Central banks like gold more than Treasuries

 

This is one of the most interesting charts this month. Central banks have kept more gold than Treasuries for an extended period until about 1997, when there was a switch to holding more Treasuries. This was the period of Bretton Woods II, when central banks increased their reserves as a measure to help defend their currencies in a crisis. Now, these central banks prefer gold over the safe asset of Treasury securities. There is a fundamental change in the perception or common knowledge concerning Treasuries as a safe asset.