I'm a mineral exploration geologist, and so cannot effortlessly decode what's going on with the ins-and-outs of the current rapid (or rabid) central banks ingestion of already mined metallic gold. For example, China is busy vacuuming up as much as the marketable stuff as it can -- and at the same time it is producing as much as they can out of the ground (https://www.linkedin.com/pulse/reprise-stark-comparison-larry-turner-jrdsc/). In the long-run, what macroeconomic and microeconomic advantage, if any, do countries like China hope to obtain by this precious metal hording? Likewise, what advantage would North and South American countries obtain by ramping up their exploration success rate and mining production rate to level comparable to that of China?
My 2ct? I think that trade settlement is partially already happening between the US & China. Especially on the rare-earths angle. Case in point: F35 won't be delivered with radars for years to come. (which would need rare earths).
""The US is apparently net-settling its trade deficit with China in gold - if that data holds up. In three of the last four months it seems that gold is flowing East. No Bretton Woods conference. No announcement. Just two countries quietly deciding that when the paper gets complicated, the metal clears the table. That's how monetary systems actually change - not by proclamation but by practice, one bilateral settlement at a time...""
I strongly believe we're living through a monumental change in settlement systems right now, and there's a few things that can insulate you: food, manufacturing, gold, knowledge. In about that order.
Too bad in the US we have GMOs, everything's been shipped to China, Fort Knox is likely empty and student literacy and numeracy is abysmal.
I don't know, but I suspect viewing the "monumental change in settlement systems" as the two countries tacitly and quietly agreeing that paper is complicated might be too Western-centric. It could just be that China is just pulling in its economic arms and legs out of harms' way while the West economically and uselessly thrashes about and starts to drown in cold and deep water, all the while threatening to drag bystanders (byswimmers?) down with it.
I'd have ordered it: basic natural resources (including food, health, knowledge, and experience), derivative agriculture/manufacturing (including mining), and then that pet metal, gold.
As to China's high rate of endogenous gold production -- that would seem to be inflationary (dilutive) in the long run. Ditto from the West if it eventually got up to Eastern/Russian exploration efficiencies.
Thanks No1...Always look forward to your posts landing.
Regarding the Chinese gold hoarding, for some context the Agnico Eagle mine in Meadowbank poured 5.1 million ounces of gold from 2010-2024.
1 metric tonne = 32150.7 troy ounces
32150.7 * 162.67 = 5.23+ million ounces.
Give or take... in one month they whoarded as much gold as a single mine operating for 14 years with men equipment diesel fuel the likes.
That says a shit tonne.
I'm a mineral exploration geologist, and so cannot effortlessly decode what's going on with the ins-and-outs of the current rapid (or rabid) central banks ingestion of already mined metallic gold. For example, China is busy vacuuming up as much as the marketable stuff as it can -- and at the same time it is producing as much as they can out of the ground (https://www.linkedin.com/pulse/reprise-stark-comparison-larry-turner-jrdsc/). In the long-run, what macroeconomic and microeconomic advantage, if any, do countries like China hope to obtain by this precious metal hording? Likewise, what advantage would North and South American countries obtain by ramping up their exploration success rate and mining production rate to level comparable to that of China?
Thanks for chiming in!
My 2ct? I think that trade settlement is partially already happening between the US & China. Especially on the rare-earths angle. Case in point: F35 won't be delivered with radars for years to come. (which would need rare earths).
And from: https://no01.substack.com/p/everything-everywhere-all-at-once
""The US is apparently net-settling its trade deficit with China in gold - if that data holds up. In three of the last four months it seems that gold is flowing East. No Bretton Woods conference. No announcement. Just two countries quietly deciding that when the paper gets complicated, the metal clears the table. That's how monetary systems actually change - not by proclamation but by practice, one bilateral settlement at a time...""
I strongly believe we're living through a monumental change in settlement systems right now, and there's a few things that can insulate you: food, manufacturing, gold, knowledge. In about that order.
Too bad in the US we have GMOs, everything's been shipped to China, Fort Knox is likely empty and student literacy and numeracy is abysmal.
I don't know, but I suspect viewing the "monumental change in settlement systems" as the two countries tacitly and quietly agreeing that paper is complicated might be too Western-centric. It could just be that China is just pulling in its economic arms and legs out of harms' way while the West economically and uselessly thrashes about and starts to drown in cold and deep water, all the while threatening to drag bystanders (byswimmers?) down with it.
I'd have ordered it: basic natural resources (including food, health, knowledge, and experience), derivative agriculture/manufacturing (including mining), and then that pet metal, gold.
As to China's high rate of endogenous gold production -- that would seem to be inflationary (dilutive) in the long run. Ditto from the West if it eventually got up to Eastern/Russian exploration efficiencies.
Food - the ultimate F word