<p>The answer from the former Chair of the Federal Reserve is in a word: tradition.</p>

<p><a href="https://www.youtube.com/watch?v=2Dj9v9s9buk" rel="nofollow noreferrer">Chair Ben Bernanke testifying to the United States Senate.</a></p>

CC BY-SA 4.0
2019-05-09T04:39:52.047Z
2019-05-09T04:39:52.047Z
H2ONaCl
<p>Think of the following. Imagine the world suffers a major disaster. Chaos emerges. Rule of law collapses. The monetary system as we know it is destroyed. We could either go back to barter (and surely some will do). Or we can go back to a hard currency, like those in the past, where money was basically in the form of gold coins (and other metals). Thus, gold is, in that sense, THE SAFEST asset, because it will provide you with purchasing power in the case of a major civilisation collapse (and anything in between that and a mere currency crisis). Every kingdom on earth sought to increase their gold reserves (called mercantilism).</p>

<p>But this begs the question, so why gold and not for instance water (which is way more useful for life)? The answer is built upon several factors. One is that gold depreciates quite slowly (paper money however could be lost in  a fire). Second, it is easily storable and hard to steal on masse (unlike water). Third, is highly regarder by the rich and powerful (e.g. kings). But the most important reason is sociological. It's a selfulfilling property of gold. It is regarded by other people as the safest asset and therefore it becomes the safest asset. </p>

CC BY-SA 4.0
2019-05-09T04:43:05.493Z
I saw that movie. It looks like they bartered guzoline and mothers' milk and bullets.
H2ONaCl
CC BY-SA 4.0
2021-08-02T09:52:29.793Z
Hi, welcome to Economics:Stack Exchange. Please consider improving the answer by adding references from reputable and scholarly sources. As many other science stacks do, we require formal proofs, statistical evidence or links to external sources for answers making claims which are not common knowledge. Unsourced material can be edited or deleted. For more details see our [help center](https://economics.stackexchange.com/help/how-to-answer) and [FAQ on community standards for answers](https://economics.meta.stackexchange.com/questions/2113/faq-on-community-standard-for-answers)
1muflon1
CC BY-SA 4.0
2018-12-09T16:47:05.963Z
2018-12-09T16:47:05.963Z
chatGPT
<p>In my country, the only legal way to sell a gold bar is to sell it to the central bank. What are the reasons why some countries hoard gold bars? </p>

CC BY-SA 4.0
2018-12-06T15:57:20.790Z
anti-money laundering ?
mootmoot
CC BY-SA 4.0
2021-08-02T10:40:24.600Z
Take a look at how elastic the supply of gold is.
Rodrigo de Azevedo
CC BY-SA 4.0
2021-08-02T10:41:47.740Z
Related: https://economics.stackexchange.com/q/5489/8481
Rodrigo de Azevedo
<central-banking>
Why do many countries hoard gold bars?
lonestar
# Why do many countries hoard gold bars?

(Asked by: username_0 on 2018-12-06)

In my country, the only legal way to sell a gold bar is to sell it to the central bank. What are the reasons why some countries hoard gold bars?

**Tags:** central-banking
> **Comments:**
> **username_1**: anti-money laundering ?  
> **username_2**: Take a look at how elastic the supply of gold is.  
> **username_2**: Related: https://economics.stackexchange.com/q/5489/8481  

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## 2 answers

### Answer by username_3 on 2019-05-09. Score: 1

The answer from the former Chair of the Federal Reserve is in a word: tradition.

[Chair Ben Bernanke testifying to the United States Senate.](https://www.youtube.com/watch?v=2Dj9v9s9buk)


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### Answer by username_4 on 2018-12-09. Score: 0

Think of the following. Imagine the world suffers a major disaster. Chaos emerges. Rule of law collapses. The monetary system as we know it is destroyed. We could either go back to barter (and surely some will do). Or we can go back to a hard currency, like those in the past, where money was basically in the form of gold coins (and other metals). Thus, gold is, in that sense, THE SAFEST asset, because it will provide you with purchasing power in the case of a major civilisation collapse (and anything in between that and a mere currency crisis). Every kingdom on earth sought to increase their gold reserves (called mercantilism).

But this begs the question, so why gold and not for instance water (which is way more useful for life)? The answer is built upon several factors. One is that gold depreciates quite slowly (paper money however could be lost in a fire). Second, it is easily storable and hard to steal on masse (unlike water). Third, is highly regarder by the rich and powerful (e.g. kings). But the most important reason is sociological. It's a selfulfilling property of gold. It is regarded by other people as the safest asset and therefore it becomes the safest asset.

> **Comments:**
> **username_3**: I saw that movie. It looks like they bartered guzoline and mothers' milk and bullets.  
> **username_5**: Hi, welcome to Economics:Stack Exchange. Please consider improving the answer by adding references from reputable and scholarly sources. As many other science stacks do, we require formal proofs, statistical evidence or links to external sources for answers making claims which are not common knowledge. Unsourced material can be edited or deleted. For more details see our [help center](https://economics.stackexchange.com/help/how-to-answer) and [FAQ on community standards for answers](https://economics.meta.stackexchange.com/questions/2113/faq-on-community-standard-for-answers)  

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