Comment by bitcartel | Hacker News Reader

Comment by bitcartel | Hacker News Reader

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> Gold is a piss poor investment.

Do you know something that the Chinese, Germans and Russians don't ?

"Central Banks Bought Most Gold in Nearly 50 Years"

http://www.cnbc.com/id/100458951

"The Russian central bank will continue to buy gold as it seeks to diversify its foreign reserves away from paper assets it views as risky"

http://www.reuters.com/article/2013/01/24/russia-cbank-idUSL...

"The startling news that Germany is repatriating its gold reserves from the United States and France has got precious metals speculators worried that this is the first major sign that trust between central banks across the globe could be deteriorating."

http://www.forbes.com/sites/robertlenzner/2013/01/19/the-ger...

"How Much Gold Does China Really Have?... China is the world’s leading gold producer and also the world’s leading gold importer. And surprisingly their official gold holdings haven’t risen an ounce in over three years."

http://www.moneymorning.com.au/20130211/how-much-gold-does-c...

Did you read your articles?

Germans are bringing gold back into their own country, as opposed to holding it in other exchanges. They have neither increased nor decreased their supply.

China and India are world-class consumers of gold for jewelry, as expected of the world's most populous countries with a rising middle class. Gold is also used in microelectronic components. Chinese Banks on the other hand, have not increased their holdings according to your link. IE: China is not investing into Gold. They're using it.

As for Russian and Iraqi Central Banks buying up Gold between 2012 and today... well... they've already lost 10% on their investment as Gold has dropped in value between last year and today. I mean, if you wanna follow the example of Russian and Iraqi banks, you're welcome to do so. But I don't think anyone considers them a paragon of the investing world.

Er, yes, I can read:

Why are Germany repatriating their gold? Why do they want it in their own hands? Why go through all that trouble instead of just selling? Why would they want to keep holding onto a "piss poor investment"?

Regarding China, the article's author believes that China has been accumulating gold. The last known official figure is from 2009 and since then imports continue to rise, which in the authors opinion, have been destined for the Central Bank.

As for Russia, they have been accumulating gold for a few years now, and it's right there in the article. "It owned 400 tonnes of gold at end of 2006... At the end of last year, the central bank held nearly 950 tonnes of gold".

If you want to dismiss gold as a "piss poor investment" that's fine, but not everyone shares your view or your investment objectives.

Fair enough :-)

I still disagree with you of course, but that is what the free market is for. Good luck with your investments.

>Why are Germany repatriating their gold? Why do they want it in their own hands?

Kraut here. Quite easy to explain, really.

The tabloids and some politicians made up a story along the lines that none of our politicians or central bankers has ever had access to the gold stash in the US and that probably this stash no longer exists.

So as to calm down people, the German central bank has declared they will repatriate 700 tons of gold (out of ~2000t stored in the US, UK, and France).

Central banks and average people have vastly different goals. Also, large investment banks don't seem to keep their immense wealth in gold.

Large investment banks don't really exist anymore :-)

http://www.guardian.co.uk/business/2008/sep/22/wallstreet.mo...

"Morgan Stanley and Goldman Sachs, the last two investment banks left standing, will become traditional bank holding companies, marking the end of an era for Wall Street.

The Federal Reserve's surprise announcement, which came at 2.30am London time, places the banks under the supervision the bank regulators and gives them easier access to credit to help them ride out the financial crisis."

This point is utterly irrelevant to jonkee's point. For all intents and purposes MS and GS are large investment banks.

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