Don't need to argue whether gold is high demand or being accumulated by whom.

Price of gold reflect the demand situation, this is the most solid fact.

High demand --> price soar

This is the basic fundamental of economy, supply & demand.

Repatriating gold has nothing to do with USD either.
it is not like US will pay the gold in USD as well when they repatriating.

1 ton of gold repatriating is 1 ton. Whether USD rise or plunge, it is still 1 ton.

Any fiat money is backed by nothing but confidence about the gov issued it.
There is no way everyone ditch USD, as worldwide trade majority is in term of USD, which is not going to change in short or near term future.
As long as worldwide major trade and economy needs US to consume their goods, no other alternative currency can be used widely, situation remain status quo.

Second largest economy, China RMB is not a freely trade currency internationally, so it poses problem for worldtrade to use it.

Gold is never enough nor feasible as trade medium, nor a good source as currency in any economy.

Currently, USD currently is one of strongest around, rise against all major currency, from Yen, Aud to RM.

Gold backed currency is never going to work well with economy.
Money need to grow to cater economy grow, gold backed money will hinder the grow.
Central bank will need to tell borrower, sorry doesn't have enough gold to back the new printed money, so cannot give property or car loan to you, so people cannot buy car/property, here goes the economy.
Your boss will tell the employee, hey bank doesn't find enough gold to back new money created, so cannot give payrise.

Gold backed will beneficial to the gold bug, and saver, no doubt, but it doesn't work well with general economy.

Price is the equilibrium of supply and demand, whether the gold futures is cash settled or take delivery, it makes no different.

When everyone agree gold per ounce is USD1200 as in the futures, then it is the demand and supply equilibrium.
Actual physical gold trade does follow the futures market pricing speaks all.

Most countries own treasuries, so technically it is US "owe" them, not the other way round.

Yup, if domestic corporate/company issue USD denominated bond or borrow USD, they need taking into account into their P&L, so we would see some forex loss in their account if USD rising whilte company has USD denominated borrowing.


But for country front, you repaid your foreign denominated borrowing through your foreign currency reserves, they won't accept your currency (small countries) so if you don't have USD in your foreign currency reserves to repay your borrowing in USD, you are "doom, and need to seek IMF help generally.

It is silly to borrow from outside or USD which is not your denominated currency.
1997 crisis has taught many countries especially Asian borrow money or issue bond in foreign denominated currency is a risky game to play.

Most countries since them fund their budget deficit through own currency, so no effect on USD rising or not.

If there is only 100 ton of gold in Malaysia to back RM, it means there only will be 120 billion RM (1 ton worth 1.2 billion based on RM120k/kg) available in the economy, cannot print more.
So you are limiting money that can be possessed by public at 120billion.

The 120 billion only circulating around, no more no less.
When someone has made profit 1 million, somemore need to loss 1 million based on the limiting supply of money.

When you produce goods like car, house, there is only 120 billion available to buy the goods.
If you produce more than 120 billion, nobody have the money to buy it.
So any extra goods produced will be no buyer, aka no one want to produce more, how can your economy can growth when nobody can buy the extra goods you produced?

Economy growth because you produce more goods/services, which needs to be consumed by extra money created through loan multiplying effect and extra printing by central bank.

But with gold backed currency, cannot create more money if no gold, so no loan can be given. No loan given, no extra consumption power, hence no economy growth.

Payrise, the boss needs to generate extra money to pay for it, same scenario with extra goods produced.
If the whole economy has fix money available, means the boss cannot produce more goods, so the boss need to pay from his pocket instead of business that generated more profit.
Every year keep on payrise from boss pocket, boss goes broke, company closed down. (aka zero sum game as mentioned, some one need to lose 1 million before other get extra 1 mil)

Deflation and inefficiency of the system is 2 different front and totally unrelated to corruption issue.

Gold backed currency has nothing to do with corruption.
Corruption still can happen with gold backed currency.

A gold backed currency is just good to limit the currency supply, aka remove irresponsible central bank that print money rampantly until become "banana money", it doesn't remove inefficiency nor corruption, nothing else.

Deflation is bad for everyone except those has been saving enough or cash rich people.

So deflation will actually hurt poor people more because they may be jobless, loss of income to support their daily life, while rich one has enough money to survive through.

It is different issue together, whether one can use the ability to print money at your advantage or not.
We are talking about gold backed currency impact on economy, which is unrelated to corruption.

Can print more money /= corruption
Cannot print more money /= removing corruption or removing chance to gain advantage by someone.

Recession does occur from time to time, which is an essential part to remove inefficient.
Even you have the ability to print money at no limit, it doesn't guarantee prolong boom.
Public will lose confidence on your money if you print excessively, once confidence lose, there goes your economy as well.

Zimbabwe prolong boom?
Banana prolong boom?

No, instead it is the other way round.

Bro, you don't know what you are talking about.

If worldwide use gold backed currency, then the money worldwide is fixed at an amount, capital inflow from A to B, B to C, doesn't increase the money supply.

Last time, there is enough gold to back the limited currency in circulation, so gold backed no problem at all.
eg. US had 1000 tons of gold, which equivalent can back let day USD100 billion, while economy size is just 50 billion, no issue, money still can create more.

The world economy does "fly" after removing the gold backed back in 70's.
The world developed fast since after 80's and general public has a better life across.

Last time, in 70's, 80's, you need to beg employer to have a job, those having a job is considered luxury and most people live in poverty.
If want to use gold backed, economy cannot grow, hence people have no chance to escape poverty, rich people remain rich, poor people remain poor.

Japan is facing deflation issue, no inflation.

Why Japan economy is in poor shape?
Because of deflation.
As said, from consumer and rich people, deflation is good, as can pay less.
But in term of macro economy, it is bad, factory has no incentive to produce more. Less profit can be made due to price goes down, less profit, no expansion, no payrise, no new hiring which eventually will haunt back the general public as consumer in term of income power (having a job to generate income)

If printing money can polong boom, Japan already booming non-stop, as since after 80's, Japan already underwent many round of QE or money printing already, instead we see stagnant Japan economy for decades.

Everyone already try to get rid of USD, but only limited success.

If you doing import export, a lot of stuff still quoted in USD, any payment made in USD.
Our company just recently made enquiry to China machinery company and receive quotation which all quoted in USD and payment is USD.

Gold is not a money nor currency but another asset class which investors can diversify into.

Properties can store value, land can store value, share can store value, oil/iron ore/besi buruk also another one can store value, so does gold, silver, copper etc.

You don't understand the consequences, as you only see from consumer pov.

You need to take a macro picture.

Imagine you are manufacturers, seeing your produced goods price dropping, profit shrinking or worst become loss, what you will do? Stop hiring, retrenching employee, which lead to people jobless no income. People no income cannot consume lead to spiralling down effect.

Taking loan without money involved?
Bank has no money how to give loan?

A deposit Rm100 in bank, bank take RM90 to loan to B to buy car from C

A has RM100,
B has a car
C has Rm90

How much money available out there?
RM190.

That's why you don't see Nokia brand anymore.

Whenever you deal with product that falling in price especially technology one, business is very competitive, and once you lose out market share and leading edge, every quickly fall into struggling territory. There are plenty of company/business died down in phone and computer industry, just it is not in public eye, so public do not know the issue.

Price go lower, I as consumer also happy to see, but in term of macro level, it is hurting the economy.

Price deflated until manufacturers decided to close down, retrench time, people have no income, instead can buy thing cheaper.
No income, how to buy more stuff?

Just take this scenario, there is Rm100 availabe in the system.

9 rich one hoarding RM11 each, total RM99 in their hand, left Rm1.

So you forever stuck with RM1, never will be rich.

Nikkei is still only 50% off its peak.

Also Nikkei is doing well, bounce off 50% from low because exporter profit more due to USD.

A booming stock market indices, doesn't necessary reflect how well the GDP growth.
Japan now official in recession, GDP growth negative 2 Q (-7%, -1%), but stock up 50% from its low...

QE more money available to pour into stock market.

Japan is the classic example, money printing /= booming economy.

Economy doesn't work in single loop but infinite loop.

So countries less productive see all capital going out until zero?

Bigger picture is very simple for fixed amount money.
When start,
A country has 1 bil
B country has 1 bil

B capital keep on flowing to A due to so called more productive, every month flow 100 mil, at the end of 11th month, B has no money, while A maximum can have is 2 billion.

So if US is productive, all gold inflow to USD, the rest of world eat what? No gold, no money.

My money definition.

Money = medium of exchange that enable to buy whatever we want.

Gold cannot buy car, house, unless being converted into RM or USD.

While other want to have other definition, I also cannot argue about it.

Yes, look at those antique stuff, worth millions a single piece.
Everything has a value and store a value, besi buruk also store RM0.90 per kg value.
Pebbles also store a few RM per kg, I believed.

I don't see crude oil quoted in the futures market in SGD.

Yuan is not an international freely trade currency like USD.
Until Yuan become free trade worldwide which is not at the moment, there is obstacle to use Yuan.

I don't deny is a historical "value" asset, but it is not good money (medium of exchange) or being used as to back currency.
Currency, money needs to have limitless upside for modern economy to function, while gold quantity if fixed in this world.

Yes, paradigm change and USD may be less as a force in the old day, but up until now USD is still the one major currency traded in the world, and not going to chance soon and there is no other major alternative can replace it.
By right, second largest economy China, its currency should be challenging it, but Yuan is not international freely traded currency, so the option is not there until China opens up the Yuan, which I don't think China willing to do so at forseeable future.

Debt can be perpetual as long as you can service the debt interest, and sufficient cashflow to support the debt.

Debt can be solved by inflation.

No one will ask the debt being paid entirely at anytime.

Banker doesn't wish to see borrower pay down the debt entirely, and raise no debt.
Bank can go broke if everyone repaid their debt and no one borrow.

So does countries front, no one want to see US repaid back its trillion of treasuries.
Received trillion of USD, what to do with it? Nowhere to keep as well.

As long as debt is manageable, serviceable, and supported by income, it is not a big deal.

1st generation, raise 1 billion debt
2nd generation raise 2 billion debt to repay the 1st generation
3rd generation, raise 3 billion to repay 2 billion.

In between have income to support/service the debt, the debt become perpetual just like treasuries, sovereign bond.
And over the time inflation solved the growing debt.

When Korea trade with China, yes they can by pass USD.
But what currency they want to use as payment?

RMB? I don't think Korea company want RMB as not freely traded currency.
Won? I don't think that something China company prefer.

Yes, swap agreement can get rid of USD, but everytime there is need for a deal for it, not something as convenience as USD that is freely traded around the world.

As already said, USD may not the sole international trade currency like the pass, but one cannot deny USD is still the major trade currency around the world.
Countries still need USD to pay their import.
The one in denial mode is USD is still an international important trade currency.

Saudi export oil, they want being paid in USD.
So does majority export countries including Malaysia.

This is flawed.

Both Rm100 and RM90 should be backed by gold, if adopted gold backed currency.

It is impossible to differentiate the RM100 is original and RM90 is not.

Gold backed currency basic is
when you pass back the RM100 or RM90 to central bank, they return you with equivalent amount of gold, aka like Rm100 = 0.8g of gold.

Just like you pocket has RM100 note and Rm50, someone tell you RM100 is original while Rm50 is backed by outstanding loan?