# Gold backing (gold coverage)

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- Post ID: 593108
- Modified: 2023-07-25T21:00:20+00:00
- Language: en

## Definition

In older literature, the ratio of the central bank's gold holdings to currency in circulation. - Today, it usually refers to the share of gold in currency reserves, i.e. not in currency in circulation. In 2007, Germany held almost seventy percent of its currency reserves in gold, France sixty percent; the major holders of currency reserves China and Russia less than three percent. - Until around 2003, a central bank's gold reserves were widely regarded as "dead stock" (barren capital). This is because reserves in USD or EUR, for example, are held in interest-bearing government securities from the currency areas in question and yield interest. From then on, a rethinking began. Asian central banks in particular are trying to increase their currency reserves with the precious metal, which is by nature scarce and stable in value, especially because it is immune to inflation and exchange rate fluctuations. To this end, it became apparent at the latest from the Greek crisis in 2010 that government bonds denominated in EUR can harbor high losses. - See BankingTheory, CurrencyTheory, money, hard, money, private, gold bug, gold sacrifice, gold reserve, German. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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