De-Dollarization Continues!

Central Banks protecting their wealth with gold…you should too!

The world’s central banks have purchased 1,000 metric tons of gold a year for each of the last three years.

This year they are on track to do it again.

To do so, they are lightening up on their US dollar reserves.  

This move to gold is called de-dollarization.  

But it doesn’t need a fancy name or a complex economic explanation.  It’s all very simple.

Central banks around the world are legal counterfeiters.   The print money to give their governments and government cronies spending currency/money.  Currency/money that nobody earned honestly.  The currency/money they print takes on value to the extent that the currency/money held by people who came by it honestly, by producing goods or services, loses value.

This is called inflation.

The world’s central banks know exactly how this process works.  They fleece their own people with legal counterfeiting/money printing.  They don’t mind doing that.  But they have learned the hard way that they don’t want to be fleeced by US legal counterfeiting, US dollar printing.

So they are moving their reserves out of dollars and into gold.  They are trying to do it slowly, judiciously.  Imagine how fast the value of the dollar would fall it people knew that Japan was going to dump a trillion US dollars.  The dollar would plummet on foreign exchange markets.  The value of Japan’s dollar portfolio would collapse before the unloaded very much of it.  So they have to do it gradually.

That is what China has done.  It wasn’t that long ago that China held $1.317 trillion of US treasury instruments.  Now it is down to $784.3 billion.

That is a drop of more than a half trillion dollars!  

That’s de-dollarization!

And of course the price of gold has climbed significantly as China de-dollarized.  Gold was less that $1,300 an ounce when China’s holding of US treasury securities peaked.  Now gold has more than doubled.  In fact, gold is up more than 2 ½ times since then. 

Central banks know what is coming for the dollar.  They know what the US central bank, the Federal Reserve System, will do.  Exactly what it has been doing for more than a century: legalized counterfeiting, money printing.

So other central banks are protecting their assets by acquiring gold.

Go thou and do likewise!