This page has been archived and commenting is disabled.
The Hoarding Continues: China Has Imported More Gold In Six Months Than Portugal's Entire Gold Reserve
While the highly "sophisticated" traders that make up the gold market continue to buy or sell the precious metal based on whether the Fed will or will not do the NEW QE tomorrow (or just because, like Bruno Iskil, they have a massive balance sheet, and can create margin position out of thin air with impunity), China continues to do one thing. Buy. Because while earlier today we were wondering (rhetorically, of course) what China is doing with all that excess trade surplus if it is not recycling it back into Treasurys, now we once again find out that instead of purchasing US paper, Beijing continues to buy non-US gold, in the form of 68 tons in imports from Hong Kong in the month of June. The year to date total (6 months)? 383 tons. In other words, in half a year China, whose official total tally is still a massively underrepresented 1054 tons, has imported more gold than the official gold reserves of Portugal, Venezuela, Saudi Arabia, the UK, and so on, and whose YTD imports alone make it the 14th largest holder of gold in the world. Realistically, by now China, which hasn't provided an honest gold reserve holdings update to the IMF in years, most certainly has more gold than the IMF, and its 2814 tons, itself. Of course, the moment the PBOC does announce its official updated gold stash, a gold price in the mid-$1000 range will be a long gone memory.
Here is the latest breakdown of gold reserves by Top 20 countries via the WGC:
»
- 40279 reads
- Printer-friendly version
- Send to friend
- advertisements -
Nothing to see here, keep moving along, everything is fine...........BTW NFL pre season special is on tonight, followed by the premiere of the Voice!!!
China hasn't even begun to "import gold", you see that list above, they got that list too!! What jumps out at ya???????? Right, their number 6 on that list, ever met anyone from China recently?? No, let me clue you in something, they don't wake up in the morning to be #6 in anything, they want to be #1!! So if you think they are gonna slow down, keep smokin!!! They will slow down when the list reads like this:
China 11,000 tonnes
Germany 6500 tonnes
US 6000 tonnes
and so on down the list........and how will America lose Gold tonnes, you ask, simple, China will as some point demand gold bullion from the Fed as payment on interest on bond debt, as will others! Once they realize (if they havent alrerady) that the dollar is going to be a worthless piece of toilet paper, by the time these idiots in DC get done with it, gold is the only real option to avoid default!!!!
Who's the lucky winner of the tungsten bars?
I hope that people in the Fed have read Chinese history.
The Chinese have a habit of making heavy sacrificing to get what they want... and I'm certain some smart US educated Chinese are sitting in Bejing, building economic "scenario" models of what the future can look like and it's economic impact on China:
No..... what Soros AND Paulson and even little ole me see.....is that China is picking up speed......so I better too....just when you thought you had some time to add more....you found out you did not....its called buying pressure...I still think there will come a moment in London or at the Comex when they can not settle to gold ....because there is none to settle with......then all that paper will come crashing down.....that 100 to 1 we hear about will be proved right or wrong...and we will find out who the real thiefs are...you know the banks that will not settle...but will keep the gold in their....I mean your vaults......but just for them
No doubt every word you say is true. Possession is >9/10s of the law with gold.
China sees, as so many people do, that the central banks are slowly drowning in their own vomit of skimmed interest proceeds from loans of counterfeit paper, and that this system built on lies, deceit, and immorality is not sustainable in it's current form. With every ounce of gold China buys in place of treasuries or other bills of credit/debt, it will be that much more prepared to watch disinterestly while the paper lies inevitably bear their rotten fruit.
So China mine 250 tonnes a year, don't export any of it, and they've only got 1054 tonnes? So they only discovered mining in 2008?
I think you'll find they've got more than 8144 tonnes or am I missing something!
That's the thing I just wondered about when I opened the article. Great point.
Hiding Shiney, Powerful Dragon
How does China's gold hoarding and hard landing stories live together? ZH never seems to have an article that puts the two threads in perspective. Or are they simply unrelated?
I think it's primarily due to the fact that since Kinssinger made the deal with the Chinese in the what, 70s, China was pledging to play in the rigged Ponzi casino in exchange for transforming from a third world country into an emerging market country. After decades of achieving fiat driven "benefits", 2008 taught the Chinese a very humbling lesson...Ponzi schemes only work as long as everyone keeps on playing.
So following 2008/2009, China began making plans of their own. They realized that the fiat driven ponzi scheme was heading toward its eventual guaranteed end. When your entire economy is built on fiscal/monetary stimulus (just as the US was/is), what is your best option? Allow everything to collapse without having hard assets (your only "real" assets are FRNs owed by the US government) or begin covertly buying every hard asset you can get your hands on (using the very fiat toilet paper trash that the US forces you to buy)?
The way I see it, China is doing everything it can to soften the blow once the great reset begins. If China releases their actual gold holdings following the announcement of a perpetual flow QE model and the world learns that China has say, 10-20,000+ tons of gold, what happens? Yes they experience pain, but far less than the rest of the world, especially considering that when the dollar finally dies, gold being priced in the dead currency would be meaningless.
Also, as a previous poster mentioned, China's official policy is to encourage the general public to buy physical gold bullion. China as a nation has X amount of tons of gold...But those figures do not factor in what the general public has as well. When the dollar dies, China would likely call for the public to trade in their gold and which would be returned in the form of newly minuted gold Yuan bars/coins.
Or who knows. Maybe the Chinese have a deal with the Rothschild Illuminati to create the new digital gold backed currency in exchange for switching seats with the US in the UN Security Council and General Assembly.
Either way, the Chinese buying gold is HIGHLY significant.
It has been known for years that China and Russia are getting ready to propose a joint currency backed by precious metals (gold) to replace the Euro and the US dollar.
http://www.ibtimes.com/articles/85424/20101124/china-russia-drop-dollar.htm
Russia has plans on becoming a "financial center" much like the UK.
http://moscow.ru/en/infrastructure/business_finance/fincenter_in_Moscow/
HAHAHAHA, if you think the UK criminal bankers are "bad" wait till the Russian mobsters (aka Puttin) start running financial trades.
http://web.wm.edu/so/monitor/issues/07-1/4-hatcher.htm
Like Sino Forest, is anyone gonna believe the amount of gold backing a Chinese "reserve" currency?
HAHAHAHA they may have no choice when the FIATS blow up.
I trust a Russian more than a limey!
Tuco
Buy physical, hold physical, trust yourself (but not blindly) and avoid boating.
Have you taken a look at the Russian Fed. Coat of Arm?
Dubble headed Eagle on a... Red Shield.
http://en.wikipedia.org/wiki/Coat_of_arms_of_Russia
Choose your poison.
The IMF inventory = 2814. Hal Jordan is Green Lantern (comic book character) of Space Sector 2814. Coincidence? I think not.
Seriously though, compare the tone of this piece with the latest installment from the "World Gold Council":
WGC: 2Q Year-On-Year Decline In Global Gold Demand Led By Falls In India, China (16-Aug)
Meh.
This should be an embarrassment for JP Morgan and the CFTC. How much has the price of gold moved during this market action? Massive buying of PHYSICAL METAL can be easily disguised by even larger naked shorting and ghost selling. It wouldn't surprise me one bit to discover China is paying JPM to depress the price.
Slavery & Gold, Black or Otherwise
The demand side price of oil is $18, and the supply side contract price is $65, to maintain the slave population of make-workers reinforcing all the artificial borders for the purpose. The spot price reflects the risk of ponzi demographic collapse, which is the debt assigned to future generations serving as collateral at the base of its pyramid. Price is a fulcrum.
The civil war was not about abolishing slavery. White guys created the NAACP, and the KKK was and is about money. From capital’s perspective, you may accept its money to conform or die. Killing you off is just more expensive, because nature ensures that you will be replaced, with additional uncertainty. Lincoln didn’t employ fire by accident.
Government certified unions are not labor. Labor does not build its foundation on words in a book, commissioned by capital, King James, or anyone else. Capital money has never been, nor will it ever be, labor’s God.
The assumption of a reserve currency, that it may be printed to infinity, replacing God, is true relative to the imploding empire, until it isn’t; it is not true relative to nature. That’s the traveling salesman problem Wall Street is paid very well to solve, which is why it is still printing and selling capital appreciation bonds, on the back of future generations, to keep the day to day union operations in California, and elsewhere on the global MAD IC chip, going. The empire debt mismatch has reached terminal velocity, leaving Governor Brown with no choice but to act and sell a tax increase that will accelerate tax base collapse beyond the Fed’s window, whether it is accepted by so registered voters or not.
Yes, by all means, save the school to jail pipeline. Meanwhile, labor will do what it always does, go to work, building the future. Whether capital and the middle class choose to recognize holy matrimony as the limit of government operation or not is irrelevant to labor.
Labor serves at the pleasure of nature, which serves the universe, which serves the unknown. Jobs change hands on a regular basis, as does capital, in a competition to accelerate the gene churn pool, which is why individuals work for labor.
You are welcome to choose slavery certification, but don’t interfere with family self-governance and mistake good manners for no response. Labor employs time. Capital fights time. The middle class rides the current between the poles, which may be adjusted at will to drown out the noise.
Capital must expend itself continually to reassert its authority. Labor doesn’t have that problem. Life is about labor and labor is about life, which is the point of birth. The womb is the cradle and love is the usher, which is why capital is hell-bent on shorting the process to its own end.
California is set up to birth and tax stupidity. If you want out, turn the channel, but don’t expect to change the empire program. Only the dress changes, upon the end and beginning of each iteration. Within the empire, lying resonates and the truth burns the ear.
You can put lipstick, a robe, or a suit on a wh-, but it is still a wh-, which is just another name for a robot, serving the purpose of robots. Choosing a path based upon empire resistance results in the same choice, with increasing pressure on decreasing volume, because the implicit side, the unknown, expands accordingly, upon reversion.
Tuning distance is only rocket science for a robot, enslaved by virtual memory, enabled with false assumptions. There is much more to Galileo’s gravity than meets the eye, and much less with Galileo’s money. The shortest path to gold is not lead, except in the something for nothing economy, and its days are always numbered by its first act, end to beginning.
From the perspective of capital, resource control is the point of selling oil, which is the point of selling cars, which is the point of building roads. From the perspective of labor, the car was temporary, like all implements. Capital is always on a bridge to nowhere, self-satiated in the measurement of its own economic activity, seeing only itself, propagated along a wave of propaganda.
Speculators bet on the casino itself, whether they know it or not, and when they bet against the casino without permission and win, the casino gets mad and burns itself down, like the spoiled child that it is. Life is full of surprises, but casino operation is not one of them.
Life isn’t fair in the short term, but it is quite fair in the long term. Value depends upon the timing of your perspective, and the world unfolds accordingly. Travel across the empire’s arbitrary borders, to maintain that choice for your children. Whether others care or attempt to impede your travel is irrelevant to you, but becomes dramatically relevant to the middle class.
“You will know the truth, and the truth will set you free.” The majority is always welcome to vote for its own enslavement, but it applies the outcome to others at the cost of its own destruction. The chain of despair encircling the empire’s neck is always forged in jealousy, replicated in its own image.
Pull the crisis managers, the damsel in distress prophesying Armageddon vs. nirvana, out of the fire, until it suits your purpose not to. When someone calls at 3am to tell you that the empire is on fire, disconnect the phone and go back to sleep. The sun will always rise on prosperity, if you meet it at the horizon of the unknown.
The political choice is always false, unless you choose to make it true, of your own free will. GDP is a lie, always has been. Act upon it to the extent you require gravity for your development. Labor requires no more gravity in this iteration.
WOW! Reminds me of doing acid back in the 60's. Thanks!
I almost spit my lunch all over the keyboard, thanks for the laugh!!!!!!
Kevin, what you say is deep, but what does it mean?
there's a method to his madness
Fnord
Ask a question three (3) times and you'll get the truthful answer.
Why is China buying this gold?
Why is China buying this gold?
Why is China buying this gold?
Forget what the msm and others are saying about PMs.... follow the numbers... this is not happening for nothing... and notice that this is not sticky SPDR paper they are buying. It takes nerve to hold on for the longer term...
It'll make it real easy for the U.S.S.A. to confiscate gold having it all in GLD's vault. They can just place an official value on it and pay out devalued fiat to the muppets.
I guess the Chinese are a lot smarter than our illustrious financiers (dopes).
We make sure our gold is budget priced for them to snap up.
The fiat fantasies of the elites are winding down. It's like in a tough chess game. You plot and plan until you have your opponent on the ropes, trapped and surely doomed, but the jerk won't capitulate and makes you waste an hour as he makes pointless attacks with his minor pieces just to delay the inevitable.
They know this is going to fail, why keep making things worse?
And what will the U.S. do?
2 billion chinese being TOLD BUY..BUY..BUY ALL GOLD ..SILVER..ETC..ETC..
What's Coach Obama telling us .... give 'til it hurts !
Plenty of empty store fronts. Whole strip malls empty in many US localities.
I'm pretty sure if there is not 383 physical tons of gold in the entire world for sale at these prices. So which nations went bankrupt and were forced to turn their gold over to them?
Which countries are not BKd?
I wait with bated breath for the highly regarded million dollar boner to share his expertise on the subject.
When China is backing up the new reserve currency with gold, it means that gold is accepted as money. Worldwide. Makes confiscation or taxation to defend financial fascism's fiat more difficult. So, keep stacking.
As they ramp up digital exchange in a "cashless" (and clueless) society, the barbarous relic will assume less validity as a medium of exchange, which for the common man is presently near zero. with the exchange of actual cash in hand for goods and services presently only 7%, digital electronic entry (as in FED controlP) will be the preferred method of payment. the massive amounts of gold being acquired by large institutional investors and sovereigns may play out in eventual gold backed currency, say in the form of IMF SDRs, but that will be some time in coming. the lions share of bullion will rest forever in highly secure vaults awaiting the new golden age while the 2% of small scale invertors and exceedingly random street and internet E purchasers live in shadows of doubt fumbling with Krugerrands and Eagles, looking over their shoulders heavy with the perplexing conundrum of convertibility (or not).
It is very clear why the chi comms are doing this. They wany the remimbi to be the reserve currency of the world. WTFU people. It is already happening that settlements are not in $$s but in the country's currency in the transaction. Gold is essential part of the backing and will likely be at 25% of remiimbi. Then in about 5-10 years if this admin has its way we will be baked totally to death. See england now and cube it and you see us in 5-10.
There will come a time when the Chinese will tell the world how much gold...silver...copper...iron....rare earths.....farmland....they have.....and when they do...we will not like it....but other countries will....and they will be the new kid in town...with all the wealth....and then watch the New York boys try to buddy up to them....politicans too....and leave us behind with our paper..our debt....our Iphones...and our failed society
The governments all lie or they would no longer exist. China telling the world that they have warehouses full of painted tungsten wont increase the value of their currency. When it comes time to buy resources, they can offer mortgage backed securities, ETFs, treasury bonds or GOLD to tribal leaders or countries like Iran. There are bound to be more countries that find themselves in the position of Iran.
"the moment the PBOC does announce its official updated gold stash, a gold price in the mid-$1000 range will be a long gone memory."
This is probably true and it raises a question I've long had about markets:
Why do they only react when there is an official announcement of what everyone already knows (except that little bump of insiders trading just before the announcement)?
Is it just because computers can only read official announcements?
It was just back in 1953 that Ft. Knox was last audited so I have no problem with the believability of any of these stats.
Tuco
See the dismantling of 800+ military US bases in the near future. Greenback greed bitches. That's what got you. First push a few buttons, then take your geiger counters, and watch the new world currency arrive. Gasoline $56,- a gallon.
Well, we drove small cars for 50 years. Get used to it. It's not important. Really.
Gold bullish!
Bunch of barbarians! Civilized people don't buy gold. They invest in productive assets like US treasuries, San Bernardino County Muni bonds, Facebook, groupon and MF globals.
Gold is only useful if you were a kike escaping the krauts in 1936. You sew it in your underpants to keep both your blood pressure and sperm count low. That was back then. Technologies have advanced dramatically since. Nowadays the TSA just microwaves you in one of their new scanners. If you dare to hide any metal on you, you gonna explode like popcorns. Don't like the scanner? Well how about repeated anal probe by some agent?
You are not gonna make any money on gold. If you do, that's because you are a jerk.
-- Charlie Munger
Given the Iron Cross, do you really have to use the slur.
I guess he just wanted to make sure we weren't confusing him as just a fan of biker reality TV.
It's super friendly of Jamie Dimon to suppress the official price of gold so the Chinese can load up at more reasonable prices.
I hope they're showing their appreciation every year with a fruit basket or something nice.
And don't you blame Corzine for this! He's a product of human malfunction. Just like the euro and, in your case, serial.
Any bets on whether Italy's gold stash is still intact? Mafia. Vatican. Bunga Bunga. So many little rodents nibbling away - hey, it sure looks like cheese to me. But what's that yucky silvery stuff in the middle.
And then we have La France. Any bets on whether France still has any gold? Or, rather, whether France still has any gold that hasn't somehow slipped into very private hands. (The Rothchild's ya know)
Then there's Germany. They probably still have all their gold - problem is that most of it isn't in Germany. So maybe "still have" isn't quite the way to put it.
And then of course - of course - there's the USA. You can be sure that all's well in Ft. Knox. No you can't see it. But its there. You betcha.
Yep. I believe the nations official gold reserves is another scam. It would solve some 'debt problems', heheh
But what about the BIS tier1 gold thing? don't hear about it anymore. I tell you, the gold 'thingy' stinks. Black swan maybe.
I believe (theoretically) that 2/3rds of Germany's gold is held by the Fed for safe keeping. Ooopsy. You might want to rethink that league table.
china won't announce official reserves until they are done buying. market cornered, investors f'ed.
you almost have to be impressed with their strategy. unethical yes, but which government isn't these days. We just got out-cowboyed. ouch.
I guess the only good news is that we still have time to build some holdings. I'm playing with the house on this one.
How can buying physical gold on the market be unethical for anybody?
I buy with phony FRN's, so does China.
Same, same.
We have had fairly low inflation for the past few decades. Most people see no reason to own PMs. Imagine what gold will be worth after the "great reset" where the US, Japan, and Europe resolve their huge debt loads by printing fiat. Just keep accumulating PMs now, before the rush.
Get your gold this week!!! Sunday maybe the "Grexit Black Swan"
why sunday THIS week in particular?
never heard that one before.
Hmmm, it appears they've imported about 30% of the world's production so far. It makes one wonder where it's all coming from.
Mind you, they do export a bit now and then but still it's amazing the price stays flat. Of course, we see only the paper price on Kitco on which it is reported Soros and Paulson are loading up. http://www.bloomberg.com/news/2012-08-15/paulson-steps-up-gold-bet-to-44-of-firm-s-equity-assets.html
two thoughts:
1. China buys gold because they refuse to trust a real internal market, price signals and the resourcefulness of their own people. Ai Wei Wei said it, again this week, the Chinese police state has created neither rule of law nor faith in the future, the preconditions for economic success over any significant time horizon. A billion people want a future, and the kleptocrats at the top in China want title to gold in Swiss bank accounts. Sign of complete economic incompetence.
2. By taking gold out of the equation in the US, FDR prompted Americans to invest in themselves, education plus capital goods. No country relies on physical metal for savings more than India and you can't claim it has resulted in economic development - just bangle-laden fifteen-year-old brides. Hope that isn't what ZH proposes as the well-ordered society. No more useless individual than the one sitting on a pile of metal, waiting it to appreciate by the rate of population growth. (THe more pregnant fifteen-year-olds the better.) Or have I missed something? Well the Vikings did think a well-crafted armband might save your life if you got into the wrong crowd in Constantinople. But that is a pretty slim def of usefulness.
1) China buys a ton of treasuries and mortgage backed securities that they can dump on the market at any time as a threat to trade sanctions or tariffs.
2) Everything made in our stores is made in China. All the U.S. corporations are China based now and afraid to bring their profits home.
3) China goes to Africa and offers them better deals for resources instead of military bases and gets Iran's oil while convincing the BRICS, and every other country they can, to stop using the dollar.
4) Some of their leaders have Swiss bank accounts and are crooks? They'll never make it economically? Seriously?
I think Clinton, Bush and half of congress have ranches in Paraguay and the Dominican Republic to capitalize on the fall of the dollar and martial law. Who invented $600 Trillion in derivatives? Ending welfare as we knew it and free houses to anyone who breathes was to create a fake economy to kick the can. Reducing taxes on corporate profits is suppose to be the solution when comparing $30 an hour to $1 an hour labor. It's an easy win for China and the Expat U.S. corporations that live there.
Yes, but once the Indian "middle class" wakes up to find their economy is made of curry paste and wet dreams, they'll shit the bed like the weakest of hands.
China is on the right track but I see rough seas ahead.
"...but I see rough seas ahead."
The tougher the challenge, the sweeter the victory!...
Another bullish article for gold, guess we'll see a smack down to $1550 next week. Oh well, it would be rude not to go sailing next weekend.
the Chinese imports from Hong Kong: is that the Chinese retail market or the PRC CB? or both
so who is selling? Hong Kong? Can't the gold haters do the flip side story and say, look at that gold sell off!
is it weak hands or a country needing fast cash?? or a dump?? let's hear from the sellers
China is the biggest whale in the markets. When it moves around the ocean, it leaves a very big wake in the ocean of the markets.
China has stopped buying treasuries and decided to place its currency reserves into gold. Note that treasuries have been losing value lately despite new Japanese purchases, and also pay attention to the gold price. Even though their have been outflows from gold ETFs and investors have stopped adding to their positions, the price seems to levitate. Now we know why.
If the price of gold remains high, then China has smartly diversified its reserves. However, if it is the biggest buyer in the market, maybe it is distorting the price higher to its own detriment.
A country stockpiling gold during a market peak is just like a corporation buying back its stock during a bull market. When prices eventually come down, it will wish it had that money back.
dareconomics.wordpress.com
If the price of gold remains high, then China has smartly diversified its reserves. However, if it is the biggest buyer in the market, maybe it is distorting the price higher to its own detriment.
**********
If the price of gold remains high it likely has little to do with China-
Gold was in a bull market when central banks were still selling it-
China and the US gold reserves combined hardly mean anything-
There is 170,000 tons of gold out there "somewhere" so say 16,000 tons between the 2 countries-is really nothing and China adding 383 tons in a month is nothing either-
The price of gold hasn't done anything in over a year and this news sure didn't ruffle its feathers-
There is such a thing as lots of smart money and it is those who are hoarding and waiting and driving the price up and they've been doing it for years
China is buying a lot of gold but keep it in perspective. This 6 month accumulation is equivalent only 1.5% of their total US treasury holdings. And that is the number that is really bullish for gold. If they do start diversifying into gold then they will have to buy much, much faster. But at present they are making only a small diversification.
caprock... Lest we not forget... China is also the worlds largest gold producer and they are not exporting gold.
And Japan is the largest exporter of scrap gold - almost entirely to China.
Yet only 1/3 of said Japanese scrap gets exported...
BOJ?
Paulson and Soros have recently added to their gold position.
Bets are these guys have the inside track on what is coming up.
BTFDs
"Gold never goes to zero."
Even my financial advisor is now telling his clients to put 25% of their savings into the yellow metal. He has turned into a Barbarian after losing his investment in one of these recent funds that went Bust.
19.6 billion YTD. Big whoop.
China buying all this gold + China needing to put hundreds of millions of peasants on a new power grid means China swapping gold for silver later on to build a 21st century power grid = Silver, bitchez!
FOLLOW THE YELLOW BRICK ROAD... YOU CAN EVEN BRING YOUR BONGOS...
Hmm.... what to spend your earnings on? - paper US dollars and T-Bills (which are buying less and less as time passes) or something TANGIBLE that holds its value?
Same reason China is using those dollars to buy Australian mining companies, African farmland and anything else of real value..... they don't want to be stuck holding worthless paper. (and guess who IS buying T-Bills? The Fed..... somebody's got to keep the Ponzi scheme going...)
china mine their gold with military, truly a national security matter!
they really have an attitude problem... ;)
so far they mined 1,800 tons of gold inside china....
When China has its 10,000 tonne of Gold, it will be the reserve currency. They can't be far off that number now.
Oftentimes I’ve heard claims that gold and precious metals in general, have no value because, you can’t buy anything with them or you can’t eat it. It is never explained though that if the value of something was determined by whether you could eat it or not then a loaf of bread should be worth more that a handful of diamonds. Now don’t get me wrong, if we were to find ourselves stranded on a small island somewhere in the middle of nowhere, then yes a loaf of bread would be worth more than all the diamonds in the world, as there would be a survival issue. But since we live in a society where we exchange goods and services on a daily basis, the value of something is not determined only by whether you can eat it but by something else, and that is the labor and time that went into its making. It is a fundamental principle that the more work something needs to be made the higher it value. Gold is rare and therefore takes a lot of Labor and Time to locate, extract and process and all that time consuming, specialized labor is reflected in its value. Gold is not a store of value, as much as it is a store of labor and since it is not affected by time and external conditions, can maintain the value (Labor) stored in it indefinitely, thus allowing receipts (money) that are backed by it to retain their value, because they reflect all the productivity invested in the creation of the underlying asset. Theoretically Money could be backed by anything that takes a lot of Labor to produce but anything else, except precious metals, erodes and in time becomes useless, thus devaluing the currency that it backs. Fiat money has no intrinsic value because all it takes to produce it, is a printing press, cotton and ink, all easily and readily obtainable in huge amounts. Its only value is the convention that Governments accept tax payments in that form which doesn’t sound too reassuring to me. Those who disagree can and should trade their Gold, Diamonds, Jewelry and other valuables for Sacks of Sand.