As Donald Trump shatters the global rules-based order, official institutions (and private investors) are scrambling to buy gold: the share of the asset in central banks’ reserves has doubled in the past decade to more than a quarter, the highest level in almost 30 years.
Although this partly reflects the soaring bullion price, experts say central banks are also stuffing their vaults as an insurance policy in a volatile world. Many are also rushing to repatriate gold stockpiles held overseas, and slashing their exposure to the US dollar.
“We have moved from Pax Americana to global discord, geopolitically. It is the law of the jungle when we see what the US are doing,” says Raphaël Gallardo, the chief economist at the asset manager Carmignac.
“Investors – private and sovereign – believe their strategic reserves are no longer safe in dollar terms, as they can be confiscated overnight. The dollar is losing the credibility as the nominal anchor of the global monetary system because the Fed is losing credibility, and US Congress is losing its credibility.”
Unfortunately, many UK voters don’t realize they’re setting themselves on the same path in the next election. The UK has one of the most fragile democracies in Europe, and its system is ill-prepared for a fascist majority in the Commons. Farage may be less of a moron than Trump (a low bar), but his voters are cut from the same cloth as Trump’s.
But we know how this works, we’ve been in this ride 100 years ago. Why do neoliberals always forget that democracy only works so much until it breaks if they just keep concentrating power? They are inevitably more afraid of a little socialism than fascism…