Gold: A Global Perspective
Russia and China are in the lead when it comes to buying gold as these two economic giants prepare themselves for the fall of the dollar. Vladimir Putin and the Chinese government are competent when it comes to economics and they know that the current strength of the dollar is the right time to convert it to gold, after all if they do need dollars again, they can always get more dollars by selling the gold that they are buying now with dollars at much higher prices.
The logic is that their dollar reserves currently allow them to buy more gold than they ever could before, and as soon as the dollar falls, they could sell the gold and get even more dollars for the same amount of gold.
The fact that the economy of the US is practically in shambles attests to the fact and the only reason that the dollar is seeming gaining strength is because other currencies are weakening and not because the US economy is growing. The illusion that the dollar is strong is the other reason why it remains strong as investors gain confidence in the greenback, but what is the confidence in the greenback being based on is largely being ignored.
It is nothing more than market sentiment and the position of the dollar currently is in fact an extremely dangerous position to be having your entire savings on as the dollar does not own the very ground that it stands on based on the fact that the US debt levels are monstrous.
Russia, China, India and other smaller economies have begun to steer away from being dependent on the dollar or the US economy, why should they, everything is much more expensive when the dollar comes into play, therefore it is much better for them to trade with other nations where their currencies have not depreciated as much.
Nobody believes that America has the biggest stash of gold any more, ever since Germany wanted its own gold back and all the Americans did was give them excuses instead of gold says a lot about what they actually have stashed in Fort Knox, citing transportation as an issue?
A country that transports nuclear warheads with such ease told the German’s that it would be risky to transport the gold and when the German’s requested to inspect the gold, they were told that it would be against protocol!
Speaking on the subject, gold industry refiner Micheal Caculca from Melbourne Gold Buyers stated in a phone call:
“Reality over Americas actual gold reserves will no doubt strike the world soon, and once the world realises what we already highly suspect (that the American gold reserves are non existent), investors who are prepared to profit (by taking prior ownership of physical gold bullion) will be in for the ride of their life time.”
According to the IMF, Russia, China and India have been the biggest net purchasers of gold for 8 successive years and in 2015 alone Russia and China bought 590 tons of Gold which accounts for 14% of the total annual global demand.
If at all the gold standard is to return in some format, any currency worth having would be a currency that is back by gold, much like the US dollar was back in the day, and if the US government do not have enough gold to support their currency, how long will its current position as a reserve currency hold up?