Don't think there was any grand bargain in place. The dollar was strong for a long time so it made sense to hold USD as reserves.
When gold went up and USD down, the obvious occurred and is occurring. Countries are simply acting rationally, in their self interest. Some individuals, too. Not all, however. Though I have pushed it on my friends simply to see them prosper and/or retain the value of their wealth, most I fear think I am a bit of a crank.
Many fail to understand that the gold culture is a very strong thing in the East. Though also prevalent in the West, it lost its cachet after the decoupling of gold from currency, the prohibition against owning it and the imposition of a fiat price for decades.
The East is now buying with gusto and there is a global free market in it at the same time that the reserve currency is hitting the skids. In other words, we have a perfect macro storm for gold to go much higher.
You'll never convince short term traders, however. It takes a long view of things to see what is happening. Unfortunately, not everyone is capable of doing so. Plus, gold is 'weird,' the province of nutjobs and cranks and bugs, etc. |
