Just fyi, that article is from 2008. It makes an interesting comparison see how things changed over a few months.
And this: If gold jewelry were taken into consideration and not just Bank Reserves, India would be the country with the most gold contained within it’s borders, estimated to be over 13,000 tonnes. (from the same article)
[Edited 2009-07-16 23:21:31]
Life only makes sense when you look at it backwards.
AM744 From Mexico, joined Jun 2001, 1689 posts, RR: 0 Reply 7, posted (3 years 10 months 1 week 5 days 10 hours ago) and read 8022 times:
Has Italy always had a large percentage of its reserves in gold? Lira wasn't that strong back in the day, what's up with that? I'm no economist, so bear with me here.
FuturePilot16 From United States of America, joined Mar 2007, 2018 posts, RR: 0 Reply 8, posted (3 years 10 months 1 week 5 days 9 hours ago) and read 7991 times:
The best kind of insurance to have is gold. But we still don't have enough to get ourselves out of the current debt that we're in.
"The brave don't live forever, but the cautious don't live at all."
Pellegrine From United States of America, joined Mar 2007, 1845 posts, RR: 8 Reply 10, posted (3 years 10 months 1 week 4 days 15 hours ago) and read 7908 times:
I think one of the dumbest decisions the UK has ever made in recent history was to sell many hundreds of tonnes of their reserve on the open market a few years ago. This was a few years ago.
if the USA per capita had as much as Switzerland it ought to have 41'600 tons, and Germany 10'000 tons. The per capita figures would be interesting ! With an obvious leader
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Quoting Phoenix9 (Reply 3): If gold jewelry were taken into consideration and not just Bank Reserves
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This also leads to the question whether the figures mentioned only refer to the gold reserves of the National Banks or whether the commercial banks were included. In Switzerland, UBS and CS hold as much gold in their cellars as the National Bank. And the two even OWN a good part of the stuff.
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Quoting AM744 (Reply 7): Has Italy always had a large percentage of its reserves in gold? Lira wasn't that strong back in the day, what's up with that? I'm no economist, so bear with me here
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The Lira in some ways WAS a strong currency. It only got down exchange-rate wise due to inflationary practices and these again were the results of the Italian Republic to have had, since 1946, some 50 different governments. From its basis and from the results of the Italian economy, the Lira ought to have been (but never was) the best currency on earth.
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Janmnastami From Italy, joined Apr 2008, 824 posts, RR: 0 Reply 14, posted (3 years 10 months 1 week 1 day 4 hours ago) and read 7697 times:
Quoting AM744 (Reply 7): Has Italy always had a large percentage of its reserves in gold?
Italy has a large amount of gold because the national bank, as a consequence of the country credit-risk, chose to have an asset with a value independent from other financial assets. For example, during the 1976 crisis Italy obtained a large loan from the Bundesbank with the guarantee of its gold.
Remember also that Italy devalued Lira many times in order to increase export (Italy is the 6th largest exporter country of the world).
PPVRA From Brazil, joined Nov 2004, 8492 posts, RR: 43 Reply 15, posted (3 years 10 months 1 week 1 day 4 hours ago) and read 7688 times:
Quoting AM744 (Reply 7): Has Italy always had a large percentage of its reserves in gold? Lira wasn't that strong back in the day, what's up with that? I'm no economist, so bear with me here.
While the gold reserves help, there was no convertibility between the Lira and gold. Meaning it wasn't backed by gold.
Gold convertibility ended in 1971. Between 1971 and the end of world war II, most currencies had to be exchanged for US dollars, then could be converted into bullion. This was called the Bretton Woods system (there's more to it than just that though).
"If goods do not cross borders, soldiers will" - Frederic Bastiat
Phoenix9 From Canada, joined Aug 2007, 2546 posts, RR: 8 Reply 16, posted (3 years 10 months 1 week 1 day 4 hours ago) and read 7681 times:
Quoting PPVRA (Reply 15): While the gold reserves help, there was no convertibility between the Lira and gold. Meaning it wasn't backed by gold.
If I'm not mistaken, thats the case for most of the currencies now...hardly any of the countries have enough gold reserves to backup their currency. Especially given that billions have been poured into global economy in the past few months.
Life only makes sense when you look at it backwards.
PPVRA From Brazil, joined Nov 2004, 8492 posts, RR: 43 Reply 17, posted (3 years 10 months 1 week 1 day 4 hours ago) and read 7675 times:
Quoting Phoenix9 (Reply 16): If I'm not mistaken, thats the case for most of the currencies now
It's been that way since 1971 for just about everyone. That I know of, only the Swiss Franc had some backing (40% -- a legal requirement), until ten years ago or so.
And it wasn't really a choice most of the world had. Since everyone was linked to the dollar (largely the reason why the USD is the world's reserve currency), once the US dropped the convertibility, everyone was out of the pseudo-gold standard.
As nations are slowly learning now, the USD isn't "as good as gold" anymore. Hasn't been in a while.
[Edited 2009-07-21 15:02:56]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
Phoenix9 From Canada, joined Aug 2007, 2546 posts, RR: 8 Reply 18, posted (3 years 10 months 1 week 1 day 4 hours ago) and read 7668 times:
Quoting PPVRA (Reply 17): As nations are slowly learning now, the USD isn't "as good as gold" anymore. Hasn't been in a while.
The fact that oil is pegged / traded in USD, it continues to be the reserve currency. If OPEC decides to trade in Euro, for example, the USD value may plummet considerably....however, the political situation being what it is in the middle east (especially Saudi Arabia), that is unlikely to happen anytime soon.
Life only makes sense when you look at it backwards.
Greaser From Bahamas, joined Jan 2004, 1081 posts, RR: 4 Reply 19, posted (3 years 10 months 1 week 1 day 3 hours ago) and read 7666 times:
Quoting Phoenix9 (Reply 18): The fact that oil is pegged / traded in USD, it continues to be the reserve currency. If OPEC decides to trade in Euro, for example, the USD value may plummet considerably....however, the political situation being what it is in the middle east (especially Saudi Arabia), that is unlikely to happen anytime soon.
US currency also happens to be a very strong source of stability. I was reading on the NPR's website the other day that foreign currency holding reducations would actually help reduce long term inflation, as the US prints less dollars in view of lower foreign demand. If OPEC trades for the Euro (as it has threatened), I agree the USD value will drop due to speculation, but the Mint will cut the no. of notes out there almost immediately but slowing printing.
PPVRA From Brazil, joined Nov 2004, 8492 posts, RR: 43 Reply 20, posted (3 years 10 months 1 week 1 day 3 hours ago) and read 7652 times:
Quoting Phoenix9 (Reply 18):
The fact that oil is pegged / traded in USD, it continues to be the reserve currency. If OPEC decides to trade in Euro, for example, the USD value may plummet considerably....however, the political situation being what it is in the middle east (especially Saudi Arabia), that is unlikely to happen anytime soon.
Pretty much
Quoting Greaser (Reply 19): I was reading on the NPR's website the other day that foreign currency holding reducations would actually help reduce long term inflation, as the US prints less dollars in view of lower foreign demand.
Dumping the US dollar would increase it's supply. It's value would then fall.
If OPEC drops the dollar, that is major no-confidence vote.
Quoting Greaser (Reply 19): but the Mint will cut the no. of notes out there almost immediately but slowing printing.
That's what you'd think, but we know there are many examples in history (even more recent, Zimbabwe) of that not happening. The big problem is spending, which is why the printer keeps going. That is much harder to stop.
In fact, printers don't even matter nowadays anymore. Only a tiny portion of the money supply is physical currency (coins and bills), most of it is debt:
ME AVN FAN From Switzerland, joined May 2002, 13874 posts, RR: 28 Reply 21, posted (3 years 10 months 1 week 4 hours ago) and read 7583 times:
Quoting Janmnastami (Reply 14): Italy is the 6th largest exporter country of the world
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Exactly. This is an aspect people often forget.
Quoting PPVRA (Reply 15): most currencies had to be exchanged for US dollars, then could be converted into bullion. This was called the Bretton Woods system
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Well, what I ever heard about the Bretton Woods system had to do with the fixed exchange rates. People in Switzerland always could buy gold with Swiss Francs, and nobody would have considered first to buy a currency of a country where gold-trading always was restricted, while it in Switzerland was free. And Switzerland WAS part of the Bretton Woods system. In 1970/71 we often had a US-American customer who came to Switzerland with gold coins which he could freely sell in Switzerland but not in the USA.
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True, you write "must", which is a matter of interpretation.
AirCatalonia From Spain, joined Nov 2007, 532 posts, RR: 0 Reply 22, posted (3 years 10 months 1 week 4 hours ago) and read 7580 times:
I don't understand why a country clings to eight thousand tons of gold while its national debt keeps growing beyond measure. Wouldn't it be more sensible and beneficial to sell the gold and pay off at least part of the debt?
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It is A) a prestige matter and second B) a highly emotional matter. Switzerland by modern criteria, even if only the gold in the hands of the National Bank is counted (possibly 50% of the total) , has far more gold than needed. And so, political parties and whomever fight about what to do with the unneeded surplus. In Switzerland, the union depends on declining customs duties, as well as on alcohol taxes, petrol taxes and VAT, with the cantons getting the income and wealth taxes, so that the union is usually in dire straits. Many however say that if you sell gold, the proceeds will be used up within one or two years, so that this cannot be the solution.
Janmnastami From Italy, joined Apr 2008, 824 posts, RR: 0 Reply 24, posted (3 years 10 months 1 week 3 hours ago) and read 7565 times:
Quoting AirCatalonia (Reply 22): I don't understand why a country clings to eight thousand tons of gold while its national debt keeps growing beyond measure. Wouldn't it be more sensible and beneficial to sell the gold and pay off at least part of the debt?
There's an agreement between many central banks and countries which establish how much gold each central bank can sell (to control its price).
The biggest problem of Italy is tax evasion: more than 100 billions every year.
[Edited 2009-07-22 16:11:26]
25 PPVRA: That's right. Nations would peg their exchange rates to the dollar, which in turn was pegged to gold. Problem is, you could fire off the printers and
26 AerorobNZ: and in terms of natural reserves of Gold in the ground.....?? I suspect South Africa & DRC would be up there...
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