Prosperous antiques, troubled gold.
In the distance, the Sino-US trade war has not yet dissipated, and the Russian-Ukrainian war has begun; Recently, the Federal Reserve continued to raise interest rates, Silicon Valley banks fell in response, and the global banking crisis began at the beginning.
In the first quarter of this year, global central banks bought 228 tons of gold, an increase of 176% year-on-year, and mainland central banks also bought gold for six consecutive months. The gold price has also continued to run at all-time highs since the outbreak of the epidemic in 2020.
Human cognition and preference for gold is actually the history of human beings themselves "mining, accumulating, plundering" wealth, and "showing off, conquering and war" power. It was separated from the mine and hoarded in a warehouse with high security and confidentiality.
However, in fact, gold itself is not very useful, on the contrary, the purer the gold, the easier it is to deform, which is very suitable for filling teeth.
Gold's most striking property is its natural scarcity and chemical stability: in the United States, a large number of hull salvage companies are dedicated to finding ships that have sunk to the bottom of the sea, and Mexican or Peruvian gold coins plundered by Spain as early as the 16th century still lie intact on the bottom of the sea hundreds of years later.
This indelible character became the most ideal material for a dynasty to emphasize eternal power, and it also became the basis of modern society, the Bretton Woods system in the United States.
During World War II, most countries were impoverished by the war, but the United States made a lot of war wealth during this period. In 1948, the world's gold reserves totaled 30,200 tons, and the United States alone owned more than 70% of them.
On this basis, the United States promised the world that $35 could be exchanged for an ounce of gold, successfully establishing the initial dollar value and forming dollar hegemony.
As the impact of the war on the economy gradually faded, social productivity began to increase significantly, but the total amount of gold worldwide was difficult to increase, a large amount of gold was exchanged, and in 1968, the gold reserves of the United States were almost cut off, falling to less than 10,000 tons, accounting for 70% of the world's share to 25%.
Even so, the United States still has the largest gold reserves in the world.
The country that loves to buy gold
Gold flows out of the United States almost every year, and the most popular buyers are Russia and China.
Since the beginning of the 21st century, the largest buyer of gold has been the Bank of Russia, followed by the Central Bank of China, which bought 1917 tons and 1616 tons of gold respectively.
Russian Finance Minister Anton Siluanov said that investing in gold is more sustainable than investing in other financial assets in the long run, and doubled the upper limit of some national wealth funds to invest in gold, that is, from the original 20% to 40%. [3]
In China, according to the latest gold reserve data released by the People's Bank of China on May 7, China's ungold reserves in April were 66.76 million ounces (about 1,893 tons), stacked up about 100 cubic meters in size, if placed in a safe, the size of Fast and Furious 5 requires about five.
If you let Lalala move 20 kilometers, it will cost about 60,000 yuan.
Russia: Had to buy
Although both China and Russia are the largest buyers of gold since the beginning of the 21st century, historically the pace of buying gold has not been the same.
Russia is bought every year. In 2000, the Central Bank of Russia held only 384.4 tons of gold reserves, and since 2006, Russia has continued to buy gold, at its peak, buying 274 tons a year.
Don't look at how good the Russian finance minister said about investing in gold, in fact, the reason for buying gold in Russia is simple:
First of all, as a large resource exporter, Russia exports a large amount of oil and natural gas every year, and after earning a large amount of foreign exchange, it needs to buy gold to balance foreign exchange risks, and some even settle directly in gold.
Secondly, after the start of the Russian-Ukrainian war, Russia was sanctioned, in order to ensure the stability of the ruble exchange rate, one of Russia's emergency measures was to directly link the ruble to gold--- 1 gram of gold is equivalent to 5,000 rubles[4] If calculated according to the gold price at that time, the exchange rate against the US dollar was about 80:1, and the ruble was 150:1 against the US dollar.
After the introduction of the measure, the ruble returned to 80.89:1 against the dollar. [5]
China: Buy at your time
China's central bank is more timed to buy gold. The PBOC's large purchases of gold were concentrated in special years, namely 454 tonnes in 2009 and 708 tonnes in 2015.
China bought gold in large quantities in 2009, mainly to hedge against the impact of the US subprime mortgage crisis.
Central banks bought a total of $28 billion in gold bars at an average price of $978 an ounce due to widespread concerns about the dollar's depreciation, according to WGC. Among them, the three emerging economies China, Russia and India bought the most, and other younger brothers such as the Philippines and Kazakhstan also turned their dollar reserves to gold in which year.
From the perspective of the rearview mirror, China's large purchase of gold in 2015 is more like a precise bottom-hunting by the mainland central bank.
From the average annual price of London gold, the price of gold in 2015 is the bottom of nearly a decade, and from the current trend, it is difficult for gold to return to the situation in 2015.
Who loves to sell gold?
Although gold in the United States is mainly outflowing, since the beginning of the 21st century, Switzerland has sold the most gold.
After all, in 1971, the United States announced that it was in trouble, breaking the dollar and gold just exchange, and since then the United States gold reserves have been maintained at the level of 8133 tons.
Since the beginning of the 21st century, Switzerland has sold 1,379 tonnes of gold, and at its peak it sold 283 tonnes of gold a year, which is 4.6 times the current reserves of all low-income countries combined. It was followed by France, which sold 588 tonnes of gold during the period, and at its peak sold 160 tonnes of gold in a year.
Gold's safe-haven properties
From the point of view of the time of selling, there is still a commonality among the central banks of these countries, that is, the time point of selling is generally concentrated before 2008, accounting for 91%.
The reason is that after the outbreak of the financial crisis in 2008, the central bank's awareness of risk aversion increased, and gold naturally has safe-haven properties, so it has significantly reduced the proportion of gold sold, and even changed from short to long.
Looking at the world, this consensus of "idling more" is even more obvious.
Before 2008, global central banks were actually a staunch gold bear, and after 2008, global central banks became the most determined buyers.
The reason is that after the outbreak of the financial crisis in 2008, the United States began to print money and issue bonds at the same time, and other countries could only watch the dollar depreciate in their hands.
Therefore, gold, which naturally has monetary properties, has naturally become the "guest" of major central banks. Moreover, in theory, the dollar is infinite, while gold is finite, and of course, most importantly, the printing press for the dollar is only available to the United States.
In addition, compared with the depreciation of the US dollar, gold can also appreciate, according to statistics, the annualized yield of gold in the past 55 years is 7.62%. [2]
The twenty-eight law of gold
For individuals, gold jewelry, to a certain extent, symbolizes personal wealth, so will it be the same for the country?
There are two eight laws in the distribution of social wealth, and this law also exists in the global distribution of gold. Geographically, the relatively wealthy continent of Europe and the United States has gold reserves of nearly 24,000 tons, of which 15,300 tons in Europe and 8,700 tons in the Americas.
And the central banks in other regions, even if they add up their gold reserves, only exceed 75000 tons, less than half of Europe.
Secondly, this phenomenon is even more pronounced in terms of the participation of state revenue. In 2000, the share of gold reserves of central banks in high-income countries was 88% of the gold reserves of global central banks.
Although middle-income countries have exchanged gold from high-income countries for cheap labor or natural resources with economic globalization, the gap is still huge, and the gold reserves of high-income countries have always been much larger than in other countries.
According to 2022 data, the share of gold reserves in high-income countries is still more than 70%, which is 3.4 times, 10.2 times and 370 times that of medium-high, low-middle, and low-income countries, respectively.
Surpassing the United States after 67 years
In social distribution, in addition to the law of twenty-eight, there is also class mobility due to distribution. If the top 10 buying countries continue to buy gold at the average rate of nearly 20 years, how long will it take to buy to surpass the US?
Of these countries, only Russia and China can achieve this goal within 100 years. Among them, Russia is the fastest, taking only 67 years, and China takes 83 years. Iraq, Poland and Thailand will all need more than a thousand years to achieve this ambitious goal.
Assuming that the gold price is $2,000, to achieve the goal of surpassing the United States, Russia needs to spend $374.994 billion, which can support Russia and Ukraine for another three years. China needs $393.715 billion to build 13 more Three Gorges dams.
End
To quote from The Economist magazine:
"When everything else is at risk, gold looks like a good investment. Most people expect gold to serve as a store of value for a long time, and even if its value falls, gold can be shaped into various beautiful shapes and worn around the neck to attract the attention of neighbors. These are all things that people don't get from stocks that have little value. ”
It is true that the statues of Buddha and the sculpture of the Virgin Mary are gilded, the burial of royalty and nobles must be accompanied by gold ornaments, and Chinese aunts have also set a record of buying 300 tons of gold in 10 days, and the mainland central bank has bought only 116 tons for six consecutive months.
Nowadays, there is a joke on the Internet that says that the main contradiction at present is the contradiction between the people taking cash to depreciate and losing money when they throw it out.
However, gold, as always, retains its value.
[1] Central bank holdings,World Gold Council
[2] Learn from history: where gold goes, brocade
[3] Why many central banks continue to "+ gold", Wall Street has seen it
[4] The Bank of Russia has amplified its move! The ruble is about to turn into a lu "gold", snowball
[5] Russian ruble bound to gold, export ruble settlement, how to look, NetEase News
[6] This generation of young people, together with the central bank, grabbed gold, and the leopard changed
[7] Where Capital Went in the "Golden Age", 36kr
Editor: Zhang Zeyi
Visual Design: Shurui
Responsible editor: Zhang Zeyi