Is Gold considered as investment or insurance?

[Luke]

If you bring USD into a department store or even shops, they can check it with machines or under the light. Try doing that with gold nuggets. The expertise of verifying gold I think has been long lost in common folks.

True, but what this Rotbart meant is, once the bullion's quality is certified, gold is accepted everywhere.
On the contrary, a verified $ banknote is not accepted everywhere.

In modern times gold is useful only in extreme dire straits or circumstances like war but the huge bid/ask spread is still there. Last I heard of people using gold as a currency is Vietnam war. Not even Iraq or Afghan war do I hear gold widely used as a currency but more as a "perceived" store of value.

True, as far as a widespread use of gold as a means of payment go.

Clearly precious metals cannot be used directly as a means of payment.
Imagine sending a gold panda to amazon in order to acquire new furniture...

Gold could be used as means of payment indirectly, e.g. through gold certificates, i.e. paper or electronical documents representing a title of ownership over a certain quantity of gold.
The problem here is these certificates can be falsified or hacked, the bars they should represent are not there or are encumbered etc.

That's where blockchain and gold backed blockchain currencies come into play.
Bet there is still the problem of Gresham's Law.
That's where blockchain projects like Kinesis come into play.

[Luke]

Last I heard of people using gold as a currency is Vietnam war. Not even Iraq or Afghan war do I hear gold widely used as a currency but more as a "perceived" store of value.

Gold was never widely used as a currency.
Clearly it is too much valuable to be used for everyday expenditures.
Traditionally silver has had that role.
Probably we should talk about precious metals instead of about gold.

That said, as far as I know, precious metals, as bullion, bars, or items (e.g. silverware) have been widely used (i.e. they worked as a currency) among the people during financial crises: in Russia's Jelzin era, Argentina's financial crisis in 2001/02 (e.g. during the banks holiday in Buenos Aires), in India last year when Modi removed major banknotes as legal tender, Venezuela and Syria today...

If they weren't enough widely used, it wasn't because they weren't accepted but because people didn't have enough.

How widely were precious metals used during the Asian financial crisis 1997?
I'm thinking about cities as well as countryside.
I don't know.

[specuvestor]

just to add that bartering is not the same as using gold as currency
https://www.bbc.com/news/world-latin-america-45246409

Anyways there's always articles like this and I recall even dealers took receipt of fool's gold back in 2011 but cant find it now:
https://www.kitco.com/news/2017-11-01/Fa...m-RCM.html

Physicals always have autheticity issue. Even Bre-X, Sino Forest or coal mines. Currency with denominations help solves these issues as reduces counterfeiting loss. Digital transfers reduces it further but the premise that these currencies have tangible backing like power to tax and sovereign assets should not be confused with 1s and 0s

[Luke]

Malaysia Proposes Common Asian Gold-Backed Currency

Today, the Malaysian Prime Minister Mahathir Mohamad took one large step in that direction when he proposed the launch of an Asian version of the euro: a common trading currency for East Asia that, unlike the euro, would be pegged to gold, describing the existing currency trading in the region as manipulative (perhaps in reference to China's currency setting framework).
According to the Malaysian PM, the proposed common currency could be used to settle imports and exports, but would not be used for domestic transactions.

“In the Far East, if you want to come together, we should start with a common trading currency, not to be used locally but for the purpose of settling of trade,” he said at the Nikkei Future of Asia conference in Tokyo. “The currency that we propose should be based on gold because gold is much more stable.”

https://www.zerohedge.com/news/2019-05-3...egged-gold


Russian Central Bank Eyes Gold-Backed Crypto

First there was Tether; a controversial dollar-backed cryptocurrency by crypto exchange firm, Bitfinex. Then came Petro, the industry’s first oil-backed crypto issued by the Venezuelan government last year. And now we might be about to see the first gold-backed cryptocurrency—by a central bank, no less. According to Russian news agency, TASS, Russia’s central bank, the Bank of Russia will consider issuing gold-backed cryptocurrencies - a rather strange move considering how cryptocurrencies are generally anathema to central banks.

But before crypto bugs can start doing a round of high fives, the head of the Bank of Russia, Elvira Nabiullina, has revealed that the cryptocurrencies are not meant for retail use but rather for conducting big mutual settlements for entities with global jurisdictions.

https://www.zerohedge.com/news/2019-05-2...ked-crypto


Unbacked Cryptos cannot be used by within institutional trade because of their volatility.
Stablecoins offer the same benefits of cryptos plus stability.
Gold-backed Stablecoins offer the possibility of using gold again to settle international balance of payments.

[specuvestor]

Dr M’s world seemed to have frozen at 20 years ago: from an ASEAN currency to MYR peg at 3.80 to National car to hostility towards SG and sultans, to water and crooked bridge causeway

The world has already moved on. He has not. SGD has already appreciated from 1.80 AFC crisis level when ringgit was pegged 3.80. Malaysia no longer the largest ASEAN passenger car market. SG and Malaysia already moved on with the rail issues. SG already more or less water self sufficient.

Or maybe Malaysia has stagnated.

[weijian]

Dr M’s world seemed to have frozen at 20 years ago: from an ASEAN currency to MYR peg at 3.80 to National car to hostility towards SG and sultans, to water and crooked bridge causeway

The world has already moved on. He has not. SGD has already appreciated from 1.80 AFC crisis level when ringgit was pegged 3.80. Malaysia no longer the largest ASEAN passenger car market. SG and Malaysia already moved on with the rail issues. SG already more or less water self sufficient.

Or maybe Malaysia has stagnated.

If Spore used back Goh as PM, probably you would have felt stagnation. Similarly so for Malaysia.

Most of Tun M's policies are expired, though not his attitude and his desire to make "Malaysia Great Again". Malaysia actually could probably do with more doses of pragmaticism (Singapore style) but maybe sometimes romanticism and pragmaticism are mostly mutually exclusive.

I see this as a policy long tail, a way of how the world actually works as you have always described. Najib and 1MDB in 2015, was the apex of the accumulation of the past 20years of excess since the late 1980s judiciary crisis.

[specuvestor]

Sorry for the OT but that's why LKY admired Deng XiaoPing. At almost 80 he could change his mind about what he had staked his life pursuing lifelong.

UMNO couldn't reform internally. To a certain extent it was inevitable but I am thankful that it was more or less bloodless. If Dr M won the election 4 years earlier I'm not even sure the coalition could last cause Anwar might not be that patient. If racial or political uncertainties erupt in Malaysia, I'm not sure Singapore can be isolated.

So Singapore had been quite blessed frankly, from SG hostile Sukarno to Suharto and SG hostile Dr M to Najib back to Dr M. To be politically incorrect, Najib had been net positive for Singapore.

[corydorus]

His comment on playing around the Powers need to be careful. We do not know when the table unto himself. While Malaysia may have nothing much to be spied on but there is always room to be held hostage when they don't listen.

.

[Temperament]

Recently, gold hitting 52 wks peak prices just in a matter of days.

What gives?

Anyone hear or read anything in themarket?

To sell now or wait?

[Luke]

Sice the beginning of 2016 gold has entered a bull market, so if you are in for the long run, why sell.
The physical market is tight, the only supply come from the paper side.
There are always more central banks entering the buying side. The last ones were Philippines and Serbia.
Russians and Chinese are sucking up everything available on the market.
Confidence in the $ and all major currencies is vanishing.
Swiss refineries are working 3 shifts a day, with orders backlogs.
A major actor is entering the physical game, on the 1st Juli.
Derivates should be converted into physical, or mines, that goes without saying