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Gold Reserve Gap: US 8133T vs Russia 2350T
Gold, since ancient times, has been a symbol of wealth and power.
Whether it is the treasury of ancient dynasties or the strategic reserves of modern nations, the important position of gold in national economic and financial security has never wavered.
In today's globalized world, gold is not only a symbol of personal wealth but also an important component of national strategic resources.
Therefore, the amount of gold reserves is directly related to a country's say in the global financial system and economic stability.
The total amount of gold reserves in China, the United States, and Russia is particularly eye-catching to the world.
Please follow the author to see what these mountains of gold mean behind them?
· Why is gold so important?
Marx once described in his economic manuscripts:
"Gold and silver are not money by nature, but money is gold and silver by nature."
It is precisely because of the special properties of gold that it fits so well with the nature of money.Gold is the only non-liability monetary asset globally, possessing a unique ability to transcend nations, languages, races, religions, and cultures, which makes it a universally recognized monetary asset. It serves as the last line of defense for national economic security and plays a crucial role. Gold reserves not only grant nations more autonomy in times of crisis but are also directly related to the country's economic security. The 1997 Asian financial crisis is a typical example. At that time, South Korea was in a severe financial crisis, and the International Monetary Fund (IMF) claimed it could provide assistance, but on the condition that South Korea had to sell domestic enterprises at low prices. To maintain economic independence, the South Korean government had to call on the public to donate gold to repay foreign debts, ultimately preserving the country's key enterprises. In the course of our country's development, gold has always played an irreplaceable and important role. During the revolutionary war period, gold provided strong support for the economic development of the liberated areas and the victory of the revolution. During the three years of natural disasters, the country used gold reserves to exchange for production and living materials to cope with the impact of the disasters. In the early stages of reform and opening up, gold played a historic role in increasing the country's foreign exchange reserves and supporting national economic and social development.After 1989, in the face of economic blockades from the West, our country's People's Bank conducted gold-for-foreign-exchange transactions through the international gold market to ensure the supply of foreign exchange needed for economic development.
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Today, gold still plays an important role in risk resistance and financial security, in stabilizing the national economy, and in regulating the market economy.
Although the international situation is generally peaceful, conflicts of various sizes around the world have been ongoing. Once faced with blockades or wars, and after the instability of national currencies, gold may become the only reliable means of payment.
· United States: Gold Hegemon
Due to making a fortune from the war and victory in World War II, Americans were simply swimming in wealth.
The total amount of gold in the United States has long been stable at the top position globally.
According to data from the World Gold Council, the United States currently has 8,133 tons of gold reserves, accounting for more than 25% of the world's official gold reserves.
This huge amount of gold reserves provides solid support for the global dominance of the US dollar.
It is no coincidence that the United States has such a large total amount of gold.
After World War II, the United States became the leader of the global economy. The establishment of the Bretton Woods system further established a global financial order where the US dollar was pegged to gold.At that time, the US dollar was directly pegged to gold, with 1 ounce of gold equaling 35 US dollars.
Although the Bretton Woods system collapsed in 1971 due to the "Nixon Shock," and the US dollar decoupled from gold, the status of the US dollar as the global reserve currency remains solid, which is inseparable from the United States' vast gold reserves.
Most of these gold reserves are stored in Fort Knox, Kentucky, USA.
Even in the face of global economic turmoil, the United States' gold reserves remain stable, providing strong protection for the international currency status of the US dollar.
• Russia: The Renaissance of Gold
Russia's total gold reserves have been increasing year by year over the past few decades, exceeding 2,350 tons, ranking fifth in the world.
The Russian economy is highly dependent on oil and natural gas, and the volatility of the international energy market makes the Russian economy extremely unstable.
To enhance economic risk resistance, the Russian government has chosen to increase its holdings of gold, a relatively stable asset, as a hedging tool.
The value preservation attribute of gold has made its importance in the international market continue to rise, especially in the face of sanctions and financial instability, gold has become an important economic "safety net" for Russia.
Russia's increase in gold holdings is also an important part of its de-dollarization strategy.In recent years, Russia has gradually reduced its dependence on the US dollar and increased the proportion of international settlements conducted in euros, renminbi, and its own currency, the ruble.
Gold, as an internationally recognized hard currency, is an indispensable strategic resource in Russia's process of de-dollarization.
Russia's gold reserves may also be related to the future vision of the BRICS countries launching a single currency system.
Once the BRICS countries can establish their own currency and financial systems, gold is extremely likely to become the market economic foundation for these trade exchanges.
·Our country: The Golden Age
In comparison, although our country's gold reserves are not as large as those of the United States and Russia, they have also increased significantly in recent years.
According to data from our country's central bank, as of last year, our country's official gold reserves totaled 71.87 million ounces, ranking sixth in the world.
The growth of our country's gold reserves has gone through a relatively steady process, especially after 2015, when our government began to significantly increase its efforts to build up gold reserves.
As the world's second-largest economy, our country's need to enhance national economic security is becoming more urgent, therefore, increasing gold reserves has become an important means for our country to cope with international financial risks.
Although our country is one of the world's largest gold producers and consumers, its voice in the global financial system has not yet fully matched its economic size.Increasing gold reserves further can not only enhance China's position in the international financial system but also provide a more solid foundation for the internationalization of the renminbi.
It is worth noting that China's private gold reserves are also very substantial.
According to estimates by industry insiders, the total amount of gold reserves in China's private sector may be between 120,000 and 160,000 tons, a figure that even exceeds the official gold reserves of the United States.
These gold reserves are mainly in the form of gold jewelry and gold bars, scattered among thousands of households, and are a means of preserving value passed down from generation to generation in China.
The potential role of private gold reserves in the financial system should not be overlooked.
· "Gold Rush": A Result of Economic Turmoil
In recent years, countries around the world have increased their gold reserves, which is due to complex economic and geopolitical backgrounds.
Since the global financial crisis in 2008, world economic growth has been sluggish, and geopolitical risks have increased, leading countries to feel uneasy about the future economic situation.
Gold, as a safe-haven asset, has become an important choice for governments around the world.
According to data from the World Gold Council, the net purchase of gold by central banks worldwide in 2023 reached a 55-year high, exceeding 1,000 tons.This global "gold rush" reflects the uncertainty of countries about future economic conditions and their high concern for economic security. As a special strategic resource, the importance of gold in the global economy and politics is becoming increasingly prominent. Gold is not only an important part of national wealth but also an important means to enhance national economic security and international discourse. With the continuous change of the global economic pattern, the importance of gold reserves will further increase.
·Gold Strategy
With the advancement of the "Belt and Road" initiative and the acceleration of the internationalization of the renminbi, increasing gold reserves will provide strong support for our country to cope with international financial risks and enhance international discourse. By promoting the development of platforms such as the Shanghai Gold Exchange, our country can play a greater role in the global gold market. Gold reserves are not only a symbol of wealth but also the cornerstone of national economic security.
Against the backdrop of increasing global economic uncertainty, the value of gold as a "hard currency" will become more prominent, and the competition among countries in gold reserves will become more intense. It can be anticipated that in the future global economic game, gold will still be, and always be, an important chip that cannot be ignored.
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