So I was thinking: we've been seeing news of Russia, China or India buying massive amounts of gold. When you think about it, it sounds a bit dumb that the way to protect yourself and your interest as a country is by buying some tons of a shiny metal and storing them in a vault. Correct me if I'm wrong (I probably am, I'm no economist), but I think that made sense a hundred years ago when some strong currencies were backed up by gold.
However, these days, it doesn't serve any purpose other than having an "international" currency (China wants milk from Russia, gives Russia a few tons of gold and Russia sells the milk for that amount of gold) but even then, some other metals can serve that purpose (silver, platinum, etc). I get the feeling that countries use it as a political weapon and a defense mecanism and not something else. I don't get why countries like China/Russia buy gold in massive amounts when, if they want to defend themselves, they can make more nukes or try to make their economies stronger. I don't know if I'm explaining my point
Whats the point of storing gold in 2025 in central banks if no currency is backed up by it?
byu/RequirementNo3395 inAskEconomics
Posted by RequirementNo3395