Last year 22 central banks, situated largely to the east of Germany, bought the largest amount of gold since 1967, the year the London Gold Pool collapsed. The gold repatriations by many European countries of the last few years are another sign that we are reaching the end of four decades of monetary calm.
This could bring about the largest monetary changes since the closing of the gold window by U.S. President Richard Nixon in 1971.
The United States wants its fiat dollar system to prevail for as long as possible. It has every interest in preventing a “rush out of dollars toward gold,” as happened in the 1970s. Since then bankers have been trying to exercise control over the precious metal’s price.
Beijing wants to increase its gold reserves in the shortest time possible to at least 8,000 tonnes. This would put China on par, in terms of its gold-to-GDP ratio, with the U.S. and European Union. It would open the way, should the need arise, for a possible joint US-EU-China gold revaluation to support the financial system.