For example, in the mid-1920s internationalnational demand for American assets such as stocks and bonds brought large inflows of gold to the United States.
Inflows of old gold jewelry and individual investor sales are especially strong in the United States and Western Europe, a new phenomenon for MKS, Mr. Shakarchi said.
After the gold standard was restored in the 1920s, central banks in surplus states like France (which had rejoined it at an undervalued exchange rate) sterilised the monetary effects of gold inflows so that prices did not rise.
Instead of allowing gold inflows to increase their money supplies (which would have expanded those economies but reduced their trade surpluses) France and the US began sterilising the inflows, building up hoards of gold.
Ben Bernanke, chairman of the US Federal Reserve, also drew a comparison with competitive devaluation in the inter-war period, referring to the sterilisation of gold inflows by France and America which helped them sustain large trade surpluses, but which also caused deflationary pressure on their trading partners, contributing to the Great Depression.
Companies are beginning to realise that if they choose not to restrict themselves the considerable inflow of talent is a gold mine.
Exchange-traded funds, which track the spot price of gold, had a stellar first half, recording inflows of nearly 580 tonnes.
Inflows into exchange-traded funds, which track the spot price of gold, reached a seven-year high, close to levels last seen during the Great Recession when the sovereign debt crisis was in full swing.
"In response to the positive growth and re-inflation that occurred after devaluation and suspension of gold convertibility, the Fed raised reserve requirements, the Treasury sterilised gold inflows, and there was a fiscal contraction.
