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Ringos

Why are central banks buying gold?

Recently a lot of the central banks around the world have been buying gold. In fact, they have been buying more gold in the last 12 months than any other period since the early 1970s.

Every central bank has its own narrative, but what you find with the absence of central banks selling gold is the understanding that most of what they are counting as reserves are really transitory.

Most central banks want to weaken their currencies, which is usually in the form of printing. The reason for this is to lower its liabilities. Since the federal reserve was established, the value of the dollar has gone from $1 to $0.07.

However, gold can't be printed, it's mined. Even in the mining industry, it's becoming increasingly difficult to find it.

With that, gold is the only asset that these banks have that isn't someone else's liability. When you own gold, it is what it is. You own it.

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