, let's discuss why gold is able to move the economy back after a collapse.

In international trade, not all types of fiat money have legitimacy and are widely used. while gold is international, there will be freedom of gold exchange, through exports and imports. the use of gold will cause a fixed exchange rate between countries. Each country will maintain its gold wealth so there is no gold flight to other countries.

The golden opportunity to return to being an international monetary reference is huge from a fundamental (economic) perspective but rather difficult from a political point of view. That can be seen from the strong international conspiracy to get rid of the influence of gold. The banalization (removal) of gold from the venerable arena is inseparable from the solidity of America as a world superpower. Every superpower country has the opportunity to become the world's currency.

indeed adoption of gold as a medium of exchange will not be able to solve all economic problems after the collapse. but it can at least be the first step to not further impoverish the people with the problem of losing their money due to inflation and currency depreciation.

At times of extreme stagflation and hunger gold could surely net you a lot of currency. But people then were not interested in monetary value as much as for mere survival. Value isn't a universal notion. Gold might have a more tangible sense to how its valued but context also matters, because in an economy you're not alone. If you're shopping for survival maybe money in general is not a good currency.

I have been investing in gold before I discovered Bitcoin, but now I don't invest much in it. My focus is more on Bitcoin than gold because that's where I make the most profit. Whatever happens to Fiat does not have anything to do with cryptocurrency unless it's one that is backed by fiat like most stable coins.

I also have two lands, and I have no intention of selling any of them, but to keep them. It's good to have assets like these. I can tell for sure that the price of land in my country has increased more than what it used to sell in the last decade. If I should sell land I know how much I will be getting. That's the same with gold and Bitcoin, they all increase. If you don't have any you are just missing out and when there is an economic crash it will affect you badly.

There is Sovereign gold bonds even now and you do not necessarily carry gold bars, just a peace of paper is enough to carry millions of dollars worth of gold through international borders and now we have BTCitcoin and you can move that easily and can sell those in exchanges and convert to the fiat currency you want and hence i consider BTCitcoin now a days and when ever i invest in gold i tend to go for gold bonds than purchasing the metal itself.

There were different forms of gold standard in the past

And you didn't necessarily have to move physical gold around, which seems to be your point. Countries on gold standard typically used paper money anyway which was redeemable for physical gold. So you could redeem a piece of paper which had been circulating as money for real gold if you chose so and when you felt it necessary

If we were on gold standard in this day and age, transactions would still be mostly electronic (digital), while gold would only be used for accounting and final settlements, without physically leaving its underground vaults and storage facilities. In essence, everything would remain as it is now for the most part

Yes I think people will use Cryptocurrency than gold if fiat currencies collapse. But after the Cryptocurrency period ends, I am very sure that gold will be re-used by everyone. Although gold stocks are scarce, public interest in gold is still very high.

If fiat loses its value completely then their reserves will be the thing can save their nation but gold is not the only reserve,now countries has different kind of assets like oil and other natural resources which is also things made the fiat backed up by gold into their own calculation.Don't think its going to happen but it is going to happen then reason will be people moved the value from their fiat into cryptos and other assets completely.

the big connotations always come from the last two currencies you mentioned, those who play dirty, but they also often worry. the gold option will not help the overall recovery, and all countries do not want destructive chaos, in the end fiat will be reset and fully functional for local trust, in this case gold will run in a multilateral composition related to resetting the economic system.

I think it will be difficult if we have to use gold again in the transaction. because the amount of gold is currently limited and rare. also very ineffective if we have to carry gold everywhere to conduct transactions. if the fiat financial system collapsed I think people would prefer to use cryptocurrency rather than gold. like what happened in Venezuela some time ago. When Venezuela experienced an economic crisis and the currency fell they did not turn to gold. they are looking for another alternative payment tool namely bitcoin. I think bitcoin is better than gold. although bitcoin also has risks because of its volatility.

I still believe that without too much political interference, fiat currency should be able to do its job. But the central banks continue to print fiat whenever there is a need, and this reduces its value. You can check the stronger fiat currencies such as the Japanese Yen (JPY) and the Swiss Franc (CHF). They have thrived, because the governments don't interfere much. If you check the purchasing power of the Japanese Yen over the last 50 years, you can find that it has remained stable unlike the other fiat currencies such as the USD and EUR. 

Anything could happen in the world, it is all about the system that's been followed globally. Throughout the world due to several economic challenges more currencies seems to be under inflation. Everything can't be taken back to control through bitcoin or cryptocurrency. To some extent this can give positive results, beyond this if nothing can be done then the gold reserve each country holds will help as a saviour in overcoming the inflation.

Yes, I think it will start again with the old Bretton Woods monetary system, when gold was not always promoted and considered a common asset that could be exchanged in any country.
Therefore, gold is still a very important asset to the present and in the future for thousands of years.

Why do you think that gold is not much, if you check government gold reserve alone, you will see that they have lost of gold and there are still lost of gold that has also not been explored. I am not saying that gold would be the typical solution to it, because gold cannot do it alone, but I can tell you that to an extent, gold can really do lots of work in saving the economy off the dyeing country, while if they also apply bitcoin, bitcoin could also help to sort out such thing too because it has limited supply.

The real thing that can solve these entire inflation problems is when we begin to pay attention to some of these other things like gold and bitcoin that all have limited supply unlike cash.

Gold cant save the system, the economy or people is for sure true, its just a yellow rock so what do we really expect from it.    The point is the gold will not change no matter what, think about what our paper money is based on now and its political debt and promises of nations to each other.   That paper is going to alter substantially, it could even be that nation no longer exists.   Certainly the paper and its promises can be nothing more then yesterdays newspapers, just old writing of something once true.    In comparison to gold, that will not be changing even in extreme situations.    The value of gold is proven through the rise and fall of empires many times over, almost all the currency we use today has not lasted as well as its only token value not real base value.
  When the price of gold stated rises, it is not the gold which has changed in any way that day, week or year even but the paper is deteriorating and not able to last over time.

Gold essentially is useless by itself and I class it as just a luxury type element but there always going to be rich people or those who have more money today then they can use for even the whole year so they must store it, etc.   No situation will eliminate gold as a touchstone to value so long as trade exists especially between 2 nations.   Gold can be used and is unique in a few ways, but most days we can find something cheaper like copper so we dont need gold.   However I think gold is going to last and most importantly for speculation purposes I have zero doubt over my life gold will be used more in future then now.   I love technology but gold the silly rock that it is, will prove less silly then our current promissory note system so its undervalued right now.


US dollar system as the basis for world trade was founded after ww2 when USA was a net exporter.  Today alot of the world has changed, we recovered from ww2.    I dont disagree on food and security but unless we return to the age of empires then the military wont be enough to back a currency.
  Of course its about trade and everyone on this thread can recognise what makes us all rich in whatever country, it is about business done and comparative advantage and the exchange of skills, services and goods for the enrichment of both parties in trade.   War is not profitable and neither is military, its not an economic system and empires ended just as UK had the world currency and an empire covering a quarter of the world and it ended not in a profit but at best some ongoing legacy.
  Time does not repeat it rhymes, we'll see the end of Dollar dominance of currency I think and it should be that then the system better benefits everyone who is productive and competitive in industry and trade but also I guess theres some wars, failures to trades, failed currencies, defaults and economic collapse but not for the whole world imo.

You might think that gold cannot do anything good in our economy but as yourself why a lot of governments are holding tons of gold in their reserves? Because they know it is one of the last ones to decrease in value when these types of things happen, they don't even print more fiat currency or hold some of it since this will just dig them deeper into the ground. This kinds of doomsday scenario has a very low chance of happening since governments are already prepared for this types of events and I'm pretty sure that they have a lot of precautionary measures before they even go into that level. They also have learned their mistakes from the previous recession and I think we will have a more better chance of surviving the next one.

If the "entire system" collapses even gold can't save that. Think about it the worlds currencies all are getting horrible and people are really getting screwed because of it and we are here talking about how gold could save it. There is no way if the all currencies (even just dollar devaluating like crazy is enough) goes down then how could be we save the world?

Everyone will be screwed, there would be a lot of inflation and since the world all owes each other dollars like crazy some countries will not have any money remotely close to what they will owe and they will all go bankrupt because USA will try to recover that loss quickly to save face.

Hence, I am telling you there is not enough gold in the whole world that is enough to cover something like an entire system collapse.

Gold and bitcoin good investment assets but depend with investor which one to invest, if investor like faced with big risk and big result will invest with bitcoin and altcoin, but for investor take safety with their investment choose gold as investment assets, I like for take risk with investing on bitcoin or altcoin because have increase profit higher than invest with gold.

we cannot deny if gold is indeed a good asset in investing from the past and the system and the benefits of gold investment are profitable but as technology develops there are certainly breakthroughs or ideas that can invest more than gold and maybe for that investment with crypto or blockchain currencies. it is a breakthrough that uses the progress of time and technology and can be used by all levels of society, of course

Not that much exaggeration, actually conversion of world currencies to one universal crypto will induce negative effect to the economy of the country. No standard will determine the price and economy, if one country will have the currency of the world, they couldn't bare to handle the changes abiding these. In that regards, if the entire system collapses, crypto will not be the most accurate solution, it is still the fiat by each and every country.

I don't know what you mean by "primary currency" here, but you are thinking in the right direction

Countries that are more self-sufficient in major items (like food industry and other such industries) than the rest of the pack don't need gold to back up their currency because it is already backed up by the strength of their economy. You may ask a question as to why the US is hoarding so much gold then? The answer is quite simple though

They can and most certainly will use gold as a weapon of economic destruction against weak countries which in case of a severe crisis will have to rely on gold in their economic affairs (maybe even for propping up their currencies) as it happened with the Soviets in 1970's that had to import goods for gold

Paper money replaces not only gold, but also any product, any material values ​​that can be exchanged in the state. Therefore, paper money at their face value is stamped on the amount of increase in gross national income of the state for a certain period.
I do not quite understand the reason why the Bank of the Netherlands is concerned about the possible general collapse of the global economy. In my opinion, this is too much exaggeration. Problems in the world economy have always been, however, they are completely solved by conventional methods.

Gold is indeed an expensive asset and losing it to some other country can cause trouble to the giver. However, I don't think that we will be going back to those days when gold was the medium of exchange. For me, it is just a jewel now and there are only few countries who really have good amounts of it. The future lies in digital gold, bitcoin. So it would be best to focus on it for improving economy.

There comes a time where there would be no need for money and no value for silver and gold from anyone. The system of barter trading just as it was recorded in the history books would resurface. Life is full of times and seasons, nothing would certainly last forever as new trends would always dominate.

There was a Japanese Emperor who lamented during a drought that it was no use having pearls and gold as you couldn't buy anything with them in a genuine catastrophe.

The US dollar is the primary currency because the US is self-sufficient in food and has a powerful military. That's all you really need.

Their lack of imagination is also terrifying.
In 500 years people will wonder why in the ancient history people relied, for store of value, on something with no clear and measurable scarcity.

Gold can still be a backup, but only for the near future. But on the other hand maybe banks will not even live for too long, or at least not like this.

The most interesting part is that central banks seem to have totally forgotten what the value of paper money was once based on: gold!

So first there was gold, then they made paper, now it's not even paper anymore but just numbers on a computer, and instead of going back to using gold to back this up, they want to keep inflating the fiat bubble until it pops first! Then and only then they go back to the basics, and if that happens you can just wait for another fiat bubble to be created.

It's kinda terrifying to know DNB holds only 350 euro worth of gold per citizen. Meanwhile, the government debt alone is 68 times higher! No wonder they love fiat money so much.

Your words are going to fall on deaf years

The reason for this is quite simple, though. To see things in their true light and proper perspective, you have to be an expert in these things, and while it is a prerequisite for drawing correct conclusions and inferences, it is still not a guarantee of their correctness because you may lack some important information (like pieces of a puzzle). Little needs to be said that the majority of people lack both such expertise and such information. But that doesn't prevent them from thinking they always know better, of course


Welcome to the club!

Ah, the doomsayers' arguments. You should take into account:
(1) the probability for a severe economic crisis;
(2) the probability for (1) followed by a severe political (power) crisis;
(3) the probability for (1) & (2) and all the chaos caused, somewhat drive Bitcoin usage.

You should read beerlover arguments up there.

I'm a hard-boiled dude. I don't need any savings.

PS: CryptoTalk bitches, please stop quoting my comment except you really want to address specific things.

It is best to have Bitcoin and gold at the same time. And in my preference, it is best to store those Bitcoin and gold yourself. The problem with third party is that you never know until when they can be trusted, or until when they are still there. Take note that being duly registered or licensed is not a guarantee. I don't trust third parties.

Gold and bitcoin both good option as saving assets if you have much money, many people have ready for saving money with their family education in the future and make mistake with saving money have lower value at the future with inflation, now better save your money with bitcoin or gold assets because give the same value although have holding for long time.

It depends on the time the collapse happens. If the collapse happened at a later time when digital currencies are at its peak and bitcoin would be one of them, bitcoin may also be hoarded by the people. It would be considered valuable as its demand is higher and is a good investment, alongside with gold. However, if crash would happen sooner than we think, people may not still hoard bitcoin, instead gold would be the best option or other rare materials because it's more necessary and valuable for people.

We don't even know whether when the crisis happening or the entire economic system collapses bitcoin will still hold the value or not. Bitcoin is always indirectly affected by such event and the Central bank saying Gold will be needed to start over is because they believe that gold will hold its value since it has always been like that since the ancient times. But, in my opinion when crisis happen that's when food worth more than gold I guess. So gold will be practically useless.

That big event is coming, we do not know when or what will be the exact causes of the next economic crisis, but what we know is that the system is unsustainable and sooner or later it must fall, at that point it will be irrelevant what the government wants or allows, people will be in survival mode and if that means using this weird currency called bitcoin they have been making fun of for years then that is what they will use regardless of the wishes of the government.

Well, bitcoin will be needed to start over as well.

I doubt "entire system collapse" will be a reality, economy is bigger than just numbers, it is also power and the world of rich and powerful people will not let the system collapse because that would mean they are gone as well, if wall street for example collapses then every single stock or company that was part of wall street will be bankrupted as well.

You know why USA printed 800 billion dollars out of thin air in 2008 when their whole deficit was couple trillion dollars? Because if wall street banks collapsed right there, then there would be THOUSANDS of companies going bankrupt in a single day with MILLIONS of jobless people out in the streets having nowhere to go or having any money to spend. USA would turn into Venezuela very quickly.

Gold is old fashioned way in starting over. We already have cryptocurrencies and I think with their technology called blockchain, it is enough for us to start over with a more advanced type of technology and with the power of decentralization. People love to be independent and to be more advanced so cryptocurrencies are much better compare to gold.

Their first mistake was to distribute their Gold geographically. Their second mistake will be when their request to have the Gold withdrawn be denied.

I'm pretty certain that we're already at a point where countries are afraid to request their Gold to be withdrawn, because that indicates distrust and you don't know how the other side is going to react to that. In that regard, they rather continue with the promise of owning x amount of Gold, where they can sell that promise to another sucker entity in the worst case.

I'm sure there are a lot of economical factors that play a role of importance too, because you can somewhat force other countries to not walk over you because you own a certain percentage of their Gold reserves. The more Gold you allow to be withdrawn, the more you put yourself in a disadvantageous position.

Exactly. Gold plays a big role in the economy. Especially on that disaster, the central bank's entire systems collapse. I think gold is the only way that they can be able to recover on their losses because even in a long period of time, The price of gold will never drop down but will continue to increase because it is very rare and so hard to find. Unlike bitcoin it only needs a massive adoption in order to reduce the supply, fewer supply means makes it expensive in bitcoin price.

What do you suggest, communism takes from the rich and gives to the poor, socialism will not work all the time.

There is a stagnation in the market and how to revive that depends upon individual government, many government hold gold as reserves and in times of crises they will be using that, will it revive the market is to be seen.

In the original post I read, "the IMF bashed Germany's adoption of the gold standard in the 1870s," yet we forget how quickly the German economy turned upside down around the 1920s. It may have been 50 years later, but things moved much more slowly within the area of economics. Globally, we had transitioned into the manufacturing era in the early 19th century and would be in that era for another 70 years. They needed a lot of help getting out of their recession, but it just goes to show the IMF is not always right or has the right view on a certain topic.

Let's fast forward to the current day. In recent months, the IMF has opened up to the concept of cryptocurrencies. There were some meetings or summits regarding monetary remittance in commercial banks with a creation of their own cryptocurrency. Each individual banking system is unique based on domestic regulations and given economic conditions, so it may not be legal in some countries, but it does introduce the concept of a completely virtual system. Of course, no system is too good or too big to fail, but looking at Germany adopting the gold standard and then letting it go is definitely one of the earlier examples. Main point is that we will need some sort of reserve bailout in this global economy if it were to collapse. Some central banks have had to bail out struggling countries like the ECB with respect to Greece's situation.

Many banking systems had gold as their choice, but there are other options especially within the world of cryptocurrency. Some coins or tokens are backed by stock within a company so they're like a utility instead of traditional gold-backed fiat currencies. I recently attended an AMA session hosted by some blockchain startups and they seemed to be attached to an alternate standard of backing their tokens as a utility. These tokens can be used on their platform and It is a rather new concept, but still similar to this gold standard requirement like most believe that we need. If each unit of currency was backed by a gold standard, there would be a much larger vault space needed for the actual gold whether it be for fiat or crypto compared to the days when Germany and the US had their respective gold standards.

Well that's my two (or three) cents, but let's just keep in mind that there is no perfect or completely fail-proof system especially with a shift toward cryptocurrencies. Maybe the IMF also missed the mark on cryptocurrencies and it doesn't have the right amount of centralization needed to move forward successfully. Only time will tell...

Yep, go ahead and store your Bitcoin in your own wallet. That's the best way to store Bitcoin IMO.
The same thing can be done with gold. You can store physical gold by yourself or assign 3rd party to store it for you in a vault.

About Bitcoin as a currency, the problem is that the government would not allow Bitcoin to be used as a legal currency. Except something "big" happens, fiat would not disappear anytime soon. Also, improvements (technical) need to be made before Bitcoin can on-board the majority of people on earth.

I'm not sure if gold is necessary. Bitcoin essentially performs the exact same function as gold as a store of value, except it exists on a trustless ledger, and is much more convenient for international remittance as opposed to gold.

We've already seen vaults in certain countries that hold custody over certain country's gold refusing to release them, and using them as leverage. I think that central banks should also be aware of centralisation of such reserves.

But yes, some sort of decentralised money will be needed as a money base, at the very least.

I would proceed with "caution". reports of 400 oz. “good delivery” bricks of gold found gutted and filled with tungsten within the confines of LBMA approved vaults in Hong Kong went back to time where Satoshi was still active on this forum.  Keep in mind those 400 oz bar were mostly traded on professional markets and turn over are alot lower, yet fakes do exist. Also tampering of serial no. on those bars does happen, consider the following:

DA investigating NYMEX executive - Manhattan, New York, district attorney's office, Stuart Smith - Melting Pot - Brief Article – Feb. 2, 2004

A top executive at the New York Mercantile Exchange is being investigated by the Manhattan district attorney. Sources close to the exchange said that Stuart Smith, senior vice president of operations at the exchange, was served with a search warrant by the district attorney's office last week. Details of the investigation have not been disclosed, but a NYMEX spokeswoman said it was unrelated to any of the exchange's markets. She declined to comment further other than to say that charges had not been brought. A spokeswoman for the Manhattan district attorney's office also declined comment.

"The offices of the Senior Vice President of Operations - NYMEX – is exactly where you would go to find the records [serial number and smelter of origin] for EVERY GOLD BAR ever PHYSICALLY settled on the exchange. They are required to keep these records. These precise records would show the lineage of all the physical gold settled on the exchange and hence "prove" that the amount of gold in question could not have possibly come from the U.S. mining operations – because the amounts in question coming from U.S. smelters would undoubtedly be vastly bigger than domestic mine production."

just be warned.  The truth is out there.

There is not alot of Tungsten gold stored in any volume because any big buyer of gold will reforge the gold they purchase and the asset is confirmed in quality at that time.   Its worth their time to do so, in particular instances there is fraud but it obviously damages the reputation of those involved and is not common place.  


Real gold bugs have been holding gold their whole lives and probably too great an extent which is why the vast majority dismiss gold as a form of money.   Its easily the case that many things return value better then gold ever will for most, just buying your own house is easily justifiable over gold for most as it helps reduce rent costs.  Where as gold stored does have a cost to it in storage its not zero but at least some form of security and holding is required.   Every person who works a career and hopes to retire should be saving a gold coin per year at least, so far as I know most people dont though China and India and other parts of asia do have more respect then the west I think.

   Gold is justified where the majority of money used is no longer employed profitable, like a scales tipping we will have bias switch back to gold as solid money and it will serve a purpose to society in its constant quality over time.   I think any big reset does involve gold as OP argues as it is a good touchstone for value over time between generations and a common point of reference between varied nations across the world, it has that use to the world that will be called upon in future more then now.   A rising usage is going to match a price rise also, it probably relates to some measure of volatility over years.

Keep in mind now a days you have more paper gold than physical gold, and there are plenty of Tungsten filled gold too!  I think physical delivery process may change significant for those 400oz CME gold bars, in that they would be melted on the spot to make sure it isn't filled with fake Tungsten bar inserts.  This is why you don't want those physical gold to be audited, so when the house of card fails, it would truely be too big to fail indeed!

value of dollar is backed by man with guns.  Man with guns needs to be paid just like anyone else to be loyal.  I wonder the magnitude of the problem shall become if they were paid with worthless fiat, would then dollar still be backed by man with guns? or man with mountain of toilet papers?

gold will always be a currency that is very used from before there was a bank system until the bank collapsed gold can always be relied on so it doesn't hurt if you have and store gold in physical form because someday it will definitely always be used for transactions and has a very sale value high.

Why would that be so difficult? If the USD collapsed, faith in fiat monies would be shattered. There would be an urgent need to circulate currency that people have faith in. I think the most intuitive response would be for governments to return to the pre-fiat system of gold-backed money.

This would probably devolve to fractional backing and free float again, yes, but for as long as government-issued notes are convertible to the underlying, it would function as expected.

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.

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.

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.

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.

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.

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

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


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.

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. 

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:

and full context:

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.

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.

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

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.

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.

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.

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

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.

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.

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.

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.

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.

There's nothing called perfect world and no system can be flawless, especially in global perspective! So if Banks are accumulating Gold and slowly moving away from the debt based economy, it is probably the need of the hour! Similarly when the banking system moved out of Gold standard to debt based economy, probably it was required for that time! Global economy is was more diverse and dynamic than a human mind can think off. So every solution given by all noble economists, will have a temporal effect! Among these, Gold seems closer to the reality.

So I see no surprise element after knowing that Banks have started accumulating gold to hedge the upcoming slowdown risk! Because Gold is the only precious metal that has proved anti-inflationary characteristics. Gold is being used as an investment asset since centuries! There's no wonder Banks or even commoners will entrust their wealth on Gold to encounter the odds!

They know their time is up, the distortions in the economy are getting too big to ignore and the next time a world crisis happens it will be impossible for the governments of the world to try to privatize those losses since they are heavily indebted as well, they had the opportunity to make changes to the system to solve those problems in 2008 during the crisis and they refused, now the problems are even bigger and there is no way to change things before the next crisis, they know their only way out of this is to print money but this will create huge inflation and they will steal the wealth of their citizens when they do this, so their citizens will lose confidence in their fiat and they will have to eventually back it with something like gold.

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.

If the banks are moving away from fractional reserves and inflationary currencies, two assets that they so do love controlling to make more money then you know that the system is flawed and it simply isn't working out. They are always one step ahead of the laymen that they have started hoarding gold by the start of 2010 and are continuing to do so by now. Good thing we now have cryptocurrencies to at least have our own hedge against inflation and financial crashes that the economists and experts are expecting to happen before the turn of the decade.

In my own humble opinion (am not an economist, by the way), I believe that any fiat money should be backed by gold or silver but we know that this has not been the case for the past many decades because many bureaucrats thinks otherwise. Now, that we are seeing many shaky foundations of the global economy, some central banks are reversing their policy on this matter and so they are now in the accumulation of gold frenzy. In the case of a global conflagration, I am sure that countries that hold good amount of these valuable assets can easily weather the storm. And yes, in case of a reset, there is no question that gold and silver will be the top assets that countries will consider.

Can we consider the central banks that now opted for more gold to be doomsday preppers? Well, I don't think they really care as they think that it can be the most practical thing to do in the face of the economy based on fiat money backed by mere promises of the government. On the personal level though I won't be hoarding gold and silver as they are not needed to survive in case of a global crisis. I prefer to stock on foods, water and other related provisions for at least a year and so some farming so I can eat my own produce without the need to ask them from anybody else and to buy from anyone.

Well, we could already expect the world to be rekt. Bloody banks only think of themselves, asking the people to spend more and more. They persuade the masses to spend, slowly increasing the global debt, and then this. Really. It's like we're fighting each other in war but one side is purely uneducated ones and the educated ones team up to bully the other side. US dollar has already been releasing more and more supply of it, saying it is for "economic growth" and yes, we could partly say that it is true, but at the same time it has also managed to damage the economic market sadly enough.

Well China is desperate for the yuan to become a reserve currency, and Russia is wary of using the dollar because it exposes them to the Americans regulating them.

I personally think the big risk is the euro. It barely survived the 2013 eurozone crisis. It has negative interest rates of -0.5% even though the world economy is still growing. It's doing worse than Japan (which has base rates of -0.1% and a positive yield curve).

I think the eurozone will be the epicentre of the next financial crisis, not the US, China or Russia all of which have a good grip on their financial systems. If you are part of the eurozone, like the Dutch, it makes sense to prepare for the worst.

Central banks all over the world with gold stored in other countries are requesting their gold be returned to home soil. The most publicized case may have been venezuela who asked that their gold be returned from the Bank of England, a request that was denied. Banks are also increasing their gold reserves as if in preparation of a crash. These have been ongoing themes for the last 5+ years.

There have also been big de-dollarization campaigns adopted by china, russia, turkey and other nations of the world who abandoned the dollar as if to insulate themselves from an expected crash of the US economy coupled with significant inflation of the US dollar.

It might be said these circumstances are not isolated and unique only to be found in the case of the dutch. But rather global trends that apply to nearly every nation on earth. If that is true, then what should we make of central banks across the world accumulating and hoarding gold reserves the way that doomsday preppers do?


Edit: BTW if anyone wants more info on central banks accumulating and hoarding gold keyword search:  gold repatriation.

This actually is true! If we see history of economics the greatest of the economies fell because of introduction of fiat and after every downfall the reinstatement of economy was done by taking just one metric measure which was gold. Solely because of the fact that it can quantifiable and it's demand is never destroyed. I have the biggest example which is the greek or the Roman empire both started with gold coins as currency but with time and time they added other metals to their coins for years and after that the coins were having almost negligible gold and economy soon started to fell down but it was then reinstated by Gold Only. Now let's see if this time it would again be gold or maybe cryptocurrencies.

The Dutch are unhappy at the way the euro is being managed by the European Central Bank.

See the following:

https://www.bloomberg.com/news/articles/2019-09-12/draghi-faced-unprecedented-ecb-revolt-as-core-europe-resisted-qe


But they got outvoted, and there is nothing they can do about it unless they exit the euro. Of course if they exit they'll need their own currency and they'll have to prove to the markets that the central bank can manage that currency well - and having a reserve of gold will be part of that.

....


Doomsday preppers have recommended hoarding precious metals like gold and silver for years in preparation of the big crash.

I remember a time when most might have agreed people hoarding gold were crazy. They would have said gold standards were flawed economic paradigms. Fractional reserve banking and inflationary currencies were our ideal standards. It seems the script has been flipped with a central bank admitting fractional reserve banking and inflationary currencies may not be the perfect economic policies professors at universities have long claimed.

Globally we've witnessed banks accumulating and holding gold reserves for some time now. There's a shift in the direction of the wind. These changes could be frightening to consider.

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?