French Opposition Party, The National Front, Makes Gold Repatriation Request
Fractional American Gold Eagles in 1/10, 1/4 and 1/2 oz Sizes for Smaller Budgets
Gold News From Around The World
Gold is big news around the world, except in the United States. We mentioned in “The Importance of Gold to Nations and Individuals” that neither the United States government, the United States Federal Reserve nor the American public in general has any interest in gold.
Indeed, gold has not been mentioned in any of the speeches or un prompted public utterances of any Federal Reserve President with respect to monetary policy for years. The focus in the U.S. is not the price of gold or how much gold the U.S. or any other country has, but what the Federal Reserve might do with respect to manipulating interest rates or launching another round of quantitative easing.
Here is a recap of gold news around the world the past few weeks:
The Netherlands Repatriates 122.5 Tons of Gold From the New York Federal Reserve
On November 21, the Dutch Central Bank announced that they had repatriated 122.5 tons of gold from the vaults of the New York Federal Reserve.
The amount repatriated and the reasons given by the Dutch Central Bank were instructive:
“With this adjustment the Dutch Central Bank joins other banks that are keeping a larger share of their gold supply in their own country.” “In addition to a more balanced division of the gold reserves…this may also contribute to a positive confidence effect with the public.”
While Keynsians and other central planners like to dismiss gold as a “barbarous relic” the repatriation by the Netherlands of a large portion of their gold reserves shows that gold is still an important component of the monetary system, which in great part, exists on the confidence of its participants.
The Dutch repatriation of its gold follows similar repatriation/audit requests from countries holding gold outside their borders including Germany, Austria, Switzerland (pursuant to a populist referendum Save Our Swiss Gold) and Venezuela (repatriation completed).
Opposition Party In France Sends Gold Repatriation Letter to the Bank of France
In France, the National Front, a leading political party, sent an open letter yesterday to the Bank of France requesting that France audit and repatriate their nation’s gold.
The letter included a request for a comprehensive audit of France’s 2,400 tons of gold, noted the Save our Swiss Gold referendum, noted the Netherlands recent repatriation of some of their gold, complained of the Bank of France’s sale of more than 600 tons of gold in the 2000’s, requested an immediate halt of further gold sales, requested repatriation of France gold and requested that the Bank of France keep 20% of its reserves in gold.
Save our Swiss Gold Referendum – November 30, 2014
In Switzerland there is a referendum scheduled for a vote November 30 called “Save our Swiss Gold” that would require the Swiss National Bank (SNB) to repatriate the country’s gold holdings and to keep 20% of their reserves in gold. The SNB is against the proposal and has called it dangerous.
A “yes” vote on Save Our Swiss Gold will have a direct impact on the SNB’s ability to conduct monetary policy which recently involves printing francs manically to buy Euros to artificially lower the value of the Franc in order to keep a 1.2:1 Franc to Euro ratio. The price of gold should benefit from a “yes” vote.
The most recent poll shows the “No” vote in the lead by 47%- 38% with 15% undecided.
Russia Adds 150 Tons of Gold to its Reserves in 2014
Russia has been on a gold buying binge in recent years and announced this month that is had purchased 150 tons so far in 2014.
Forbes recently suggested that Russia was accumulating gold because it was stuck with buying its domestic production due to sanctions that cut Russia off from its markets. This is false.
Russia’s increasing gold hoard is part of their de-dollarization strategy which was in place long before any sanctions were placed on Russia in response to their actions in Ukraine and Crimea. Indeed, the chart below shows that Russia began its current gold buying binge in the late 2000’s.
Here is a statement made by Russia’s Central Bank First Deputy Chairman Alexei Ulyukayev in January 2013 regarding Russia’s gold acquisition strategy long before any sanctions were imposed on Russia and even longer before any Russian action in Ukraine or Crimea.
“We are buying metal and will continue to pursue this course,” “This is a course of asset diversification in a situation when investing in securities or deposits remains risky.” Alexei Ulyukayev
We have been reporting on Russia’s increasing monthly gold reserves since May.
Here is the most recent update:
Russian Gold Reserves – October 2014
Russia added 600,000 ounces of gold to its reserves in October.
European Central Bank
European Central Bank Contemplates Gold Purchases
In light of the European Central Banks perception that deflation is a threat, President of the ECB and others at the bank are opening speaking about making assets purchases which may include gold.
According to a Bloomberg report:
ECB President Mario Draghi said yesterday that unconventional measures may include the purchase of a variety of assets to stimulate the economy. The central bank could theoretically buy sovereign debt, gold, exchange-traded funds, and even real estate to counter a longer period of low inflation, Executive Board member Yves Mersch said.
China Continues To Produce and Import Massive Amounts of Gold
China has been producing and importing more gold than any country in the world for the past few years. Indeed, by choice, China does not export any of its gold (although some gold leaves China via the black market).
Here is a chart showing Chinese gold production and import activity.
Chinese Gold Production and Imports 2000-2013
China has been the world’s leading gold producer and importer the past few years.
The Shanghai Gold Exchange, is a physical gold exchange where increasing amounts of physical gold is being traded. In 2014, the Shanghai Gold Exchange has delivered nearly 1,800 tons of gold through the week ended November 14.
The chart below shows the growth of the Shanghai Gold Exchange.
Shanghai Gold Exchange Gold Deliveries 2009-2014
The Shanghai gold exchange continues to deliver massive amounts of physical gold with 52.26 tons delivered for the week ending November 14, 2014.
How Much Gold Does China Have?
Chinese Gold Reserves Estimated at 16,000 Tons
According to the World Gold Council, China has about 1,000 tons of gold. Gold researcher Koos Jansen, however, thinks otherwise. In published work with supporting methodology and documentation, Mr. Jansen shows that China may have nearly 16,000 tons of gold or more than twice the amount the United States supposedly owns.
Koos Jansen’s research shows China has far more gold than is officially reported.
The amassing of gold by China and Russia creates speculation that either might revalue gold or back their currency by gold or both.
Greenspan on Gold
In late October, Alan Greenspan stunned the gold world with his uncompromising pro gold comments. The former Chairman of the Federal Reserve stated unequivocally that gold was a good investment that would rise “measurably” and further stated:
“Gold is a currency. It is still by all evidences the premier currency where no fiat currency, including the dollar, can match it.”
Alan Greenspan Makes His Points About Gold at the Council on Foreign Relations
Click here to see the entire Greenspan interview.
Gold activity in India recently has been muted due to government duties on imports. India recently, however, according to the World Council regained the top spot from China as the world’s largest gold consuming nation.
We will have a a more detailed special report on gold (and silver) in India shortly.