100 Grams of Gold and A Barn Full of Cows
100 Grams of Gold and A Barn Full of Cows by Rory, The Daily Coin
Probably very few people in the Western world can pronounce Kyrgyzstan or identify it on a map. As a member of the EEU and SCO, Kyrgyzstan is a well respected and probably well known nation to the people in the Eastern world.
The current National Bank Governor, Tolkunbek Abdygulov, has a desire, a “dream”, for all 6 million citizens to own 100 grams of gold (approximately 3.5 ounces). The National Bank of Kyrgyzstan has been adding to their official gold holdings since mid 2015 and it appears their acquisitions are not going to slow down.
“Gold can be stored for a long time and, despite the price fluctuations on international markets, it doesn’t lose its value for the population as a means of savings,” he said in an interview. “I’ll try to turn the dream into reality faster.” Source
The National Bank is not only encouraging it’s citizens to own gold it will be happy to buy the gold back from it’s citizens making it all the easier for people to hold physical gold as they will always have a buyer when the need arises. The citizens have been responding, about 140 kilograms have been acquired by the citizens. So, as a member of two very gold friendly trade organizations it appears Kyrgyzstan is preparing for a future that involves gold trade. It is well known that China has been encouraging it’s citizens to acquire physical gold for close to a decade.
Kyrgyzstan produces about 20 tons of gold annually so, getting 100 grams into the hands of all 6 million citizens will take some time. Governor Abdygulov is not saying how long he believes it will take his “dream” to come to fruition but he is putting all the necessary policies in place to make it as easy as possible.
The National Bank has been on gold buying spree since 2014 and it appears 2017 will be no different.
As Abdygulov took the reins of the central bank in 2014, Kyrgyz policy makers decided to raise gold’s share in its own reserves, now keeping about 10 percent of its $2 billion holdings in bullion. After years of capping the amount at 2.6 tons, the stockpile surged by more than 70 percent since 2012 to 4.5 tons at the end of the third quarter in 2016, according to the latest data compiled by the London-based World Gold Council.
Here is another example of a nation actually looking out for it’s citizens and changing policies that help the citizens to be in a better place. When you move from owning and trading cattle as a currency to owning and trading gold, the impact on the overall overall economy and individual households could be significant. I’m not sure that a company outside Kyrgyzstan would be willing to accept cattle in trade for goods or services. It could happen, but it would be a one-off situation, but with gold there would be no question as to the value of the trade and few restrictions as to making the trade possible. But if you are trading cattle there are any number of questions surrounding value, quality of livestock and the list goes on and on.
“We are hopeful that our country’s population will learn to diversify its savings into assets that are more liquid and — more importantly — capable of retaining their value,” he said. In rural areas, cattle is still the asset of choice for investors and savers, according to Abdygulov.Source
The thing is, we, the Western world, are referred to as “the developed world” as nations like Kyrgyzstan are called “emerging” or “3rd world”. It seems backwards. It seems the nation of Kyrgyzstan should be considered the developed world as this nation is moving from one true asset as a form of currency and savings (cattle) into another true asset (gold) as a form of currency and savings. At the end of the day I would rather have a barn full of cows than a mattress full fiat currency. At least with cows I know I have something; whereas with fiat currency what do you really have other than a promise of more debt from a corrupt government.