CEO drops a bombshell: India’s middle class is betting on paper while elites hoard gold

Central banks are snapping up record amounts of physical gold — while retail investors cling to paper promises.

Last year, central banks added over 1,000 tonnes of physical gold to their reserves, the most since 1967. China doubled its holdings to 2,300 tonnes. Russia now holds more metal than U.S. dollars. Commercial banks in Shanghai have increased their gold reserves 13-fold in just two years.

Jatin Modi, Global CEO at Renaissance, highlighted this shift on LinkedIn, warning that institutions “are betting against their own product” by hoarding gold instead of the currencies they print.

“You're still buying database entries,” he wrote. “Only one survives Systemic Failure.”

Modi draws a historical parallel to 1815, when Nathan Rothschild, then head of Europe’s largest bank, defied market optimism after the Napoleonic Wars. As other financiers bought bonds, Rothschild turned to gold. “The paper scheme cannot last,” he wrote to his brother Carl, recognizing that confidence — not contracts — props up empires.

The pattern, Modi argues, is repeating. “Every institution that creates money is accumulating what cannot be created,” he said. Meanwhile, retail investors choose gold ETFs — digital claims to metal — over owning physical gold. These instruments, he notes, expose holders to the very systemic risks gold is meant to hedge.

“The Dutch believed their guilder was too embedded in global trade to fail,” Modi observed. “But their empire evaporated.” The U.S. dollar, he implies, may not be immune.

Despite the complexity of modern finance, Modi suggests a brutal simplicity underpins current moves: central banks are preparing for collapse by retreating to gold, an asset that predates every financial system now in place.

“We prefer beautiful lies to ugly truths,” he wrote. “But every central bank on Earth is buying the primitive while the financial system sells us the sophisticated.”