De-dollarization: Europe joins the party

Timor Invest
https://ift.tt/32QAjXI

Mises Institute/Ronald-Peter Stoferle/9-13-2019

“The answer is de-dollarization. Gold, which many central banks now include in their balance sheets at market value, offers an alternative. It is indeed the only truly neutral asset available to governments and central banks. Around a third of the world’s gold holdings are held in the vaults of central banks. Nobody describes the banks’ rationale better than DNB, the central bank of the Netherlands: ‘Shares, bonds and other securities are not without risk, and prices can go down. But a bar of gold retains its value, even in times of crisis. […] Gold is the perfect piggy bank – it’s the anchor of trust for the financial system. If the system collapses, the gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank’s balance sheet and creates a sense of security.’”

USAGOLD note:  Stoferle goes scholarly at the Mises Institute website . . . He agrees with us that the dollar is not going to be replaced as the world’s reserve currency anytime soon, but sees, like we do, a continuation of the movement among central banks to hedge their reserves with gold.  If a key western European central bank or two (say De Nederlandsche Bank or Bundesbank) were to suddenly join in, it would be a major event in the gold market.

Source: USA gold