Gold overtakes U.S. Treasuries as the largest foreign reserve asset
economictimes.indiatimes.com263 points by lxm 2 days ago
263 points by lxm 2 days ago
America was in practice running an empire that collected tribute from the rest of planet earth in exchange for entries in a database denominated in a currency they controlled and that was accepted everywhere. Really the only way it could go wrong is putting it under the control of someone who doesn't understand the kayfabe...
> someone too stupid to understand
That's only true if he's actually "your guy". There's an alternative where it's not stupidity that I think more people should be mulling over.
While we're at it, when did central banks start to buy lots of gold and under which POTUS? Could it have something to do with the freezing of hundreds of billions of some sovereign assets?
There is something awfully bad happening to the internet, including Hacker News.
It seems like rage-baiting, polarizing titles and vibe based comments are being upvoted, with no interest in the facts. For example, in this case:
1. The growth of the gold reserve in comparison to US Treasuries have very little to do with growth in gold acquisition, and has everything to do with gold more than doubling in price in a year.
2. To make it even worse, gold has since fluctuated in value, and treasuries overtook gold momentarily just a week ago. These price fluctuations has nothing to do with geopolitics.
3. Central bank buying of gold has been trending down in the last year, down 21% from 2024. So far in 2026 it's been going even lower.
4. Gold owned by central banks was higher than US treasuries in the 90s (this is mentioned in the article at least).
This is a little meta - but the thing that bothers me is that this low quality discussion like in this thread is spreading everywhere with the same mechanism - bring politics and polarization into every place, no matter how tangentially related it is.
Side stepping a little, but the Twitter and Reddit exoduses brought in a lot of people with established culture and communication dynamics at discrete periods. I considered writing an extension that collapses comments of accounts based on keywords and creation date, but ultimately decided that was regressive.
I think it's important to recognize how much the world has changed in a short period of time. HN was created when SV was unique, a large fraction of the globe was not on the internet, and web tech was new and novel. Everyone was still figuring out how to handle outreach and networking (I was positive it was a scam when the Omiyadar Network cold contacted me - "who does that?"). Today, I meet kids who made their first commits at the same age I was just trying to find friends in town who had computers. Now, our advanced is their common, and they're growing up primed for engagement-forward networking and self-promotion.
HN isn't a calcified relic of the era when it was created, it's a product of its people. We're seeing the new generations connecting from all over the world at a time when the foundational HNers are fading away, and sometimes when there's friction with my expectations of civility and etiquette in discourse and it feels like the noise is drowning out the signal and I yearn for the smaller, quieter days, I take that as my queue that I need to step back and appreciate that this is their time, too.
I think there are less experts on HN than years ago or a decade ago. And the culture of HN is getting slightly changing to a more Reddit culture every year.
It’s too bad because it’s the only place I know where you have experts in tech but also in other industries. And where I got very interesting discussions.
People have been claiming HN is turning into Reddit for over a decade to the point it's in the guidelines to not make the comparison
There's unfortunately someone who is posting some HN articles in a hackernews subreddit. I think that's contributed to the rise of Mr. Hot Take One-Liner Mic Drop, that posts something with 20 one liner replies, always at the top. If that continues happening I'm out.
One interesting factoid, since I can remember on HN, if you ever likened a conversation to Reddit they'd downvote you to grey. There are two ways to read that - Reddit is fine, don't criticize it; Reddit is embarrassing, don't diminish the conversation by comparing us to it.
Thanks appreciate the broader context in this post. As to your meta comment, besides bots, I think a lot of people are facing a great deal of pain and fear. They're emotional and even in hn a critical mass has switched to reading and writing with their gut. Good vibe project, analyse the level of emotionality in comments over time, I'd bet it's gone vertical in the past few months.
I agree with your "sensationalism is bad" take; especially as meaningful, non-incendiary comments now often get quickly downvoted for viewpoint, not tone (IMO downvoting should cost 0.1-0.3 karma). But not with "nothing to see in CB gold holdings fluctuations" view:
R1. But central bank gold holdings are rising organically, and partially at the expense of US treasuries. CB gold holdings have been dropping for 35 years, until about 2015. The price rise of gold from 2005 to 2015 did not reverse this trend. From 2015 to 2019 gold price did not rise, but reported holdings did. The recent doubling of the gold price muddies things a little, but the trend is clear.
R3. Reported gold purchases have trended down in 2025 and 2026, probably due to price doubling. But they are still positive. Emerging markets did not sell into this strength to build up more liquid holdings (UST) as more effective tools to support their economies against future malaise. Even "trending down" part is muddy, too, because some countries CB do not report it. China, an elephant in the room, started better obfuscating its holdings, including gold, since COVID.
R4. Yes. Gold owned by CB strognly trended down since 1980. That trend stopped in 2005 and reversed somewhere between 2005 and 2015. And likely accelerated in the last few years.
As a side note, I personally see USTs losing dominance as a reserve asset as a good thing. USG needs some checks on its spending, and world being willing to buy long dated treasuries at below inflation rates incentivizes the "we do not need to solve real problems, we can just print more money" mindset. My 2c.
Well, having tracked soft-science experts for 30 years, I have to say they're wrong over 50% of the time. Moreso, if it's coming from media that's owned by the same country that is causing evil.
https://www.reuters.com/business/finance/russias-central-ban...
Since the advent of the internet, and in fact conversation any in format, people have not overly cared about facts. This isn't a new phenomenon
>everything to do with gold more than doubling in price in a year.
Gold's price doesn't change, it's 42 2/9 US Dollar per fine troy ounce[1], and has been since 1973.
The problem is that this exchange rate hasn't been enforced, or adjusted since then. This allows the spot price to set the effective price of the dollar in a reciprocal arraignment.
Since, the "Gold Window" was closed by executive order, I posit that, In theory, Donald Trump could get a bunch of conspirators together, with 10.4 Billion in cash (the "Book Value" of the US Gold Reserves), and direct the Secretary of the Treasury to re-open the gold window, in private, and drain the US reserves, personally.
Edit: Nope... the law changed, thank goodness.
If the US somehow re-anchored the Dollar to Gold, the deflationary collapse would crush the economy everywhere, instantly, as all dollars outstanding would increase in real value by a factor of >100, and all debts would crush most people, companies, and economies.
So, realistically, if we wanted to re-anchor the dollar, the new value would have to be greater than the current spot price. To fully back all dollars outstanding, it would be somewhere between 50,000 and 150,000 US Dollars per fine ounce.
I had previously expected this to happen a generation from now, but thanks to the complete collapse of institutional memory, and the current administration, I now expect it to happen before the end of the next administration.
[1] https://www.federalreserve.gov/faqs/does-the-federal-reserve...
Everything is politics. Which makes people who want to avoid it look delusional.
As for polarization that's been the modus operandi in my country for at least 500 years. Everyone hates everyone but the alternative was the French, English or Spanish so what can you do? Turns out you actually really don't need to love your neighbour.
> Everything is politics.
This is mentioned often, but is also such a broad generalization that it is not constructive in any meaningful way. If everything is politics, then it can be eliminated from both sides of the equation. Focus on real and immediate problems at hand and providing concrete solutions need not have "politics" label slapped onto it by default, esp. where the ideological infighting this attracts complicates having open and frank discussions based on the facts. "Politics" has become a weaponised word often used to derail good initiatives, and with great success. The mindset that everything is politics may be contributor to that.
This is just HN. We're explicitly not productive or constructive. We're not solving the world's problems. We're just shooting the shit. This is a forum for wasting time. I guess it wouldn't be HN without the delusions of self-importance.
> Everything is politics.
Everything you want to be politics is politics. Caring for other people shouldn't be politics. Being a decent human being shouldn't be politics. There are plenty of things that aren't politics unless you decide you want to turn them into politics.
The issue is when you get down to the edge cases, you get into politics again.
Is ‘caring’ (what does that mean exactly?) for someone on death row good or bad? You’ll likely find splits in answers along ‘political’ lines, especially depending on things like the nature of the crime, who the victim was, etc.
Is ‘caring’ (again, in what way?) for someone in Palestine good or bad? Or worth how much money to do? Similar split. How about Iran?
What about someone in the inner cities? Who doesn’t work?
Etc.
Hand wavy general statements are easy to have, but when it gets down to actual implementation is when real groups of people start to have very different concrete opinions on how it should be done.
You’ll also find lots of shaming among the group and against ‘outsiders’ trying to enforce idealogy. And if you think that part doesn’t happen, just read your own comment - it’s a mild form of that!
That is politics.
> ‘caring’ (what does that mean exactly?)
caring: (adjective) displaying kindness and concern for others.
If you look at this definition of caring and find a way to turn it into a politics issue that's your problem, not mine.
If you scale a problem up, then yes, you get into politics. If you scale it all the way down, politics disappear. If you see your next-door neighbor struggling with something and you can help, you should. That's not politics. That's called being a decent human being.
> Hand wavy general statements are easy to have
I agree. In fact "everything is politics" is a stupid, hand wavy statement.
> You’ll also find lots of shaming among the group and against ‘outsiders’ trying to enforce idealogy. And if you think that part doesn’t happen, just read your own comment - it’s a mild form of that!
Disagreement != enforcing ideology, at least in my world. And if you don't see it that way, then I guess you're guilty of doing the precise thing you're commenting on.
Under that definition, ‘Caring’ can mean anything from hopes and prayers to major economic sacrifices.
With that struggling neighbor, are you talking about helping them take out their trash at night when they’re tired - or paying unemployment benefits for years?
Notably, in my experience, the ones who talk the most usually just keep talking - and aren’t the ones on the hook for actually doing the hard caregiving when things are really tough. But hey, maybe you’re different?
One big difference we have here is you’re again talking hand waving generalities, and I’m talking concrete economic behaviors and policy. It’s easy to say ‘if you can help you should’, it’s harder when it’s ’where is the line for “can” and “should” exactly when we’re talking millions of people and trillions of dollars’, and people you’ll likely never meet in your life - and taxes that definitely come out of your paycheck each month.
Move the line too much one way, and it incentivizes being a victim. Move it too much the other way, and it crushes people with legitimate problems. Both are real issues.
One less conspiratorial but more pernicious angle, is that attacking things that are good but complex is a great strategy for troll politicians who don't care about the success of their country but just like the attention.
See Brexit, and free trade in general.
It's a good way to get "the establishment" to gang up on you and defend something complicated while you present simple but wrong alternatives and promise the world.
I also think he's up for sale (as are all the other similar politicians) to a multitude of buyers, foreign and domestic.
For Brexit in particular, it seems clear to me that EU politicians, but the UK ones in particular, used EU as a scapegoat for unpopular economic policy that they themselves actually want, but can't justify effectively to their constituents. "We can't help it, it's an EU requirement" when leaving out that in the EU, their guys totally supported it.
That was bound to backfire at some point or another.
I think you're right that politicians prefer not to defend complicated (and possibly good) policy to the public. But if they choose easy ways out to avoid it (and they do!) then they're to blame too when it collapses. To blame the public for not blindly trusting them won't do.
The public is almost fully to blame, and gets the government it deserves. I only hedge a little because education is in control of the state, so to some degree people don't choose whether to be educated on the relevant matters.
It may be familiarity breeding contempt but I find members of the British public in particular very myopic in obtaining benefits for 'their group'. There's very little interest in society as a whole.
Politicians simply bend in order not to upset any of the key voting blocs. But you understand that's a selection bias: you wouldn't exist as a successful politician if you didn't do this. All those who go another path are doomed to obscurity.
> The public is almost fully to blame, and gets the government it deserves.
Which has been a popular argument against democracy since at least Plato: just look at the average voter/person and their intelligence, understanding of the world, and their character.
> The public is almost fully to blame, and gets the government it deserves.
I'd frame this another way -- the public are largely responsible, but we put all the blame on politicians/government. we vote for these people while we all know they're all talking complete and utter nonsense just to get past the job interview. it is the game. i wish it wasn't. i wish i could stand in the house of commons during PMQs and point out every BS line every single one of them says. stand up during question time and shout at all the idiots on the panel, disproving every single bullshit line they've fed the audience with stats and analysis and data [0]. but then we'd probably end up everyone in the country showing up to PMQs/question time shouting over each other all at the same time... which wouldn't really work lol.
the system is not perfect, but it's what we've got.
> I only hedge a little because education is in control of the state, so to some degree people don't choose whether to be educated on the relevant matters.
> It may be familiarity breeding contempt but I find members of the British public in particular very myopic in obtaining benefits for 'their group'. There's very little interest in society as a whole.
yeah, like, i'm kind of lucky that i don't have children or any other dependants and i went to posh schools, got a decent academic education [1]. i can afford to sit around, pontificate and moralise about what the large scale right or wrong way of doing things should be. i earn enough and don't have kids. hell, i'd be happy if they increased the rate of tax in the top bands. more money to spend on public services for everyone else who actually needs it. seriously, take my spare disposable income! i'm only gonna spend it on expensive food and cigarettes that's gonna make me overweight and have lung cancer and become a drain on the nhs anyway!
my mate with three kids doesn't have the time for that. she just wants the school to give her daughter the help she needs and has to fight through a bunch of bureaucracy to get there. bureaucracy which exists because the system is under strain because lots of people are asking for the same resources and they've got to figure out some way of apportioning out the resources. same with my mate who is a single parent to a son with pretty hefty ADHD. it's no wonder they fall into the "my group first" attitude and/or rhetoric with, for example, immigration. they're constantly told there's all this money is being spent elsewhere on "some other people" and then they look at their kid's school struggling with one support worker for hundreds of kids and it's like ... well, wtf. same thing with income taxes etc. "we need money for our kids, why on earth is my tax money being spent on X, Y, Z" etc.
to be clear: i don't agree with the political views of my friend, and i don't really care to debate the politics either. i'm responding to the "myopic" comment from my own perspective, having previously noticed the interesting differences between myself and my friends. they're really lovely people! really nice and kind and loving folks. but they have a selfish/fear-based-protectionist side to them, like all humans do.
that last bit is the important bit for me. fear leads selfish behaviour. people are worried, the "system" is unstable and constantly under strain. and that makes them act in their own selfish interests because they're having to jostle for position within the "system" :shrug:
> Politicians simply bend in order not to upset any of the key voting blocs. But you understand that's a selection bias: you wouldn't exist as a successful politician if you didn't do this. All those who go another path are doomed to obscurity.
this has always been the critical problem from where i sit. like, we're forced to vote for people who, ultimately, may only be in the job for a maximum of 5 years total. we don't get to vote on the next 30 years cos the next lot could just undo it all. just look at upcoming negotiations with the EU apparently might involve us moving back towards the single market again, which was the whole "once in a generation" brexit vote thing. turns out it's not quite so "once in a generation" [2]
the trouble for me is that the commonly implemented "long term" model for governance tends to be stuff like authoritarianism, dictatorship etc. ... so...
--
i wrote way more for this than i thought i would lol
[0]: yeah! let's properly hold them to account! i can finally use my autistic powers of calling bullshit for the benefit of all! instead of getting into trouble with my boss at work. again. o_o
[1]: the non-academic parts were really damaging though. expensive doesn't always mean good. highly rated academically doesn't always mean good.
[1]: thankfully lol
As a side note if you did just get fat and smoke you wouldn't be a drain on the NHS because being fat and smoking disqualifies you from many procedures and you are likely to die right around retirement age, after you paid most of your lifetime taxes but before you start consuming the very expensive age-related healthcare.
Ironically it is the unhealthy that are overpaying and the very healthy who are underpaying because age related care is such a huge proportion of lifetime medical costs, and that is still before adding in potential sin taxes paid.
The alternative is everything falling apart at home and our manufacturing industries declining dramatically. Maybe the "unpopular economic policy" wasn't such a bad idea after all.
The people that voted for Brexit aren't affected by any of that.
In fact, they're so protected they'd probably prefer a recession.
"For every complex problem there is an answer that is clear, simple, and wrong."
The issue is that the stupider the politician, the more likely they are unable to understand why their clear, simple answer to the ills of the world is also wrong.
Brexit, whatever is happening in the US, is caused by narcissism (a common trait among politicians) paired with a great deal of stupidity and ineptitude, not only among politicians, but among the populace as well.
The fact that he has done countless things that are harmful to the US and not a single thing that is in the country's best interests tells me all I need to know. Either he's aligned with an enemy or he just hates the country and wants to destroy it.
Or he and his associates can make a lot of money out of crashing the economy and buying up assets for pennies.
Never attribute to malice that which is adequately explained by greed.
Yeah I think the most obvious explanation is looting and ego (to explain the ballroom and putting his name everywhere). I also think there's an awful lot of foreign influence around him and his family and friends before and during his term(s). I mean if I'm a foreign actor seeing your leader's keen interest in looting, I'll probably make him an offer or two...
I think this is denialism of the profit that the USA extracts with its crimes.
The most recent example include the profits from Venezuelan oil:
https://www.bbc.co.uk/news/articles/ckgn7p7g79wo
https://venezuelanalysis.com/news/trump-administration-manda...
That money is held in a US treasury account. In February the estimated price from the first 50 M barrels was $2.8bn... with the USA+Israel bombing of Iran, the price of course would have increased since.
> It is not clear what portion of the revenues from the sale - which analysts expect to raise about $2.8bn (£2.1bn) - would be shared with Venezuela.
But let's assume that the USA is going to retain "only" 5% of it: that's still 140 million $ of money flowing in, in perpetuity.
Not to mention that having control of the whole 2.8 billion $ also buys further room for loan and deals made on the USA's preferred currency and preferred terms... Or the expropriation of CITGO.
Of course, that money flowing in will be mostly in the pocket of Trump itself, of the billionaires surrounding him, of the military industrial complex (you have to replenish the weapons stockpiles, after all) and all of the federal contractors (that includes most of the FAANG!)... Lots of people in the USA "labor aristocracy" are going to see material benefit from it.
Ultimately, there's still going to be lots of poor people in the USA who won't be able to afford insulin, and there's going to be lots of resentment abroad (not only in Venezuela)... And one could split hair that Maduro's kidnapping is in the USA's interest, but not in its "best interest" (or similarly trying to argue a no-true-scotman for the definition of "USA's interest")
Not to mention, but it's not only Trump's: it's everyone who he surrounds himself with: JD Vance, Pam Bondi (until a few days ago?), Pete Hegseth, the military generals that didn't get kicked out by Hegseth, etc.
They're all complicit, and they're all going along with him.
And of course, if the Democrats will return to power in the next few elections, I don't expect them to relinquish the leverage and resources that Trump got them, just like Obama and Biden didn't pull out of Afghanistan for several years.
Of course, we saw with AIPAC and JStreet that US lobbying is seeing tons of money from abroad: but those are two different faces of the same medal: the oligarchs and the bourgeoisie have common interests across different countries, and the USA is definitely influencing politicians abroad as much, if not more, than moneyed interests abroad are influencing politicians in the USA.
The problem is not only Trump
> That money is held in a US treasury account. In February the estimated price from the first 50 M barrels was $2.8bn... with the USA+Israel bombing of Iran, the price of course would have increased since.
That’s chicken feed compared to the amounts that have been wiped off the stock markets.
> that's still 140 million $ of money flowing in, in perpetuity.
Oh hey, that's roughly enough to cover for Trump's new renovation plans!
I disagree with probably the majority of Trump's main policy ideas, but I think a strong case can be made that his immigration policies are in the country's best interests. Not all of them, but as a whole.
Immigration in general is good for a country, and relatively uncontrolled immigration is one of the reasons for America's prior economic strength.
Even if you disagree, Trump's policies have not been effective at anything, apart from creating headlines.
These same headlines have secondary negative effects for the US, like hurting international tourism.
Why do you think that?
Illegal immigration brings masses of people from more corrupt, disordered, and perhaps lower average intelligence societies into the US in conditions that make it hard for even the ones who are capable of assimilation to assimilate. It also constitutes a massive flouting of the law for the benefit of business, which sets a bad precedent and lowers public trust in institutions. It also contributes to rising racial tensions that encourage the growth of ethnic tribalism and weaken trust in liberalism.
If you really want to get rid of illegal immigrants, you don't need ICE doing sweeps.
Just make them unemployable. Setup an effective employment eligibility system, and require that employers verify the workers in the system before any payment over $100. Collect biometrics from workers and verify against IRS records. Employers that flout this get fines of 10x wages paid, up to N% of revenue, and maybe jailtime for owners and managers that knowingly violate.
What we have in the U.S. is a bunch of people and politicians loudly decrying illegal immigration and illegal employment, but enjoying the fruits of that illegal employment while paying a fraction of what legal workers would have to be paid.
There's huge appetite for a police state against the little guy, and no appetite for that same police state against business owners and managers.
There's a better way than that. The way the US tax system actually works is incredibly misleading:
1) We pretend to have an income tax but then make it work like a consumption tax in practice. Ordinary people put earnings in excess of spending in a 401k and defer the tax until they want to spend the money. Rich people defer capital gains indefinitely until they want to spend the money. It's an income tax on paper but a consumption tax in practice, and doing it that way is much more complicated than just using a consumption tax.
2) We pretend to have a progressive income tax, but then impose benefits phase outs that fully cancel out the difference in marginal rates between the poor and the rich. Convert the benefits to cash and eliminate the phase outs and you get something which is equally if not more progressive, significantly more efficient and dramatically less complicated.
So, you can throw all of that out and replace it with a flat rate consumption tax and a UBI and it would be as close to a Pareto optimal improvement as anything in politics ever is.
Which also makes a huge amount of headway against the illegal immigration problem, because another disadvantage of pretending to have an income tax is that it effectively subsidizes anyone paying people under the table since then they're not paying the tax. Whereas if people working under the table still have to pay the consumption tax on everything they buy, and they also don't receive the UBI because they're not lawful residents, they'd be at a disadvantage relative to ordinary citizens, instead of the existing system where breaking the rules makes you better off.
The tax code is inefficient on purpose. A simple uniform system is politically infeasible, due to the fact our political system relies on pretending to give special favors to every tailored interest group individually (making the tax code even bigger every time).
We arent at a loss of what to change to make it simpler/optimal. We're at a loss at how to make anyone proposing that not lose the election when everyone else is telling each group they'll lose their special carveous and how about I sweeten the deal some more.