Wait, I've watched this episode before. The US owed France large amount of gold (the legal mechanism for this was called "the dollar"). France asked to redeem their dollars for gold, and the US said "nah, we're keeping it, enjoy your dollars".
The fear in non-US nations is that the US will not respect the agreements and refuse to hand over the gold if requested. Given all the Trump admin is doing, I don't think it's unjustified
Or move it to Canada. One of the advantages of the US was that it was far from Europe and safe in case of invasion or war. The US clearly cant be trusted anymore , but Canada can, and it also across the atlantic.
An invasion from who? I agree with you that Canada couldn't defend against an invasion from the US, but I also don't think that any country without nuclear weapons could defend against an invasion from the US. But I think that Canada could probably defend itself from an invasion from most other countries—the Canadian military is generally competent, and NATO and NORAD would almost certainly offer assistance.
Even then, who would want to invade Canada? Despite the recent political blustering, it seems incredibly unlikely that the US would invade Canada, and the only other plausible invader that I can think of right now is Russia, but their military isn't doing very well at all right now.
If the threat model is "the US goes rogue and does crazy stuff", Canada is a prime risk of suffering from such madness, so moving your resources there doesn't really change anything.
Agreed, but I'd argue that there's a big difference between the US making it difficult to access gold reserves stored there and invading/blockading Canada to the point where gold reserves stored there are unusable. The first seems unlikely but possible, while the second seems almost unimaginable, and even if the second does happen, I'd be more concerned about access to food/medicine than access to gold reserves.
(Although I'm Canadian, so this may perhaps just be wishful thinking on my part)
Stores of value are, for the most part, societal constructs. Anything has value as long as there is somebody willing to exchange something of theirs for it. That's also what makes value intangible as there is a built-in subjectivity in this.
Gold falls into the category "has always had value, so it will always have value" type of thoughts. And that's just what gives it value, out confidence that we can exchange it for something when you need it.
Central banks do a lot of things, including buying and selling currency with foreign partners. If you’re trading using weak or unstable currencies, gold may be a useful alternative.
Intangible financial systems rest (simplistically speaking) on fundamental concepts of trust and reliability (aka what I expect to happen will happen).
Once these factors start to breakdown, all these intangible forms of holding wealth loose value. Gold remains as a significant reliable long term store of value.
It can be used as a collateral for loans, last resort for currency buybacks, emergency resource in times of war... Mostly it's a reputational tool to inspire faith in the country's creditworthiness.
Sell. It's the cheapest option vs. moving (high risk).
$164 billions would make a nice investment into infrastructure without touching their "Sondervermögen".
Yet it's costly -- albeit they might get special conditions.
I hold Xetra Gold (tax free gains after 12mon).
Some argue it's safe, because it can be delivered to the relationship bank: it's not really, it's uneconomical, at least for average Joe (~3% up to ~20% of value, heavily depending on denomination).
https://en.wikipedia.org/wiki/Nixon_shock#American_policy_re...
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