We Study Billionaires - The Investor’s Podcast Network TIP638: Gold w/ Lyn Alden
40 snips
Jun 16, 2024 
Lyn Alden, an investment expert and author of "Broken Money," joins the discussion to unpack the recent surge in gold prices. She explains the intriguing dynamics of central bank purchase strategies and the importance of gold in emerging economies versus developed ones. The conversation delves into the pros and cons of a gold standard, the distinction between physical and paper gold, and how geopolitical climates influence market conditions. With a mix of insights and anecdotes, Alden highlights the strategic value of gold in today’s financial landscape.
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Contextualizing Gold Reserve Growth
- Central bank gold reserves rose from around 30,000 tons in 2009 to over 36,000 tons recently.
- This increase should be viewed in context with the overall growth of balance sheets and other factors, not just as a percentage increase.
Reserve Levels and Economic Policy
- Developed nations hold fewer reserves relative to GDP than emerging markets due to liabilities primarily in their own currency.
- Continuously accumulating reserves can indicate a mercantilist policy, suppressing wages to maintain global competitiveness.
Risks of Printing Money for Gold
- Printing money to buy gold risks inflation and currency devaluation, especially for countries with already unstable currencies.
- Reserve accumulation is more effective from a position of strength, like a trade surplus and strong currency.
