A lot of central banker bashing goes on in the world of gold investment. This is, of course, understandable given the fiat machine they keep well oiled.
However amongst their daily routine of propping up the paper markets, we all know that they recognise how important gold is. Some of them, are even prepared to be vocal about it.
We bring you some of the most vocal out there. This is of course a purely subjective look designed to get the discussion going so join our G+ Community and let us know what you think.
Salvatore Rossi – Director General of Banca d’Italia
For his fierce defence of Italy’s gold reserves as last week’s LBMA conference, when he reminded attendants of the ‘special role that gold plays in central banks’ official reserves,’ we believe Mr Rossi deserves some credit.
Mr Rossi believes gold’s role as a faceless currency gives it unique role in a central bank portfolio, playing a key role in central bank independence ‘owing to the fact that it is not “issued” by any government or central bank, so its value cannot be influenced by political decisions or by the solvency of any institution.’
With 2,451.8 tonnes of gold the head of Italy’s central bank sees gold as the ultimate safe haven for all countries, ‘As an element that enhances the resilience of reserves to abrupt falls in value in times of stress, gold underpins the independence of central banks and their ability to act as the ultimate guarantor of domestic financial stability.’
We have been talking about China a lot recently (see our amazing infographic here, if you haven’t already). It seems silly not to include some of the men behind the China’s move towards gold, this time we bring you both the current and former central bankers of the People’s Bank of China.
Zhou Xiaochuan - Governor of the People’s Bank of China
Zhou has been very vocal about the role gold can play in an economy, both as a currency and an investment. This has been reflected in the ongoing development of China’s gold market.
‘Gold is a commodity that combines the attributes of a currency, financial commodity and general commodity. Despite the declining function of gold as currency in the world, the activeness and development of investment activities with gold as the target indicates that gold still has a strong financial nature and remains an indispensable investment tool. In major financial centers in the world, the gold market, together with the money market, securities market and FX market, constitutes the main part of the financial market.’
Dai Xianglong - The former governor of the People’s Bank of China 1995-2002
The driving force behind China’s increasingly open and competitive gold market. Dai oversaw the opening of the Shanghai Gold Exchang and also the relaxation of gold imports and liberalisation of the gold market.
He believes the opening up of China’s gold market is an important step in the development of China’s economic and financial status and is one of the key mind’s behind China’s identification of gold as a strategic financial asset.
Nelson Merentes - President of Venezuelan Central Bank (BCV)
The repatriation of Venezuela’s gold made headlines two years ago. Many saw it as a crazy move, but since then we have seen several banks go down the same path, most recently Germany. Whilst Chavez took most of the glory, it was Merentes who oversaw the repatriation of Venezuela’s gold.
Upon the repatriation of the country’s gold Merentes told cheering crowds, “It has historic value. It has symbolic value. And it has financial value…The country’s finances will be backed by autonomous wealth, so we are not subject to pressure from anyone…This guarantees that if there are financial problems in the international markets our gold will be safe here at home.”
Sir Alan Greenspan - Former Chairman of the Federal Reserve
Sir Alan Greenspan was the most common choice on Twitter. Oddly for a former Fed Chairman he is one of the most famous goldbugs of our time.
In a 1967 essay titled ‘Gold and Economic Freedom’ he wrote, ‘In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.’
Looking back on his goldbug past he once told Dr Ron Paul (who reminded him of Gold and Economic Freedom) that he realized he had been wrong, and that he was able to pursue policies that mimic the gold standard in his role as Federal Reserve Chairman.
This of course wasn’t the case during his tenure the US monetary base rose from $233.5 billion to $782.5 billion, a 235% total increase or 6.8% annually. Not exactly the conservative nature monetary base growth of the gold standard.
