Money Loser: Okay, I get jewelry, investors, even recyclers… but what’s the real deal with central banks and gold? 

Money Maker: You’ve just found the deepest layer of the gold onion. Central banks aren’t just players in the gold market—they’re its guardians, watchers, and sometimes… manipulators. 

Money Loser: Manipulators? 

Money Maker: In the chessboard of global finance, central banks use gold like a secret weapon. Let’s break it down. 

Money Maker: At the core, gold is held by central banks as a reserve asset. Why? 

· No default risk 

· Universal trust 

· Liquidity in crisis 

· Diversification from fiat currencies 

Money Loser: So gold is like their ultimate backup? 

Money Maker: Exactly. It’s the fireproof safe. When fiat currencies wobble or lose trust, gold stands strong. 

Money Maker: Let’s rewind. From 1870 to early 1900s, many countries were on the Gold Standard. 

Money Loser: Meaning their currency was backed by gold? 

Money Maker: Right. Central banks held gold to issue money. If you had $100, it was convertible to a fixed amount of gold. 

Money Loser: What changed? 

Money Maker: Wars. World Wars I & II broke the system. Countries needed to print more money. Gold couldn’t keep up. So they moved to fiat currency—money backed by nothing but trust. 

Money Loser: So did central banks dump their gold? 

Money Maker: Some reduced, but many kept it. They knew one day, trust in paper might fade. 

Money Maker: In 1944, global powers met in Bretton Woods. A new system was born: 

· All currencies pegged to the U.S. Dollar 

· U.S. Dollar pegged to gold at $35/oz 

Money Loser: So the dollar became the new gold? 

Money Maker: Sort of. It was a gold proxy. Central banks globally held dollar reserves and gold reserves. 

……………………..more read