From Alt-Market.com at http://www.alt-market.com/index.php/articles/4057-is-this-why-central-banks-are-rushing-to-buy-gold
Friday, 10 January 2020 04:24 Brandon Smith
This article was written by Brandon Smith and originally published at Birch Gold Group
Gold has seen an impressive price spike in the past 18 months, and if you are wondering what the cause is, you’ll find almost everyone has a different theory. That said, certain factors in historic gold rallies tend to be ignored. For example, the mainstream financial media often hyper focuses on stimulus measures by the Federal Reserve as the cause, but I would remind people that the most recent upward trend in gold started while the Fed was tightening liquidity and raising interest rates, not stimulating. Also, many analysts suggest that precious metals absorb investment cash flows when equities are sliding. Yet, for now, stocks have been rallying for the past year as gold prices also trend upward. So, what is the mainstream missing here?
First and foremost, it’s important to understand that gold is not necessarily just an inflation hedge; it is also a crisis hedge. As economic and geopolitical uncertainty grows, gold prices skyrocket. The past decade has seen uncertainty and instability that the world has not seen for almost a century. The problem is, the average American is oblivious to this state of affairs. They have no idea how bad the situation can get, as they assume there are checks and balances to counter any potential disaster in the financial structure. They assume that the government or the banks will step in.
However, there are signals that tell us that this will not be the case. In fact, it appears that central banks around the world are preparing for an event that they either cannot quantify yet or simply refuse to warn the public about. This is evident in the acceleration in gold stockpiling by banking institutions.Continue reading