Why are Central Banks buying gold at its highest?
12-15-2009, 08:30 PM
#1
Contributors
Thread Starter
Join Date: Aug 2008
Location: Zoo York
Posts: 9,986
Likes: 0
Received 0 Likes
on
0 Posts
My Ride: Alpine White 2006 530Xi (SLD)
Just reading this story right now:
http://www.bloomberg.com/apps/news?pid=206...y34Mg&pos=5
I really didn't think that Gold is even relevant anymore - all the speculative price inflation in the recent past, added to the dropping value of the dollar - didn't make much of it until now... anyone care to delve into this subject?
http://www.bloomberg.com/apps/news?pid=206...y34Mg&pos=5
I really didn't think that Gold is even relevant anymore - all the speculative price inflation in the recent past, added to the dropping value of the dollar - didn't make much of it until now... anyone care to delve into this subject?
12-15-2009, 08:36 PM
#2
Contributors
Join Date: May 2009
Posts: 399
Likes: 0
Received 0 Likes
on
0 Posts
Gold been and will always be our worlds greatest asset. To think of it what does this material do besides stay shiny that makes it so great? I guess maybe because all things tarnish and gold will always stay shiny. I guess it's something that can be passed on for generations.
12-15-2009, 08:49 PM
#3
Contributors
Thread Starter
Join Date: Aug 2008
Location: Zoo York
Posts: 9,986
Likes: 0
Received 0 Likes
on
0 Posts
My Ride: Alpine White 2006 530Xi (SLD)
As a material, gold has it's valuable properties. For example, it is the most effective heat shielding material (if you recall McLaren even used sheets of gold leaf to insulate the engine compartments on the F1 supercar). But I can't imagine that this is what is driving the purchasing.
Aside from gold being a store of value, it seems to grant power to those that own it. The true value of gold is probably in that - it's perceived value. Which is why I've never traded it and never really cared for it as an investment - I always thought that it was some outdated principle that is about to collapse. Yet even with most central banks having divorced their currencies from the gold standard, it still seems to hold some kind of immense value - otherwise, how would you explain this buying at the top of the market? And by the countries that are basically a step away from being third-world (although I believe the term "third-world" is also outdated).
Aside from gold being a store of value, it seems to grant power to those that own it. The true value of gold is probably in that - it's perceived value. Which is why I've never traded it and never really cared for it as an investment - I always thought that it was some outdated principle that is about to collapse. Yet even with most central banks having divorced their currencies from the gold standard, it still seems to hold some kind of immense value - otherwise, how would you explain this buying at the top of the market? And by the countries that are basically a step away from being third-world (although I believe the term "third-world" is also outdated).
12-15-2009, 09:14 PM
#4
Contributors
Join Date: May 2009
Location: SoCal
Posts: 10,496
Likes: 0
Received 2 Likes
on
2 Posts
My Ride: 2008 550I LOADED, all options except HUD and NV
Originally Posted by v_therussian' post='1074437' date='Dec 15 2009, 09:49 PM
As a material, gold has it's valuable properties. For example, it is the most effective heat shielding material (if you recall McLaren even used sheets of gold leaf to insulate the engine compartments on the F1 supercar). But I can't imagine that this is what is driving the purchasing.
Aside from gold being a store of value, it seems to grant power to those that own it. The true value of gold is probably in that - it's perceived value. Which is why I've never traded it and never really cared for it as an investment - I always thought that it was some outdated principle that is about to collapse. Yet even with most central banks having divorced their currencies from the gold standard, it still seems to hold some kind of immense value - otherwise, how would you explain this buying at the top of the market? And by the countries that are basically a step away from being third-world (although I believe the term "third-world" is also outdated).
Aside from gold being a store of value, it seems to grant power to those that own it. The true value of gold is probably in that - it's perceived value. Which is why I've never traded it and never really cared for it as an investment - I always thought that it was some outdated principle that is about to collapse. Yet even with most central banks having divorced their currencies from the gold standard, it still seems to hold some kind of immense value - otherwise, how would you explain this buying at the top of the market? And by the countries that are basically a step away from being third-world (although I believe the term "third-world" is also outdated).
2) As for gold, I think it's psychological value at work here. It has no real importance other than that. It makes the people that own it more powerful and it makes the people who's national banks own it sleep better at night thinking that they have (real or imagined) a tangible connection to the value of their paper currency.
12-15-2009, 09:31 PM
#5
Contributors
Thread Starter
Join Date: Aug 2008
Location: Zoo York
Posts: 9,986
Likes: 0
Received 0 Likes
on
0 Posts
My Ride: Alpine White 2006 530Xi (SLD)
I keep coming back to what one of my mentors has always told me about gold - however much I tried to resist the idea 
- "Gold is a store of value. And a very effective - if not most effective - at it". Guess, I'm just kicking myself in the sack now for never really accumulating any - I've actually sold off all my gold once and never bought any again. I've purchased some jewelry for my girl and stuff like that, but never really stored any for myself as an investment - my thinking has always been "since I can't afford even one bar, what's the point of buying any?"
And still, coming back to my original subject, I don't get why these governments would not start buying up land, for example? Land seems to be a much better store of value, as there is also a finite amount of it AND it will always be in demand. Not to mention, you can mine gold on certain land... but yeah, why not land? Why not invest that same money they're spending on gold into their own countries and try to revive their economies - you can't seriously tell me that the standard of living in Kazakhstan is high!
- "Gold is a store of value. And a very effective - if not most effective - at it". Guess, I'm just kicking myself in the sack now for never really accumulating any - I've actually sold off all my gold once and never bought any again. I've purchased some jewelry for my girl and stuff like that, but never really stored any for myself as an investment - my thinking has always been "since I can't afford even one bar, what's the point of buying any?" And still, coming back to my original subject, I don't get why these governments would not start buying up land, for example? Land seems to be a much better store of value, as there is also a finite amount of it AND it will always be in demand. Not to mention, you can mine gold on certain land... but yeah, why not land? Why not invest that same money they're spending on gold into their own countries and try to revive their economies - you can't seriously tell me that the standard of living in Kazakhstan is high!
12-15-2009, 10:29 PM
#6
Senior Members
Join Date: Jul 2008
Posts: 3,652
Likes: 0
Received 0 Likes
on
0 Posts
My Ride: 2006 BMW 550i
would you rather invest in dollars, which have only been around for a couple hundred years? or gold, which has had value for thousands of years.
the way the fed is printing money, the dollar might go bye bye.
do you really think that a paper currency that is controlled by a cartel (the fed) can last?
the way the fed is printing money, the dollar might go bye bye.
do you really think that a paper currency that is controlled by a cartel (the fed) can last?
12-15-2009, 11:00 PM
#7
Contributors
Thread Starter
Join Date: Aug 2008
Location: Zoo York
Posts: 9,986
Likes: 0
Received 0 Likes
on
0 Posts
My Ride: Alpine White 2006 530Xi (SLD)
Originally Posted by turboawd' post='1074461' date='Dec 16 2009, 02:29 AM
would you rather invest in dollars, which have only been around for a couple hundred years? or gold, which has had value for thousands of years.
the way the fed is printing money, the dollar might go bye bye.
do you really think that a paper currency that is controlled by a cartel (the fed) can last?
the way the fed is printing money, the dollar might go bye bye.
do you really think that a paper currency that is controlled by a cartel (the fed) can last?
and while I definitely think we're headed there eventually, I didn't think we're anywhere NEAR that point - maybe not for another 200-300 years.
12-16-2009, 05:36 AM
#8
Contributors
Join Date: Nov 2004
Location: NYC & LI
Posts: 2,460
Likes: 0
Received 0 Likes
on
0 Posts
gold is purely psychological in value and nothing more. you cant do much with it unless your building a spacecraft of electronics. you cant eat it or be sheltered by it so its worthless in real value. todays value is nothing more that an attempt to deflate the value of the US as a Uberpower. It historical value is the $400-500 an ounce range that it traded it for ever in times of certainty. Our political leaders have contributed to this and our current administration is feeding the frenzy. Just look at things objectively, yes the US economy has taken a hit as the rest of the worlds' has, but in the US we've taken steps to make money cheap so that most of the people can survive in one way or another, whether it be from buying Chinese products at Walmart, or by being able to borrow money at historically low interest rates. However, Europe in particular have taken a different monetary policy to the detriment of most of their society. The Euro is artificially inflated as it the PoundSterling. China plays its games and pegs its currency to the US as if it has an enconomy to support such moves. And if you ever wondered why China keeps buying up our debt, its rather simple, we are the Chinese economic driver. If the US economy is in free fall and our citizens cant even afford to buy the cheap stuff they are selling, their economy comes to a complete hault. Its a cycle, they MUST buy our debt to keep us up and running to keep themselves running, thats why i laugh every time we hear how they may stop investing in Dollars. Let them and see how far they go before the billions start to starve.
How this all effects us is in buying power of course and its the main driver of the explosion in prices for luxury items such as German cars and Swiss watches. Germany companies are begging the EU to cut rates and lower its currency to allow its exports to be more competitive, but those at the ECB think they are hurting the US economy by not doing such so everyone gets hurt in the name of their pride. Its a cycle that will break, and ultimately the price of gold will fall out and all those gov'ts buying it at the artificial prices that are supported today will take severe hits.
How this all effects us is in buying power of course and its the main driver of the explosion in prices for luxury items such as German cars and Swiss watches. Germany companies are begging the EU to cut rates and lower its currency to allow its exports to be more competitive, but those at the ECB think they are hurting the US economy by not doing such so everyone gets hurt in the name of their pride. Its a cycle that will break, and ultimately the price of gold will fall out and all those gov'ts buying it at the artificial prices that are supported today will take severe hits.
12-16-2009, 05:53 AM
#9
Contributors
Thread Starter
Join Date: Aug 2008
Location: Zoo York
Posts: 9,986
Likes: 0
Received 0 Likes
on
0 Posts
My Ride: Alpine White 2006 530Xi (SLD)
Originally Posted by m630' post='1074577' date='Dec 16 2009, 09:36 AM
gold is purely psychological in value and nothing more. you cant do much with it unless your building a spacecraft of electronics. you cant eat it or be sheltered by it so its worthless in real value. todays value is nothing more that an attempt to deflate the value of the US as a Uberpower. It historical value is the $400-500 an ounce range that it traded it for ever in times of certainty. Our political leaders have contributed to this and our current administration is feeding the frenzy. Just look at things objectively, yes the US economy has taken a hit as the rest of the worlds' has, but in the US we've taken steps to make money cheap so that most of the people can survive in one way or another, whether it be from buying Chinese products at Walmart, or by being able to borrow money at historically low interest rates. However, Europe in particular have taken a different monetary policy to the detriment of most of their society. The Euro is artificially inflated as it the PoundSterling. China plays its games and pegs its currency to the US as if it has an enconomy to support such moves. And if you ever wondered why China keeps buying up our debt, its rather simple, we are the Chinese economic driver. If the US economy is in free fall and our citizens cant even afford to buy the cheap stuff they are selling, their economy comes to a complete hault. Its a cycle, they MUST buy our debt to keep us up and running to keep themselves running, thats why i laugh every time we hear how they may stop investing in Dollars. Let them and see how far they go before the billions start to starve.
How this all effects us is in buying power of course and its the main driver of the explosion in prices for luxury items such as German cars and Swiss watches. Germany companies are begging the EU to cut rates and lower its currency to allow its exports to be more competitive, but those at the ECB think they are hurting the US economy by not doing such so everyone gets hurt in the name of their pride. Its a cycle that will break, and ultimately the price of gold will fall out and all those gov'ts buying it at the artificial prices that are supported today will take severe hits.
How this all effects us is in buying power of course and its the main driver of the explosion in prices for luxury items such as German cars and Swiss watches. Germany companies are begging the EU to cut rates and lower its currency to allow its exports to be more competitive, but those at the ECB think they are hurting the US economy by not doing such so everyone gets hurt in the name of their pride. Its a cycle that will break, and ultimately the price of gold will fall out and all those gov'ts buying it at the artificial prices that are supported today will take severe hits.
I agree with you on most of the points you're making though - whether we want it or not, we are in a deep binding relationship with China. But its not just China (although China is definitely the strongest of all) - the entire world is now involved in the Global economy. Which, once again, is why I'm puzzled by the re-allocation of power (i.e. gov'ts buying up gold). And while I'm on this subject, if they are buying this gold, someone must be selling it - they sort of decided to evade the subject in the Bloomberg article 
12-16-2009, 06:48 AM
#10
Contributors
Join Date: May 2009
Posts: 399
Likes: 0
Received 0 Likes
on
0 Posts
The real reason why gold is going up, certain countries already have no use for money anymore.only gold is trading in these countries likehttp://www.worldstarhiphop.com/videos/video.php?v=wshhDjvLJqko39g8Q7Lm