Bears. Beets. Bullion: Central Banks Hoarding Gold Like Schrute Farms Hoards Beets!

Gold: The New Beet?

Attention world! Dwight K. Schrute Assistant Regional Manager (and volunteer Sheriff's Deputy) of Dunder Mifflin Scranton here to report on a matter of utmost importance: GOLD! It seems our friends at the European Central Bank (ECB) have noticed something I Dwight Schrute have known all along: gold is the superior investment. Like beets it holds its value and it's shiny. According to their fancy report gold is now the second largest global reserve asset right behind the almighty U.S. dollar. But for how long? I ask you! Soon we'll be measuring national wealth not in dollars but in Schrute Bucks...or you know gold bars. Same difference.

1960s Called They Want Their Gold Back!

These central banks are hoarding gold like Angela hides her cats! We're talking 1960s levels of stockpiling. I suspect this is because they’ve finally realized the wisdom of Dwight Schrute. Gold is a hedge against the chaos. When the world goes mad and it will gold remains. It’s like beet juice for your portfolio; it strengthens the foundation. Speaking of strong my cousin Mose could probably carry all this gold…if he wasn’t busy wrestling bears.

Euro vs. Gold: A Battle of the Titans (and One is Shiny)

Last year the euro was neck and neck with gold as a reserve asset. But now? Gold has pulled ahead! The ECB's own numbers show gold at 19% while the euro is a paltry 16%. That's what I call dominance. The U.S. dollar still leads the pack at 47% but I predict that this number will soon fall drastically thanks to the initiatives by Schrute Farms to build a trading economy based on beets gold and good old fashioned trust. The trust that comes from a beet farmer who has been known to be a volunteer Sherrif's Deputy at some point!

Why Are They Doing This? (Besides Listening to Dwight Schrute)

Central banks are snatching up gold as a hedge against inflation and to diversify. Smart! It's like having a backup beet crop in case of a locust plague. Plus they can sell it to prop up their own currencies when things get hairy. It's a power move and power is important. As Sun Tzu said and I often repeat 'Keep your friends close but your enemies closer.' And your gold closest of all.

Sanctions Suspicion and Shiny Things

The ECB claims that emerging and developing countries are drawn to gold because they’re worried about sanctions and the weakening influence of major currencies. Well duh! Gold doesn't care about sanctions. Gold doesn't care about tariffs. Gold just sits there being gold. Like a beet in the ground it patiently waits for the right moment to shine or in the beet's case be harvested! But even China India and Turkey are getting in on this action. They know what’s up.

Will the Gold Rush Continue? (Probably If They Know What's Good for Them)

Some experts are suggesting that central bank gold purchases might slow down. Madness! They should be buying more! Mark Haefele from UBS is right: diversify and hold gold. He's got the beet farmer's seal of approval. The rate of central bank gold purchases fell 33% in the first quarter? This is unacceptable! The ECB says the impact of geopolitics and demand on gold prices will depend on the 'stickiness of gold supply.' Stickiness? Like a beet covered in molasses? They need to listen to Dwight K. Schrute and the world would be a much better and richer place! Bears. Beets. Bullion.