If Gold’s a Barbarous Relic, Why Do Governments Want it so Much?
Central banks have been buying gold every year since the financial crisis—particularly in the East. This, while gold is continually bombarded with propaganda about its uselessness, and that it doesn’t have a yield—compared to the $10+ billion of sovereign bonds sporting negative yields.
However, when Alan Greenspan, former Fed chief, makes unequivocal statements about the failure of fiat money and the value of gold, they cannot be ignored:
“I view gold as the primary global currency. It, and silver, are the only currencies that do not require a counterparty signature. They are the only currencies that have intrinsic value, and it has always been that way. No one questions their value, and they have always been valuable commodities, since first being coined in Asia Minor in 600 BC.”
“There is a widespread view that the 19th century gold standard didn’t work. I think that’s like wearing the wrong-size shoes and saying the shoes are uncomfortable! It wasn’t the gold standard that failed; it was politics.”
Putting a point on the topic of how governments may say gold is a barbarous relic but act differently, consider this comment from former German Finance Minister Markus Soeder, regarding the contentious negotiations with Greece, regarding the (fourth) bailout it requires to avoid immediate, catastrophic default:
“(Further Greek) aid should only be given against a pledge in the form of cash, gold or real estate.”
If central banks are buying gold while the most important monetary officials in the Western world are lauding it, that’s good enough for Hoffman.