Every other day, I get a sprinkle here or there that some nation has bought “2 tons of gold”. Other news stories talk about some country taking their gold back and “repatriating” from another country. Look, I’ve only been involved in this sector for 2 years, so this is where I’m going to stay in my lane and ask for help. You guys who have been doing this 10, 20, 30 years – WHY would a country keep gold in another country? And…why would they take it back?
I have heard stories on the YouTubes about Germany wanting to take back gold from us here in the US and it took 7 years to do so. IF true, that is pretty troubling to understand why. All you have to do is spend time to research this stuff, and BAM, here you go. You, too, can be an expert in 5 minutes on if it took Germany 7 years to get their gold back.
- Here is an article from the Global Dispatch in 2013. I don’t know who they are, and the title seems sketchy with grammar – so I don’t necessarily trust the source to report on, but perhaps this might paint a picture of an overview. Seems a lot of German gold was stored outside of its borders to protect it from a Soviet invasion. OK. I dig it.
- The Trumpet – another outlet I know nothing about, writes that storing gold in NY makes it easy to liquidate and they moved 300 tons by 2016 and seem to not need to move more from NY as of 2017. Then they write something with a source as to why the gold wasn’t in Germany to begin with – “t goes back to World War ii. When the Allies finally stopped the German death machine in 1945—for the second time in 27 years—they purposed to ensure that Germany could never again destroy world peace. Forcing Germany to store its gold overseas was the primary financial mechanism preventing Germany from ever starting another war. As analyst Byron King noted, “One way for the U.S., Britain and France to keep a leash on Germany was to keep ‘German’ gold under control outside of that country’s borders” (Daily Resource Hunter, Jan. 22, 2013)…..As long as the Allies controlled Germany’s gold, the Allies had a conqueror’s insurance policy that ensured Berlin would not again disturb the peace. Without its gold, Germany’s currency and thus its economy, could be destroyed virtually overnight.” Could a sloooooooow walk over 7 years be insurance that another nation is not then using that gold to buy weapons of war? Seems a legit question.
- When you go to Wikipedia and look up gold repatriation, you get this link. This talks about a move that started about a decade ago to move gold from other nations back to the homeland. Then, it lists several countries who have been notable in doing it.
- This article from the Gold Eagle also talks about Germany’s plan to repatriate about 50% of their gold, so it wasn’t looking for all of it to come home. This, as well as others above, mention how the Germans asked for a full audit of their reserves and this was not performed by the US. All of these articles also state the plan was to be 7 years, but only took 3 and was completed in 2016. The article also mentions why you might have reserves abroad: “Practical reasons as it makes sense to have reserves in diversified locations so you have access to markets should you need to trade the reserves”. The article then writes: “In 2013 a Bundesbank spokesman said “we have no intention to sell gold” adding that the decision to relocate the foreign held gold “is in case of a currency crisis.” This article then states: “This leads on to security reasons. During the Cold War the Bundesbank wanted to keep its gold in the West in case of an invasion from the Soviet Union. It was also a way of supporting the country’s currency knowing there were reserves held securely abroad, should the country need to use them.” To me – it seems there’s a narrative by some that the gold was removed to prevent Germany from creating war, but the German narrative was to protect it from Russian invasion. Interesting. What then comes is this: “It was in the wake of the U.S. subprime crisis, the Lehman collapse and then the ensuing eurozone and global debt crisis in 2012, that prompted voices in Germany to call for an audit of the precious metal held abroad.” To me, this strikes a nerve as to why many countries started to want to re-patriate. Perhaps not trusting the books of the country holding it? This then talks about WHY: “By 2020, the Bundesbank intends to store half of Germany’s gold reserves in its own vaults in Germany. The other half will remain in storage at its partner central banks in New York and London. With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time“. But why the delays? It states: “Theories abound as to why this could not happen. But they all centre around the theory that the gold is not there or if it is it may have two or more owners in gold leasing arrangements…..The move to repatriate the gold to Germany was partly driven by rumours that much of the gold held offshore may have been “rehypothecated” as suggested by GATA.”
- You then have a CNBC piece in 2017 playing the TDS angle that the plan was hurried due to Trump confiscating the gold. It seems silliness to put this on Trump as many of the nations listed above all began their repatriation apparently in wake of the global financial crisis. This also seems to be congruent with the talk about BASEL and banks wanting to hold gold in reserves to strengthen their confidence in their balance sheets. The GFC definitely spooked a lot of countries into being more secure with their gold holdings, it seems.
Above, there’s a lot to unpack, but let’s look at a few highlighted bullets
- You could take a country’s gold to prevent them from building a war machine? Meaning, you potentially are depriving them from a money supply to pay for weapons – this is the 1940s view when gold was money
- You could hold your gold in diverse location to prevent from a rival country invading you and plundering your gold. Holding it in the US seemed like a legit strategy for many countries
- The global financial crisis scared a lot of countries into re-patriating their gold
- Rumors and perhaps factual evidence of re-hypothecation also scared countries who felt countries may be running fractional gold reserve scams and leasing out their gold.
- All articles seem to point that auditing is not possible under any regime.
- Central banks all appear to hold gold reserves as a form of money and protect and treat it as such.
As anyone reading this knows, we “severed” the tie between gold and USD in 1971. But what most don’t then realize is that no one actively teaches people that gold was money anymore. I have had 10 years of college, 4 of which were for an MBA at 3 different schools (moving is a bitch) and not one of them discussed gold or silver as money.
We have an entire generation now in their 20s gaslit to believe if they put $1,000 on a stupid crypto no one has heard of, they will be millionaires next week. One of my friends is relentless in telling me that I’m out of touch and “do not understand today’s markets” when I scoff at Tesla’s 390x P/E ratio. All of these people have been pushed away from the yellow brick road. All of them.
Who the hell can blame them? I remember the Occupy Wall Street movement 10 years ago, where kids coming out of college had no job prospects in the wake of the global financial crisis. Many of them got degrees they never used, and had to settle in other careers which may have been lower paying. With housing prices inflated beyond belief, the only HOPE half of my country even has to afford a 5% downpayment on one of these houses is near zero interest rates and striking it lucky with a dog coin meme stock or crypto.
And why wouldn’t they think this? I have to be getting too many followers now because the ‘coiner trolls are starting to add too much to my commentary. I’m all for your speculation. Have at it. Go for your 100x. But do not, for one moment, confuse your wild speculation with wealth preservation. In my hour long chat and slide show with Jim Forsythe at Citizens for Sound Money – I clearly laid out the difference with asset classes. Gold is not bought to moonshot, son. Gold is bought to preserve your wealth through generations. The fact that your speculation has gone up 10,000% in a few years simply means you are skilled at picking speculations – assuming you bought at $100 and not $68,000 and are a potential bag holder.
I bring all of this up because all of this is noise. Most aren’t aware that while you have coiners and boomers slinging shit at one another, you have 113 countries stocking up their central bank vaults with
bitcoin gold. This is because countries, nation states, and the uber wealthy KNOW gold is money and has spending power through thousands of years. And…if they feel there is a crisis coming, they want to take what spending power they have in whatever fiat derived notes they have and convert it to gold.
And this is what has been happening now since, approximately, the global financial crisis. Now, banks have always bought gold, but they also sold it at times too. At the top of this article, I wanted to point out why gold might still be left in NYC or London. It’s easy to sell and buy this market this way. If you have a pallet of gold and sell it to the French, someone just takes that pallet and slaps another country’s label on it and in the backend, the warrant for those numbered bars are moved from one owner to the other. Next month when you want to sell oil and buy more gold, you simply put an order in and your pile can grow back. To me, this is how nation states can do business with TRUST. Any nation can just print currency out of thin air, put it on pallets, and ship it to the Middle East to buy oil. This cash then goes in to their vaults for decades and erodes spending power. But not gold.
Which then brings me to where we are today. I wanted to spend some significant time here trying to post a lot of screen shots of countries buying gold over the years. Why? Because no matter what the CPI print does in a few hours, I want you to see what is REALLY happening, and not what is happening with stupid paper games.
But first, I want you to look at my SEARCH and then the RESULTS under NEWS in Bing. We are fucking doomed as a nation when all aspects of media are gaslighting you. Just let. This. Sink. In.
So now, what this means, is I have to try other browsers and specific search terms for countries. Ain’t that some shit.
OK – we now have Google news, a LITTLE better. You are getting warmer.
So let’s finish this with a bunch of screen shots and then I have to start my work day…setting this to be released for CPI time, but we’ll see what happens.