Wednesday, February 22, 2012

Gold banking Hoard and the Wiemar Republic Kite

The price of gold has increased to record levels following the collapse of the banks, as investors struggle to find something that will hold its value.

As a result gold, the most popular metal commodity is at record high prices.

The history of banks and the wealth of countries have always been linked to the gold reserve and as the global economic crisis has worsened more and more money has been created to compensate.

With the worry that banknotes may turn into some sort of Weimar republic kite and the uncertainty of property prices, it is no wonder that private investors are buying up gold like there’s no tomorrow.

It seems they are not the only ones.

The banks themselves are investing and hoarding gold.
With banking de-regulation it seemed as though dodgy investments and mysterious transactions, such as hedge futures trading and high yield investment programmes, conjured money out of thin air or so it seemed.

Today things have changed.

Central banks in general have become net buyers of gold since 2009 and it is estimated that around 17% of the world’s gold supplies are held by governments and banking institutions.

Quantitative easing has caused the US money base to triple since the banking collapse.

Trillions of dollars appear to have been created literally out of absolutely nothing.

It seems likely that most of the other economies have done the same and the global economy appears to be propped up like a house of cards.

If the central banks are stashing away gold, it seems a safe bet for the private individual to do the same.

If you look at the US economy, you will see that the value of the dollar has lost over a third of its value since 2001.

By contrast, the value of gold has increased by 500%.

With figures like this, it is no wonder that central banks are favouring gold over paper money. If you are thinking of investing, perhaps looking into buying gold may be something to consider.