Thursday, November 27, 2014

Top Citigroup Economist Attacks Swiss Gold Referendum

Citigroup Inc. Chief Economist Willem Buiter is out with  a report advising that the initiative requiring the Swiss National Bank to hold a fixed portion of its assets in gold makes no sense,

“There is no economic or financial case for a central bank to hold any single commodity, even if this commodity had intrinsic value,”  Buiter,  a former Bank of England policy maker, wrote.

Thus, he completely ignores the fact that gold can not be printed at will by central bankers, which means that gold has inflation protection that a fiat currency could never have. And that is a pretty good reason to have a 100% gold standard.

1 comment:

  1. Grandmaster Putin's Golden Trap

    For reference: the turnover of the market of paper gold, only of gold futures, is estimated at $360 billion per month. But physical delivery of gold is only for $280 million a month. This equates to a ratio of trade of paper gold versus physical gold to 1000 to 1.

    Using the mechanism of active withdrawal from the market of one artificially lowered by the West financial asset (gold) in exchange for another artificially inflated by the West financial asset (USD), Putin has thereby started the countdown to the end of the world hegemony of petrodollar. Thus, Putin has put the West in a deadlock of the absence of any positive economic prospects.

    The West can spend as much of its efforts and resources to artificially increase the purchasing power of the dollar, lower oil prices and artificially lower the purchasing power of gold. The problem of the West is that the stocks of physical gold in possession of the West are not unlimited. Therefore, the more the West devalues oil and gold against the US dollar, the faster it loses devaluing Gold from its not infinite reserves.

    In this brilliantly played by Putin economic combination, physical gold from the reserves of the West is rapidly flowing to Russia, China, Brazil, Kazakhstan and India (i.e. the BRICS countries). At the current rate of reduction of reserves of physical gold, the West simply does not have the time to do anything against Putin's Russia until the collapse of the entire Western petrodollar world. In chess the situation in which Putin has put the West, led by the US, is called "time trouble".

    The Western world has never faced such economic events and phenomena that are happening right now. The former USSR rapidly sold gold during the fall of oil prices. Today, Russia rapidly buys gold during the fall in oil prices.

    Thus, Russia poses a real threat to the American model of petrodollar world domination.