How important is gold to a country?

Since gold does not entail credit or counterparty risks, it serves as a source of trust in a country and in all economic environments, making it one of the most important reserve assets in the world, along with government bonds. The minting of coins or the manufacture of metallic money marked the advent of the notion of standardized economic value. Metal coins or raw materials were manufactured all over the world around 700 BC. C.

Previous economies were based on bartering and trade. The coins allowed merchants to assign a standardized value to the merchandise they bought and sold. Gold alloy coins were minted and distributed for the first time around 550 BC. C.

by King Croesus of Lydia, in a region that is now part of modern Turkey. These coins circulated in neighboring countries. Gold's reputation for preserving its value brought it to the top of the list as the metal of choice for minting coins across Europe. Simultaneously, other economies grew around silver.

As the pound fell against gold, speculators began to focus on the United States Federal Gold Reserve, which refused to abandon the gold standard system. The United States took new steps to recover from the global crisis. One of the measures consisted of raising interest rates below 20% to put an end to speculation against the dollar. .

Finally, the Federal Reserve and the government realized that they were not on the right track and that they had to change something. They realized that gold was the tipping point of fiscal policy and that nothing can be changed without a review of the system. European countries maintain a structured formula for maintaining high gold reserves from their total reserves (commodities, currencies, etc.). Since the gold standard system governs the global economy, a country must maintain its gold reserves in order to control its currency and economy.

On the other side of the coin, it seems that some emerging economies have different points of view. Unlike the rest of Europe, the United Kingdom has a different gold policy. On May 7, 1999, the United Kingdom decided to sell a large part of its gold reserve in a short period of time to replace it with a basket of currencies, including the new currency (the euro). The United Kingdom's gold reserves fell from 590 tons in 1999 to 310 tons today, representing only 8.6% of the UK's reserves.

The national currency could be exchanged not only for gold but also for the national currencies of other countries; national coins and paper circulated along with gold coins. The story was about a villain who wanted to contaminate the American gold reserve at Fort Knox, his idea was to save gold ingots that would eventually multiply its price. The most common way to invest in physical gold is through the SPDR Gold Shares (GLD) exchange-traded fund (ETF), which simply holds gold. In addition to meeting the needs of a gold mine, these improvements to roads, water and electricity supplies are a long-term benefit to businesses and communities in the area, as they survive the years of production from a gold mine.

This research focuses on the percentage of gold compared to the total reserve of countries, which will reflect the political and economic perspective of policy makers in any country. Countries of common wealth are some of the richest countries in the field of gold mining and own most of the gold production together. Before we jump on the gold bandwagon, let's first stop the enthusiasm about gold and, first, let's examine some of the reasons why investing in gold has some fundamental problems. The gold mining industry seems like a very volatile way of maintaining what is supposedly a non-volatile investment; likewise, ETFs that focus on gold mining share the unpredictability that accompanies that industry.

The report analyzes the social and economic impacts of gold mining, analyzes direct and indirect impacts, and covers a substantial part of budgeted business gold production (and extends the reach to production in non-member countries). Private traders bailed out banks with their personal stores, and the government imposed regulations requiring banks to exchange gold at a fixed and determined rate, giving rise to the gold standard. During World War I, all countries suspended the gold standard system, but the United States maintained the gold standard throughout the war. The goldsmiths realized that it was rare for a customer to ask for their gold to be returned; few people exchanged real gold, which favored the portability of receipts.

The technical development of a device called a touchstone allowed people to quickly assess the amount of gold within a particular alloy and accurately assign a value to the metal based on its percentage composition of gold. Previously, those with large gold reserves stored it in government mints until King Charles I once seized all the private gold stored in the Royal Mint, weakening consumer confidence and bringing customers into the arms of private goldsmithery banks. .