Steve Hanke: U.S. Dollar Weaponization Drives Rise in Central Bank Gold Purchases


Steve Hanke, a professor of applied economics at Johns Hopkins University, has recently discussed how U.S. policies have led to a surge in central bank gold purchases. According to Hanke, the weaponization of fiat currencies, particularly the U.S. dollar, has prompted countries to seek refuge in gold and move towards "de-dollarization."

Hanke's Perspective

In a recent interview on Jesse Day's Commodity Culture, Hanke, who is known for his criticism of Bitcoin and advocacy for dollarization, shared his views on the resurgence of gold as a reserve currency for central banks. He explained that the increase in central bank gold purchases can be attributed to several factors, including the rise in U.S. sanctions, the weaponization of the U.S. dollar, and a climate of uncertainty.

According to Hanke:

"You never exactly know what these central banks are going to do, but the trend right now is a lot of central bank buying, and the reason behind this is that there is a lot of uncertainty, everything has become more politicized in the realm of fiat money."

As a result, central banks that were not previously active participants in the gold market have now emerged as significant buyers. This trend is especially prevalent among countries in "de-dollarization mode," seeking to reduce their exposure to the U.S. dollar due to the increasing implementation of sanctions.

Influence of U.S. Policies

Hanke highlighted the growing utilization of sanctions since the 9/11 events, describing the trend as being "on steroids" under the Biden administration. He criticized this approach, referring to it as "utter stupidity," which has compelled countries like China and Poland to increase their gold purchases.

Poland, for instance, has traditionally not been a major buyer of gold. However, in line with its policy of holding 20% of its reserves in gold, the country has accumulated 105 tonnes of gold year-to-date, as confirmed by the President of the National Bank of Poland (NBP), Adam Glapiński.

Bullish Stance on Gold

The current situation has led Hanke to adopt a bullish stance on gold. Although he does not consider himself a gold bug like economist Peter Schiff, he believes that gold appears strong from a fundamentals perspective. Hanke sees the future of gold markets as promising, especially in the context of de-dollarization.


In conclusion, Steve Hanke, a professor of applied economics at Johns Hopkins University, has attributed the rise in central bank gold purchases to the weaponization of fiat currencies, particularly the U.S. dollar. He believes that U.S. policies, such as the increase in sanctions and the climate of uncertainty, have driven central banks towards gold as a means of reducing their exposure to the dollar. This trend has led Hanke to adopt a bullish stance on gold, emphasizing its strength from a fundamentals perspective.

Frequently Asked Questions

Is buying gold a good way to save money for retirement?

Buying gold as an investment may not seem very appealing at first glance, but when you consider how much people spend on average on gold per year worldwide, it becomes worth considering.

Physical bullion bar is the best way to invest in precious metals. You can also invest in gold in other ways. You should research all options thoroughly before making a decision on which option you prefer.

If you don’t have the funds to invest in safe places, such as a safe deposit box or mining equipment companies, buying shares of these companies might be a better investment. If you are looking for cash flow from your investment, buying gold stocks will work well.

You can also put your money in exchange traded funds (ETFs). These funds allow you to be exposed to the price and value of gold by holding gold related securities. These ETFs typically include stocks from gold miners, precious metallics refiners, commodity trading companies, and other commodities.

What is the best precious-metal to invest?

This question is dependent on the amount of risk you are willing and able to accept as well as the type of return you desire. Gold is a traditional haven investment. However, it is not always the most profitable. Gold may not be right for you if you want quick profits. If you have time and patience, you should consider investing in silver instead.

If you're not looking to make quick money, gold is probably your best choice. If you want to invest in long-term, steady returns, silver is a better choice.

What is a Precious Metal IRA, and how can you get one?

A precious metal IRA allows you to diversify your retirement savings into gold, silver, platinum, palladium, rhodium, iridium, osmium, and other rare metals. These precious metals are extremely rare and valuable. They are great investments for your money, and they can protect you from inflation or economic instability.

Precious metals often refer to themselves as “bullion.” Bullion is the physical metal.

Bullion can be purchased via a variety of channels including online sellers, large coin dealers, and grocery stores.

You can invest directly in bullion with a precious metal IRA instead of buying shares of stock. This means you'll receive dividends every year.

Precious metal IRAs do not require paperwork nor annual fees, unlike regular IRAs. Instead, you pay only a small percentage tax on your gains. You also have unlimited access to your funds whenever and wherever you wish.


  • The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (
  • Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (
  • Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (
  • If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (
  • You can only purchase gold bars at least 99.5% purity. (

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The growing trend of gold IRAs

Investors seek diversification and protection against inflation by using gold IRAs.

The gold IRA allows owners to invest in physical gold bullion and bars. It can be used for tax-free growth and provides an alternative investment option for those concerned about stocks and bonds.

A gold IRA allows investors to manage their assets without worrying about market volatility. They can also use the gold IRA as a protection against potential problems like inflation.

Investors also get the unique benefits of owning physical Gold, including its durability, portability, flexibility, and divisibility.

The gold IRA also offers many other benefits, such as the ability to quickly transfer the ownership of the gold to heirs, and the fact the IRS doesn't consider gold a currency.

Investors who seek financial stability and a safe haven are finding the gold IRA increasingly attractive.

By: Sergio Goschenko
Title: Steve Hanke: U.S. Dollar Weaponization Drives Rise in Central Bank Gold Purchases
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Published Date: Tue, 28 Nov 2023 08:30:34 +0000

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