I think the analysis there is solid though, it seems that central banks are indeed starting to hoard gold because trust in the dollar and US bonds is starting to collapse.
gold ownership verifiable by blockchain held in vaults? cmon.
bonds have entered back to nothing ever happens territory + why exactly gold is needed aside from central bankers porky interests? holding too much in reserves is old timey behavior, no one gives a shit you hoard reserves (see russia).
it’s one of those i’ll believe it when i see first central bank selling gold to settle. right now they are just holding down their own currency for exports and porkies profit.
Bonds absolutely have not entered nothing ever happens territory. It’s pretty obvious that US bonds cannot act as a store of value in the long term. The faith in the dollar outside the west is rapidly collapsing, meanwhile western aligned countries like Japan are are starting to see disastrous consequences. https://franknez.com/worlds-largest-pension-fund-now-loses-61bn-as-dollar-falls/
The idea is not to sell gold to settle, but to have a currency backed by a physical commodity. I very much agree with the analysis here https://youtu.be/SV-jpJqDX7c
no, it’s the idea of goldbugs that some currency will get re-pegged to gold, thus gold will go the moon and they will get rich.
i can sort of accept hand wavy argument that dollar is (very)-softly-sorta-kinda pegged by oil (or it’s necessity rather), but retvrn to gold is just dreams. for one, there is no need. Frankly all trade could be bilateral literally today, with fake liquidity pools-like automated systems held by cb. what other commodity is there, if needed? compute by petaflops? usa would dream of it.
gold for settling yearly trade imbalances? it’s less flexible than interest finagling, and doesn’t exactly help with countries issues, cause no one fixes those anyway.
I don’t think it needs to be a return to gold. In practice it can be a basket of commodities. There’s nothing unique about gold, but what matters is that physical commodities have inherent value derived from the labour it takes to create them. Countries that are commodity producers have something of tangible value to offer, and that’s what underlies the strength and stability of their currency. In fact, petrodollar has been a big aspect of what gave dollar stability. Everybody needs to buy oil for their energy production, and that created a steady demand for dollars when it was the only currency you could by oil in.
I do agree that bilateral trade is the the most likely scenario in short to medium term, but I can definitely see something akin to Bancor being created by the BRICS and to give it legitimacy, it could be backed by a basket of commodities that BRICS countries produce.
In fact, petrodollar has been a big aspect of what gave dollar stability.
This could not have been more wrong.
Petrodollar was simply the US forcing the Saudis to accept US dollars for oil (after the embargo ended in 1974), which the US can freely print, but the Saudis were not allowed to use it anywhere to develop their own economy except to buy US military equipments (and to fund the lavish lifestyle of their elites). And because there is nowhere else to spend those large quantity of US dollars they had earned, the only place for those money to go would be to buy US treasuries to earn interests.
That’s it, there is nothing special about the “Petrodollar”. It does not finance the US government, nor did it confer the dollar its “reserve currency” status.
More accurately, Petrodollar is an imperialist tool by the US to force oil-producing countries into selling oil in exchange for freely printed US dollars but cannot use them to invest in their own domestic economy, hence they all ended up buying US treasuries.
The whole Petrodollar myth is perpetuated by Austrian school libertarians who are obsessed with gold and later crypto because their faulty model believes that the US dollar will collapse one day (never gonna happen unless by choice).
The reason their model is wrong is because they believe in a natural interest rate for the US dollar, which did exist when the dollar was pegged to gold previously during the gold standard and Bretton Woods era (fixed exchange rate), but is now completely irrelevant after the US dollar turned into fiat after 1971 (free floating exchange rate).
This is why the gold backed reserve currency is never gonna happen, folks! There is no natural interest rate in a free floating exchange rate system. Without government intervention, the interest rate will simply fall to 0%. The dollar is never going to crash, unless by choice. But the Austrians don’t understand this. Their model is completely and utterly wrong.
The only way to de-dollarize is for the countries to not have to export their surplus goods to the US anymore, and this requires another player (like China) willing to run a trade deficit to absorb those surplus goods from the exporting countries. Otherwise there is nowhere else for those surplus goods to go, and they still have to sell to the US. This is why all the exporting countries are panicking and trying to make a deal with Trump right now.
but I can definitely see something akin to Bancor being created by the BRICS and to give it legitimacy, it could be backed by a basket of commodities that BRICS countries produce.
Please explain how are we going to get a Bancor-like system with China running a $1 trillion trade surplus annually? Have you ever thought about that?
While Petrodollar certainly does what you describe, that in no way contradicts my point that the need for oil ensures constant global demand for dollars. Countries must convert their currency into dollars to buy oil.
The only way to de-dollarize is for the countries to not have to export their surplus goods to the US anymore, and this requires another player (like China) willing to run a trade deficit to import those surplus goods from the exporting countries. Otherwise there is nowhere else for those surplus goods to go, and they still have to sell to the US. This is why all the exporting countries are panicking and trying to make a deal with Trump right now.
That’s not true because the obvious way to create demand for surplus goods is by developing the global majority nations, raising the standard of living, and thus creating more consumption demand. This is precisely what China has been doing with initiatives like BRI where they help countries build infrastructure, and develop economic growth.
Please explain how are we going to get a Bancor-like system with China running a $1 trillion trade surplus annually? Have you ever thought about that?
I have, and I don’t see why that’s a problem. The whole point of Bancor is that it’s just a medium of exchange. How much surplus any one country runs is utterly irrelevant.
Did you even listen to the Hudson interview? At which point did Hudson say it came from Petrodollar?
Hudson explains the general mechanic there. He has other interviews where he makes the connection more explicit if you really need me to dig them up for you, let me know. You still haven’t actually explained what part of the statement that countries only being able to buy oil in dollars creates constant demand for the currency thus making it a safe store of value you’re contesting. Perhaps you could answer that.
The whole point of Bancor is to punish countries for running huge imbalances, so as to return the world to a more balanced trade.
The whole point of Bancor is to act as a neutral exchange medium rather than a store of value. The system isn’t designed to punish countries for having trade imbalances, but rather to incentivize them to reduce persistent surpluses or deficits through a mechanism that automatically adjusts the value of their currency based on their trade balance. This encourages a more balanced global trade environment by making large, sustained imbalances less appealing, without singling out any specific nation for punishment.
No offense, I don’t think you understand how Bancor even works.
Oh, no offense taken. It’s just delightful to be schooled on Keynes by someone who seemingly believes the entire point of Bancor was to put a leash on a country’s surplus, as if trade balances are some kind of moral failing that demands punishment.
Perhaps a quick refresher is in order. The core idea behind Bancor wasn’t to wag a finger at any specific nation’s economic success or to punish them for running a surplus. It was to create a neutral, international reserve currency to facilitate global trade and stabilize exchange rates by disincentivizing both large, persistent surpluses and deficits.
The aim was balance, yes, but through an adjustment mechanism, not a punitive one directed at one side. The whole system was designed to promote adjustment on both sides of a trade imbalance, preventing either excessive hoarding of foreign exchange or unsustainable debt, by automatically influencing the value of a nation’s Bancor holdings. So, in that context, how much surplus any one country runs is utterly irrelevant to the core mechanism, which is about systemic balance, not singling out offenders.
Both for countries outside, but also within BRICS because there isn’t much trust between different members, such as China and India for example, and nobody wants the repeat of the dollar where a single nation gains disproportionate control over the system. Since commodities aren’t inherently tied to a specific currency, that makes them a more neutral store of value.
I think the analysis there is solid though, it seems that central banks are indeed starting to hoard gold because trust in the dollar and US bonds is starting to collapse.
gold ownership verifiable by blockchain held in vaults? cmon.
bonds have entered back to nothing ever happens territory + why exactly gold is needed aside from central bankers porky interests? holding too much in reserves is old timey behavior, no one gives a shit you hoard reserves (see russia).
it’s one of those i’ll believe it when i see first central bank selling gold to settle. right now they are just holding down their own currency for exports and porkies profit.
Bonds absolutely have not entered nothing ever happens territory. It’s pretty obvious that US bonds cannot act as a store of value in the long term. The faith in the dollar outside the west is rapidly collapsing, meanwhile western aligned countries like Japan are are starting to see disastrous consequences. https://franknez.com/worlds-largest-pension-fund-now-loses-61bn-as-dollar-falls/
The idea is not to sell gold to settle, but to have a currency backed by a physical commodity. I very much agree with the analysis here https://youtu.be/SV-jpJqDX7c
no, it’s the idea of goldbugs that some currency will get re-pegged to gold, thus gold will go the moon and they will get rich.
i can sort of accept hand wavy argument that dollar is (very)-softly-sorta-kinda pegged by oil (or it’s necessity rather), but retvrn to gold is just dreams. for one, there is no need. Frankly all trade could be bilateral literally today, with fake liquidity pools-like automated systems held by cb. what other commodity is there, if needed? compute by petaflops? usa would dream of it.
gold for settling yearly trade imbalances? it’s less flexible than interest finagling, and doesn’t exactly help with countries issues, cause no one fixes those anyway.
I don’t think it needs to be a return to gold. In practice it can be a basket of commodities. There’s nothing unique about gold, but what matters is that physical commodities have inherent value derived from the labour it takes to create them. Countries that are commodity producers have something of tangible value to offer, and that’s what underlies the strength and stability of their currency. In fact, petrodollar has been a big aspect of what gave dollar stability. Everybody needs to buy oil for their energy production, and that created a steady demand for dollars when it was the only currency you could by oil in.
I do agree that bilateral trade is the the most likely scenario in short to medium term, but I can definitely see something akin to Bancor being created by the BRICS and to give it legitimacy, it could be backed by a basket of commodities that BRICS countries produce.
This could not have been more wrong.
Petrodollar was simply the US forcing the Saudis to accept US dollars for oil (after the embargo ended in 1974), which the US can freely print, but the Saudis were not allowed to use it anywhere to develop their own economy except to buy US military equipments (and to fund the lavish lifestyle of their elites). And because there is nowhere else to spend those large quantity of US dollars they had earned, the only place for those money to go would be to buy US treasuries to earn interests.
That’s it, there is nothing special about the “Petrodollar”. It does not finance the US government, nor did it confer the dollar its “reserve currency” status.
More accurately, Petrodollar is an imperialist tool by the US to force oil-producing countries into selling oil in exchange for freely printed US dollars but cannot use them to invest in their own domestic economy, hence they all ended up buying US treasuries.
The whole Petrodollar myth is perpetuated by Austrian school libertarians who are obsessed with gold and later crypto because their faulty model believes that the US dollar will collapse one day (never gonna happen unless by choice).
The reason their model is wrong is because they believe in a natural interest rate for the US dollar, which did exist when the dollar was pegged to gold previously during the gold standard and Bretton Woods era (fixed exchange rate), but is now completely irrelevant after the US dollar turned into fiat after 1971 (free floating exchange rate).
This is why the gold backed reserve currency is never gonna happen, folks! There is no natural interest rate in a free floating exchange rate system. Without government intervention, the interest rate will simply fall to 0%. The dollar is never going to crash, unless by choice. But the Austrians don’t understand this. Their model is completely and utterly wrong.
The only way to de-dollarize is for the countries to not have to export their surplus goods to the US anymore, and this requires another player (like China) willing to run a trade deficit to absorb those surplus goods from the exporting countries. Otherwise there is nowhere else for those surplus goods to go, and they still have to sell to the US. This is why all the exporting countries are panicking and trying to make a deal with Trump right now.
Please explain how are we going to get a Bancor-like system with China running a $1 trillion trade surplus annually? Have you ever thought about that?
Hudson has a different view on this https://michael-hudson.com/2025/06/hostage-to-the-petrodollar-how-oil-wealth-fuels-u-s-empire/
While Petrodollar certainly does what you describe, that in no way contradicts my point that the need for oil ensures constant global demand for dollars. Countries must convert their currency into dollars to buy oil.
That’s not true because the obvious way to create demand for surplus goods is by developing the global majority nations, raising the standard of living, and thus creating more consumption demand. This is precisely what China has been doing with initiatives like BRI where they help countries build infrastructure, and develop economic growth.
I have, and I don’t see why that’s a problem. The whole point of Bancor is that it’s just a medium of exchange. How much surplus any one country runs is utterly irrelevant.
Did you even listen to the Hudson interview? At which point did Hudson say it came from Petrodollar?
You don’t see a problem that China would be the country that receives the most severe punishment by running the largest trade surplus in the world?
The whole point of Bancor is to punish countries for running huge imbalances, so as to return the world to a more balanced trade.
Like, why do you think Keynes proposed Bancor in the first place?
No offense, I don’t think you understand how Bancor even works.
Hudson explains the general mechanic there. He has other interviews where he makes the connection more explicit if you really need me to dig them up for you, let me know. You still haven’t actually explained what part of the statement that countries only being able to buy oil in dollars creates constant demand for the currency thus making it a safe store of value you’re contesting. Perhaps you could answer that.
The whole point of Bancor is to act as a neutral exchange medium rather than a store of value. The system isn’t designed to punish countries for having trade imbalances, but rather to incentivize them to reduce persistent surpluses or deficits through a mechanism that automatically adjusts the value of their currency based on their trade balance. This encourages a more balanced global trade environment by making large, sustained imbalances less appealing, without singling out any specific nation for punishment.
Oh, no offense taken. It’s just delightful to be schooled on Keynes by someone who seemingly believes the entire point of Bancor was to put a leash on a country’s surplus, as if trade balances are some kind of moral failing that demands punishment.
Perhaps a quick refresher is in order. The core idea behind Bancor wasn’t to wag a finger at any specific nation’s economic success or to punish them for running a surplus. It was to create a neutral, international reserve currency to facilitate global trade and stabilize exchange rates by disincentivizing both large, persistent surpluses and deficits.
The aim was balance, yes, but through an adjustment mechanism, not a punitive one directed at one side. The whole system was designed to promote adjustment on both sides of a trade imbalance, preventing either excessive hoarding of foreign exchange or unsustainable debt, by automatically influencing the value of a nation’s Bancor holdings. So, in that context, how much surplus any one country runs is utterly irrelevant to the core mechanism, which is about systemic balance, not singling out offenders.
but why you need backing, is the part i don’t get? for who? for countries outside?
Both for countries outside, but also within BRICS because there isn’t much trust between different members, such as China and India for example, and nobody wants the repeat of the dollar where a single nation gains disproportionate control over the system. Since commodities aren’t inherently tied to a specific currency, that makes them a more neutral store of value.
deleted by creator
I found a YouTube link in your comment. Here are links to the same video on alternative frontends that protect your privacy:
Yeah I agree, I don’t think they’re hoarding gold for this reason.