Rana Foroohat, Financial Times business columnist and associate editor printed an opinion piece on November 25, pointing to the revived ,half-justified “paranoia” of the “gold bugs”, that has soley been combined by comments from central bankers and investors in recent weeks.
“You have to really believe the sky is falling in order to hoard physical bars in a digital age.”
And whereas she doesn’t place her religion in gold itself,the very talk of gold points to a systemically fragile post-2008 horizon and therefore the new urgencies ushered in by an era of acute geopolitical uncertainties.
Need for an asset “that is not somebody else’s liability”
Foroohar points to the Dutch Central Bank’s (DCB) October warning- one that shocked several that is within the event of a financial reset and “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.”
Ray Dalio, the world’s 58th wealthiest person, billionaire investor and hedge fund manager echoed this at the Institute for International Finance conference this fall, raising the chance of a possible flight to global should America’s international creditors betray any signs of anxiety.
Bitcoin (BTC) bulls will no doubt keenly watch talk of the need for “a new, neutral global reserve asset” at the heart of the traditional financial sphere.
Foroohar, as early as 2016 notes, distinguished voices like JPMorgan, chief Jamie Diamond, hedge fund manager Stanley Druckenmiller have alleged there is an “unsustainable” fiscal situation, pointing to unfunded pension and aid (healthcare) entitlements within the United States.
“To offset the fiscal imbalance, the U.S remains locked into inflating its own balance sheet, keeping interest rates low, or even negative. Pushed to the extreme, on this view, this could depreciate the dollar, creating a situation in which investors no longer want to hold federal debt nor the currency itself.”
In Dalio’s words, the need for an asset “that’s not somebody else’s liability” points to gold or something else altogether.
Eurasia’s move faraway from the dollar?
“With China recently issuing its initial euro-denominated bonds bonds in 15 years, deepening tieswith European firms and edging away from the petroldollar, the gradual de-dollarization of Eurasia is another unfolding factor tahy could force America to sell dollars in order to settle its balance of payments in a new, neural reserve asset.”
Cameron Winklevoss, one of the eponymous family workplace Winklevoss Capital and co-founder of the Gemini crypto exchange argued that, in serving as a “Source of Truth,” Bitcoin can give advantages that aren’t confined to being a safe- haven asset or mere “digital gold”, parallel to Dalio and the DCB this October.
The twins also previously forecast the cryptocurrency with ultimately surpass the ~$7 trillion market cap of the precious metal.