‘Black Swan’ Author Says Gold is the Real Play in the De-Dollarization Trend

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As a researcher with a keen interest in economics and finance, I find Nassim Taleb’s insights particularly intriguing, given his extensive background in risk analysis and probability theory. His work on black swan events has reshaped our understanding of unexpected events and their impact on systems, making him an influential figure in the field.

Discussions about de-dollarization are overlooking a crucial aspect, argues Nassim Taleb, who advocates that the primary consideration should be gold instead of currencies or digital assets.

Nassim Taleb is a renowned writer, thinker, and former trader, best known for his expertise in risk assessment, probability, and unpredictability. He rose to fame through his book series titled Incerto, comprising “The Black Swan”, “Antifragile”, “Fooled by Randomness”, and “Skin in the Game”.

In his book “The Black Swan”, Taleb presented the notion of black swan occurrences – uncommon, hard-to-foresee events that carry significant impacts, which people often attempt to justify after they transpire. His theories contradict traditional views in economics, finance, and philosophy, specifically concerning the constraints of prediction and the significance of resilience in structures.

Taleb stated on X that although the global attention is primarily on trade agreements and digital currencies, the significant shift seems to be towards gold. He highlighted how central banks, especially those in BRICS countries, are significantly increasing their gold reserves, with a remarkable 30% yearly growth observed.

It seems that people aren’t fully grasping the ongoing “de-dollarization” process. This isn’t primarily about trade settlements. Instead, central banks, especially those in BRICS countries, have been accumulating gold, using it as a store for their reserves. In fact, gold has increased by nearly 30% compared to last year.

— Nassim Nicholas Taleb (@nntaleb) September 11, 2024

Drawing upon Taleb’s insights, I’ve noticed that Luke Gromen, the founder of Forest for the Trees, has shed light on a gradual yet significant change that’s been unfolding over the past decade. This transition has been subtly brewing, and it gained momentum following the freeze on Russian assets post-Ukraine invasion. This event amplified apprehensions about owning U.S. Treasuries, thereby propelling a surge towards gold. As Kitco News points out, this shift mirrors an increasing unease among central banks regarding the dependability of U.S. debt as a safe haven for value storage.

As a crypto investor, I’ve been keeping an eye on recent Kitco reports, and they’ve caught my attention with insights from analysts like Angelo Giuliano. He’s suggesting that countries are shifting their strategies, opting to purchase gold instead of U.S. debt. Intriguingly, he compares the U.S. dollar system to a Ponzi scheme.

Kitco reported findings from the World Gold Council indicating that approximately one-quarter of central banks anticipate expanding their gold holdings over the next year. This trend moving away from the U.S. dollar is projected to persist, as nearly two-thirds of survey participants expect the greenback’s portion in total reserves to decrease within the next five years – a percentage that has grown from 55% in 2023.

As an analyst, I’m anticipating that the upcoming interest rate reduction by the Federal Reserve will likely fuel a surge in gold prices. According to my analysis, Ewa Manthey from ING shares this viewpoint. She predicts that gold prices could average around $2,580 per ounce during the last quarter of 2024 and maintain an upward trajectory well into 2025.

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2024-09-13 22:45