- cross-posted to:
- economics@lemmygrad.ml
- cross-posted to:
- economics@lemmygrad.ml
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stop posting goldbugs, i beg of you
I think the analysis there is solid though, it seems that central banks are indeed starting to hoard gold because trust in the dollar and US bonds is starting to collapse.
gold ownership verifiable by blockchain held in vaults? cmon.
bonds have entered back to nothing ever happens territory + why exactly gold is needed aside from central bankers porky interests? holding too much in reserves is old timey behavior, no one gives a shit you hoard reserves (see russia).
it’s one of those i’ll believe it when i see first central bank selling gold to settle. right now they are just holding down their own currency for exports and porkies profit.
Bonds absolutely have not entered nothing ever happens territory. It’s pretty obvious that US bonds cannot act as a store of value in the long term. The faith in the dollar outside the west is rapidly collapsing, meanwhile western aligned countries like Japan are are starting to see disastrous consequences. https://franknez.com/worlds-largest-pension-fund-now-loses-61bn-as-dollar-falls/
The idea is not to sell gold to settle, but to have a currency backed by a physical commodity. I very much agree with the analysis here https://youtu.be/SV-jpJqDX7c
no, it’s the idea of goldbugs that some currency will get re-pegged to gold, thus gold will go the moon and they will get rich.
i can sort of accept hand wavy argument that dollar is (very)-softly-sorta-kinda pegged by oil (or it’s necessity rather), but retvrn to gold is just dreams. for one, there is no need. Frankly all trade could be bilateral literally today, with fake liquidity pools-like automated systems held by cb. what other commodity is there, if needed? compute by petaflops? usa would dream of it.
gold for settling yearly trade imbalances? it’s less flexible than interest finagling, and doesn’t exactly help with countries issues, cause no one fixes those anyway.
I don’t think it needs to be a return to gold. In practice it can be a basket of commodities. There’s nothing unique about gold, but what matters is that physical commodities have inherent value derived from the labour it takes to create them. Countries that are commodity producers have something of tangible value to offer, and that’s what underlies the strength and stability of their currency. In fact, petrodollar has been a big aspect of what gave dollar stability. Everybody needs to buy oil for their energy production, and that created a steady demand for dollars when it was the only currency you could by oil in.
I do agree that bilateral trade is the the most likely scenario in short to medium term, but I can definitely see something akin to Bancor being created by the BRICS and to give it legitimacy, it could be backed by a basket of commodities that BRICS countries produce.
In fact, petrodollar has been a big aspect of what gave dollar stability.
This could not have been more wrong.
Petrodollar was simply the US forcing the Saudis to accept US dollars for oil (after the embargo ended in 1974), which the US can freely print, but the Saudis were not allowed to use it anywhere to develop their own economy except to buy US military equipments (and to fund the lavish lifestyle of their elites). And because there is nowhere else to spend those large quantity of US dollars they had earned, the only place for those money to go would be to buy US treasuries to earn interests.
That’s it, there is nothing special about the “Petrodollar”. It does not finance the US government, nor did it confer the dollar its “reserve currency” status.
More accurately, Petrodollar is an imperialist tool by the US to force oil-producing countries into selling oil in exchange for freely printed US dollars but cannot use them to invest in their own domestic economy, hence they all ended up buying US treasuries.
The whole Petrodollar myth is perpetuated by Austrian school libertarians who are obsessed with gold and later crypto because their faulty model believes that the US dollar will collapse one day (never gonna happen unless by choice).
The reason their model is wrong is because they believe in a natural interest rate for the US dollar, which did exist when the dollar was pegged to gold previously during the gold standard and Bretton Woods era (fixed exchange rate), but is now completely irrelevant after the US dollar turned into fiat after 1971 (free floating exchange rate).
This is why the gold backed reserve currency is never gonna happen, folks! There is no natural interest rate in a free floating exchange rate system. Without government intervention, the interest rate will simply fall to 0%. The dollar is never going to crash, unless by choice. But the Austrians don’t understand this. Their model is completely and utterly wrong.
The only way to de-dollarize is for the countries to not have to export their surplus goods to the US anymore, and this requires another player (like China) willing to run a trade deficit to absorb those surplus goods from the exporting countries. Otherwise there is nowhere else for those surplus goods to go, and they still have to sell to the US. This is why all the exporting countries are panicking and trying to make a deal with Trump right now.
but I can definitely see something akin to Bancor being created by the BRICS and to give it legitimacy, it could be backed by a basket of commodities that BRICS countries produce.
Please explain how are we going to get a Bancor-like system with China running a $1 trillion trade surplus annually? Have you ever thought about that?
This could not have been more wrong.
Hudson has a different view on this https://michael-hudson.com/2025/06/hostage-to-the-petrodollar-how-oil-wealth-fuels-u-s-empire/
While Petrodollar certainly does what you describe, that in no way contradicts my point that the need for oil ensures constant global demand for dollars. Countries must convert their currency into dollars to buy oil.
The only way to de-dollarize is for the countries to not have to export their surplus goods to the US anymore, and this requires another player (like China) willing to run a trade deficit to import those surplus goods from the exporting countries. Otherwise there is nowhere else for those surplus goods to go, and they still have to sell to the US. This is why all the exporting countries are panicking and trying to make a deal with Trump right now.
That’s not true because the obvious way to create demand for surplus goods is by developing the global majority nations, raising the standard of living, and thus creating more consumption demand. This is precisely what China has been doing with initiatives like BRI where they help countries build infrastructure, and develop economic growth.
Please explain how are we going to get a Bancor-like system with China running a $1 trillion trade surplus annually? Have you ever thought about that?
I have, and I don’t see why that’s a problem. The whole point of Bancor is that it’s just a medium of exchange. How much surplus any one country runs is utterly irrelevant.
but why you need backing, is the part i don’t get? for who? for countries outside?
Both for countries outside, but also within BRICS because there isn’t much trust between different members, such as China and India for example, and nobody wants the repeat of the dollar where a single nation gains disproportionate control over the system. Since commodities aren’t inherently tied to a specific currency, that makes them a more neutral store of value.
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I found a YouTube link in your comment. Here are links to the same video on alternative frontends that protect your privacy:
Yeah I agree, I don’t think they’re hoarding gold for this reason.
Even just 5 years ago I would never have expected to see self-proclaimed Marxists posting Austrian school libertarian crap, but here we are.
Even just 5 years ago I would never have expected people on hexbear to use straw man arguments, instead of honestly engaging with what’s being said, but here we are.
Look, the reason I even bother to comment in this thread is to provide some context in the hopes that people don’t get fooled by Austrian school libertarian crap.
If anyone wants to take out their life savings and invest in gold or crypto, it’s in their own right. I am just here to provide the warning.
Literally nobody is advocating any Austrian school libertarian crap. What’s shocking here is that self proclaimed materialists reject the notion that commodities can be used as a store of value.
