Gold reserve (gold reserve; bullion reserve)

Unless otherwise defined, the stock of bullion gold held by a central bank as part of its monetary reserve. Its purpose is to be able to be used in emergencies. This is because gold is immediately marketable worldwide and can be exchanged for any other currency – and also commodity! – exchangeable. – Of course, it is hardly possible to determine exactly what percentage of a central bank’s currency reserves should be held in gold and what percentage in an internationally recognized reserve currency – today practically USD and EUR, to a lesser extent also CHF and, in addition, SDRs. However, the undisputed advantage of gold over foreign exchange reserves is that it is a tangible asset (real value), whereas the value (purchasing power) of any foreign currency depends in the broadest sense on a country’s policy. Gold is therefore by no means an outdated, backward remnant of dark times (“barbaric relict”), as is often read with erroneous reference to the national economist John Maynard Keynes [1883-1946]. – In spring 2010, Great Britain had 5.1 grams of gold per inhabitant, Germany 41.6 grams, France 37.4 grams, Switzerland 133.7 grams and China 0.8 grams. – Of course, the importance of gold reserves should not be overestimated. Let us assume that the Deutsche Bundesbank had sold its gold reserves at the current price in March 2010. The proceeds would then have been around EUR 82 billion. That would have been just enough to pay off about five percent of Germany’s national debt. – See banking theory, chrysocracy, currency theory, money, private, gold backing, gold bugs, gold bugs, gold reserves, German, store of value, Zettelbank.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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