A Quote by Alan Greenspan
Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise.
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When you own gold you're fighting every central bank in the world. That's because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the price of government bonds. And that's why central banks long have tried to suppress the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power.
We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K.
The problem right now is that central banks have not normalized their balance sheet since 2009. They're trying, but it's not even close. If we had another crisis tomorrow, and you had to do QE4 and QE5, how could you do that when you're already at $4 trillion? They might have to turn to the IMF or SDR or to Gold. Then, if you go back to the gold standard, you have to get the price right. People say there's not enough gold to support a gold standard. That's nonsense. There's always enough gold, it's just a question of price.
My treasure chest is filled with gold.
Gold . . . gold . . . gold . . .
Vagabond's gold and drifter's gold . . .
Worthless, priceless, dreamer's gold . . .
Gold of the sunset . . . gold of the dawn . . .Gold of the showertrees on my lawn . . .
Poet's gold and artist's gold . . .
Gold that can not be bought or sold -
Gold.
Miners produce the bullion. If there is going to be more demand for gold from investors and central banks, where is the gold going to come from? They have to dig it out of the ground and sell it. As the price of gold goes higher, their profit margins increase. So if you are very bullish like I am and think there is going to be a big increase in gold, it's a huge opportunity for miners.
Central banks are choosing to increase their gold holdings as a percentage of total reserves. They obviously think there is a reason to do that. It doesn't make sense to back up one currency with a hoard of other paper currencies. There needs to be a real anchor there. I think that central banks are well behind the curve. If you look at the percentage of above-ground gold controlled by central banks, it's historically low. Hence the fact that central banks are trying to increase their holdings. They've got a long way to go to get where they need to be.
Over the long run, the price of gold approximates the total amount of money in circulation divided by the size of the gold stock. If the market price of gold moves a long way from this level, it may indicate a buying or selling opportunity.
Gold is a commodity; over the long run, as we look back, it has not been a good investment. You can't look at the intrinsic value of gold as you can a business. Gold doesn't give you cash flow, and, at the end of the day, cash flow is what is important. Gold doesn't give you dividends.
It is a sobering fact that the prominence of central banks in this century has coincided with a general tendency towards more inflation, not less. [I]f the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with 'free banking.' The truly unique power of a central bank, after all, is the power to create money, and ultimately the power to create is the power to destroy.
But not gold in commercial quantities, Just enough gold to make the engagement rings And marriage rings of those who owned the farm. What gold more innocent could one have asked for?
In a private room he showed me the first specimens of gold, that is he was not certain if it was gold or not, but he thought it might be; immediately I made the proof and found that it was gold.
I don't even look at gold as gold anymore. Gold is just another piece of paper.
The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.
The obsession with gold, actually and politically, occurs among those who regard economics as a branch of morality. Gold is solid, gold is durable, gold is rare, gold is even (in certain very peculiar circumstances) convertible. To believe in thrift, solidity and soundness is to believe in some way in the properties of gold.
If all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central banks should pay attention to it.
Central banks have gotten out of the central banking business and into the central planning business, meaning that they are devoted to raising up-if they can-economic growth and employment through the dubious means of suppressing interest rates and printing money. The nice thing about gold is that you can't print it.
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