To say that events are now taking place at the speed of light is an understatement. It was just last Monday, I wrote a missive entitled “The Mother of all Bank Runs“. In it I wrote about the German and Dutch repatriations of gold which was then followed by the Belgians beginning discussions on the same topic. As a final speculation, I mentioned that “logically the Austrians would be next.” There was no way you could have told me it would be less than one week until the same news would actually come out of Austria! Unlike the Germans, Dutch and Belgians who have gold held in N.Y., Paris and London, Austria holds 80% of their 280 tons of gold concentrated in London. This is truly big news for several reasons which we will explore and it certainly brings up a few more questions.
These four countries represent the core of the European Union. The EU is located in Brussels and the ECB is located in Frankfurt so the “power centers” (or financial centers) if you will are located within this “block” of countries, let’s call them the “Nordic bloc”. These four are the strength of the euro, they are the highest rated credits and for the most part they alone dictate policy. …And now, ALL of them will be asking for their gold to be returned to them. The same questions I asked last week still apply, even more so now because of the addition of Austria. Why do they want their gold returned and why now? There are other questions which we can look at shortly.
First, “why?” Why is there all of a sudden this rush by Holland, Belgium and Austria to follow Germany’s lead in asking for their gold back? The obvious answer is trust, or better said, lack of trust. For years there have been questions as to whether or not “official gold” has been leased into the markets. These questions have arisen because of the simple math of supply and demand. If China, India and Russia have been gobbling up 100% of current mine supply… then where is the supply coming from to meet the demand from the rest of the world? If there was no trust issue whatsoever, these central banks would not “bother” with where this gold is being held because it brings up questions central banks would prefer you not think about. These questions would obviously include “why” move the gold if it is already “safe?” It also brings up the question of why bother if gold is really not important in today’s financial world …as many central banks will have you believe.
You see, for central banks to ask for their gold must mean it has some importance to them, right? For that matter, why have these countries not asked for dollars, pounds or euro’s (from France) for the values of the gold held? Why are these central banks asking for the actual metal? The answer of course is because they know gold is real money and there is no substitute… in other words, there is nothing “as good as gold” when it comes to money. I cannot stress enough how big these actions are because these are central banks bringing publicity to gold in a manner showing just how important the gold really is to them! Let’s move on to other questions rather than rehash last week’s missive.
Why and why now are the main questions but I believe these two are wrapped up by “why these four countries?” What this obviously leads us to is the very real potential that the Eurozone which is an imperfect union, will now be “split table!” These four countries are the center of the “have’s” with the rest of Europe being “have nots” for the most part. These four country’s gold reserves amount to roughly 4,000 tons. Officially they would be number two in the world behind the U.S., assuming the U.S. has not already divested their gold (I believe we have), “unofficially” this 4,000 tons would make them number two behind China if you believe they 8,000 tons of gold or more (which I do).
These four countries with reserves of 4,000 tons will have the ability to set up a northern or “Nordic euro” …especially if China revalues gold and re sets the world’s financial system which looks very probable in my eyes. Repatriating their gold also does something else which few have thought of so far. Actually having their gold in hand may just allow them to purchase energy from Russia. Remember, Russia is testing their own clearing system to bypass the West’s SWIFT system. Would Russia possibly refuse Western currencies for their energy exports if they had a system up and running which could clear rubles and yuan? You bet they would, especially during a time of financial war. Is gold a western currency? Is it an eastern currency? No, gold is the ULTIMATE currency, even Alan Greenspan concedes this!
This theory of a possible European breakup into northern and southern euros has more legs if Russia were to accept the new Nordic” for trade but refuse the “southern euro.” Would Russia have more “confidence” and thus be more likely to accept the northern euro …if it is supported by gold? Gold that is actually accounted for and held within these countries own vaults as opposed to vaults controlled by N.Y. and London?
The answer of course is “yes” but it also brings up another question which has a very humorous answer! For a little background before I ask the question, do you remember why all of this gold was moved to London and New York all those years ago? That’s right, there was a fear Stalin or one of his successors would roll tanks across Europe and take the gold …so the further away from Russia this gold was …the better! Fast forward to present day, isn’t Mr. Putin and Russia the “scary and aggressive” potential invaders of Europe? Why would these countries want their gold within their borders at this EXACT point in time if they have any worries of an aggressive neighbor called Russia? Does this make any sense at all? It does, and the humor is that these four countries apparently trust Mr. Putin and Moscow more than they do the U.S., Britain and the West!
Let me wrap this up and speculate a little as to what I believe is happening because it is clear something IS happening. It can be no coincidence these four core European countries want to repatriate their gold. It is also clear this action signals a change of some sort in their “relations”. For this “block” of countries (which is exactly what I believe they will be seen to be) to remove gold from the West and placing it within marching distance from Moscow tells me they trust “us” less than they fear Russia. I also believe they know where this whole game is headed and who is leading it. I believe China will back their currency with a “re marked” price of gold with Russia as their right hand energy man. The game is going toward gold, not away, this Nordic group is simply positioning themselves for when the starting gun is fired.
While the West has tried to “isolate” Russia, we will have succeeded only in isolating ourselves and creating the “cause” for a run on our own banking system. I am not talking about the paper Ponzi scheme banking system as this will also fall, I am talking about an old fashioned and REAL run on the bank! This “run” started slowly and ran for years as China accumulated what we foolishly “gave away”. Now, it looks like the “run” is accelerating and the “core four” are taking the attitude “he who panics first panics best!” None of this had to happen but it has and is, simply because the West has done dirty business and ruined credibility. There is absolutely no rationale whatsoever for these banks to ask for their gold back if it is truly safe and they have full and complete faith in the U.S. as custodian and enforcer of the rule of law.
Please understand, the “core four” IS Europe. Other than Britain, Europe is supposed to be America’s number one ally. It is obvious allegiances all over the world are changing. It is also obvious what is considered as “important” as far as money and currencies are concerned is also changing, otherwise these countries would accept dollars in lieu of their gold. The West has bled gold, trust and thus credibility while the East (and new northern Europe partners?) has accumulated gold, trust and thus also credibility. “Power” has always followed gold wherever it went. If gold is leaving London and New York, it is for a very good reason. I believe we may very well see a “Nordic euro” that trades primarily with Russia and China as opposed to the U.S. and Japan. No one has ever run their bank “just for fun,” there has to be a reason. I can see no reason for these four countries to act in unison on this issue unless trust is being questioned and/or a break away from the other deadbeat EU nations is planned …we will see shortly.
Regarding austrian gold, if they decide to take back home, it will take several months if not a few quarters.
In the meantime we know why CME increased daily limits for gold/silver when one looks to silver action today : a big rise followed by double lager take down !
no, you are quite wrong on this. If the gold exists, it can be shipped easily within a week. A Boeing 747 cargo plane will hold 123 tons, thus merely 3 planes could carry it all and within hours from London.
Yes but will London agree ?
if they disagree, it will be called “default by theft”.
It will be called “default by theft” by whom? And so what? Germany is not getting it’s gold back and there has been no consequence. I also read the msm and no one cares except for a few gold bugs. It does not matter, until it does. And I have not read one person who has been able to predict with any accuracy when gold will start to matter. As far as I can tell, only two central banks have actually asked for their gold, and only one has received it.
Venezuela and Holland seem to have gotten theirs and there is also further movement by FRBNY (German gold). Maybe it “doesn’t matter” now but it without a doubt will when the time comes to lay cards on the table.
I have been living in western europe for decades : 99% of their political people in charge and banking lords and just bowing to anglo-ideology and anglo masters.
Western europe and especially germany and France are just their slaves.
It will change when anglos would have dismissed by their own demise, contradiction, failure.
If London say no gold, well it will be no gold and shut up…
“If London say no gold, well it will be no gold and shut up” …looking in the rearview mirror.
You nailed it, Bill!
However, I think you may want to add Finland and Luxembourg to the block. Finland is also causing Draghi troubles and Luxembourg suggested a few weeks ago that the ECB should consider buying gold.
Also consider that former Dutch FM De Jager revealed they made preparations for EurExit in 2012 in close cooperation with Germany, as I posted at TFMR aling with links to sources:
Now if they prepared for EurExit in 2012, “just in case”, would you think they’re not prepared now?
Of course not!
In other words: EurExit for DE, NL and/or AT, FI and BE is not a question of “if” but of “when?”.
there is also a rumor that EZB Chief Draghi is going to replace Italys President Napolitano soon.
With the “Nordic Euro” the EZB is not required anymore in the current Setup.
I had not thought of this angle, thanks.
What do you see happening if the gold the “Nordic four”
is asking for from NY and London is not there?? Or just partially there?
game over, as in an outright default by theft. Total credibility will be lost.
“Total credibility will be lost.”
Really? Germany has received 5 tons of it’s gold held by the Federal Reserve and I see not evidence of the Fed having lost it’s credibility. How would anyone find out that the gold is not there? If it isn’t there now, no one is telling? Except for Ron Paul, no one of any influence is demanding a physical audit? Reality is that the Fed can tell other central banks to go pound sand and no one, including the Bundesbank, gives a hoot. The “Nordic Four” is a nice fairy tale, but has no basis in fact.
“Germany has received 5 tons of it’s gold held by the Federal Reserve and I see not evidence of the Fed having lost it’s credibility” …this is because you are looking with your Western eyes. I assure you the U.S. has lost credibility with China et al. The “et al” part may just include the Nordics, otherwise why would they be asking for their gold to be moved to their borders and so much closer to Russia’s grasp
Germany will never have the balls to do anything against their anglo masters (they are still occupied as all europe).
When China backs their currency with gold, Germany will pivot East with their trade. How often this year did Mr. Putin and Ms. Merkel speak? 25 times? More? Can Eastern Europe really make it without Russian energy? I would venture to say that MANY things are taking place behind the scenes which none of us know about …none of them include the “status quo”.
So, we agree : “when china”.
if china is doing nothing apart making some swap with foreign central banks, so let it be.
Germans people have been definitively destroyed with the WWII : no kids, no balls, no gold, no ideas, no art, no army,…
It is not suprising as on german TV, WWII is broadcast ON A MULTI DAILY BASIS more than 70 years after.
no RD, I do not agree with you on this. Let’s agree to disagree and no need to keep posting. Thank you.
Looks like you were very right about – don’t wait for the new year – that you wrote yesterday!
Attack on Russia today, ? tomorrow.
All the best Al.
do you not think what has happened to the ruble is already and “attack” and an act of war?
It looks like attack, at least one of direct hostilities toward Russia. One that we – ordinary people can see.
It did not help even to almost double interest rates – still double crashed! And Russia is not so indebted and they hold huge natural reserves.
Where in the world you can find 17% interest rates? They (Central Bank) stockpile gold, you believe that in USA, there is none.
What else they can do to reestablish confidence?
Why there is no confidence issue in other countries of West, where interest rates are between 0 and 1%, with liabilities exceeding 100% of GDP?
yes again Al!
yes, they have little debt, lots of resources and gold. The crash is being orchestrated in my opinion.
It would be interesting if rouble will go on falling in next days, weeks. That may be a sign that Russia resists, don’t want to broke to those that do the pressure. What will/can happen?
or setting up a financial trap that’s inescapable?
For now he has taken a couple of uppercut in the face but he is not KO, but not sure that he has laid this trap.
not “he”, “they”.
Bill, Are you expecting something different tomorrow? Gold is always smashed on FOMC days. Gold stocks are stinking the place up. Could we not be being set up for an epic smash down?
it doesn’t matter unless you are day trading.
The “Stand & Deliver” moment for London & New York is fast approaching. This moment has been building since the second world war.
The objective of the “true” bank run is to the object with the most value. Physical gold. Physical silver. Imagine “Exter’s Pyramid” Once the precious metals are gone, next comes physical currency, which those who have not prepared will be lucky to get! Got gold? Got silver?
yes, you must be in place prior to whatever is done because you will not have the ability or availability later.
You are stating that there is a bank run in progress. Not by the ordinary folks, but by the Central Banks, themselves. It started a few years ago, by Chavez, for Venezuela …. and now the Nordic Four is either asking or mulling (behind the scenes taking posession?) gold repatriation.
Your reference to the Nordic Euro is similar to Jim Willie’s forcast a while back, using the same terms for the same nations. Great minds think alike, eh?
Your reference to – If China resets (bids) the price of gold ….. is also consistent with the Freegold Paradigm of Gold Unfettered from all monetary shackles …. where an entity of sufficient size and reputation could offer a price for gold ….. and where gold CAN BE any price, to become a True Store of Value, which cannot be debased by any individual or nation!
Wuth the CB bank run in progress, and the CME insituting a collar – might a Cash Out scenario be in the works? Soon? Imminent? LOL.
thanks PW, anything can happen from here on. The central banks themselves are displaying a lack of trust, this is a very bad thing which has no good end until a re set and “perestroika” occurs.
If you believe that BRICS will throw away the printing press you are dreaming !
All currencies will be fiat even after the rest.
really? You actually believe the “RICS” Russia, India, China and South Africa do not have an affinity for gold? Have they not all publicly spoken of a new reserve currency backed by a basket of fiats AND gold?
No, it will maybe a cover clause of let’s say 5/10% of gold BUT not redeemable : just a quantity theory of money renovated
Gold will never be allowed to re enter the system directly by circulating because gold and paper cannot coexist like fire and water and BRICS governments do want to keep their fiat power.
People will continue to hoard soe gold for protection/hedge.
It is possible that payments within big currency zones will be settled in gold but for the small guy/business, it will be fiat.
now you are changing the argument. Please STOP!
Getting exciting, now! I sure hope we goldbugs get a big Christmas present this year; I am tired of the lumps of coal that we have received these past two years!
be careful what you wish for, this will end up with distribution completely hobbled along with the lives of 99+% of the people.
Hummmm, where do I apply for the “Nordic Gold Card”??? (tongue in cheek)
not from the back of the line.
Great reply, very insightful.
Bill, how do we know the Dutch even received their gold? In your mind can all this be big bark no bite. Surely the Nordic block understands the ramifications of exposing the global gold situation.or are we at the point where the risks of not making a move for your soverign gold is more detrimental than just going along to get along? It is shocking to see the rate things are developing. Just don’t understand how smashing the paper price of something that nations will want & need can prolong your hegemony. Us vaults have to be empty at this point. Flase flag anyone?
correct Gil, I believe they received their gold otherwise something would have already been said. They are all scrambling for their metal because something is brewing and paper is no substitute.
Bill… the Dutch may have received their gold but if so that begs the question of “Where did it came from?”. The NY Fed, Ft. Knox, and London are often presumed to have no gold left after so many years of lending and leasing. The Germans did not get more than a little of their gold back, it’s scheduled to take several years before they have it all, and the US is badly behind schedule on these deliveries. Then again, the Dutch DO have one of the elite ruling families of Europe on the throne there. Perhaps that makes a difference?
FRBNY reported the withdrawal.
A very important day is January 1, 2015 when the Eurasian Economic Union becomes operational. Your block of for are most likely wanting to join, and to be founding members.
My guess is that on that same date the PetroYuan will also be announced as part of the Union.
could be Victor, many pieces are falling into place aren’t they?
For now, the biggest falling piece is russian economy : prepare the launch of a russian maidan in early 2015 sponsored by the usual suspects.
“Maidan”. NOT “maiden”. The word in Farsi (Iran’s national language) literally means a big ground or park for people to congregate in.
Look up “Euro Maidan” Bill, the evil George Soros / CIA / Chevron / Victoria Nuland project in Kyiv, Ukraine; which has brought about this mess on doorsteps of WWIII.
OK, I get it, had never heard the term used before.
I like to call these four (Belgium, Austria, Netherlands, Germany) the BANG countries, because when they pull the “Gold Trigger” there will be quite a worldwide monetary BANG.
Of course we’ll have to come up with a better acronym when more countries get on the bandwagon.
I am living in one of this bang and believe me that will not doing anything : it’s up to the brics or noting. Period.
Bill, I must say I agree with RD. I also can not see how those bang countries can do that. Their governments are just destroying businesses on every step, are over regulated, huge debts, old populations,… That would need to be 180 degree turn. I don’t believe we will see it.
I do believe these four countries banded together AND with their gold reserves could possibly form a Northern Euro, their natural trade would be East as that is where there is any growth at all.
I agree @Bill. People sometimes forget that once the Great Reset occurs, gold WILL be revalued by those who have the most of it and they WILL revalue it to very high levels because it is in their best interest to do so. We will not be looking at gold rising in percentages or even in multiples but in 10s and perhaps even 100s of multiples. This will be necessary to pay off the HUGE paper debts that these countries have, even if they are greatly discounted by the reset.
gold will be re priced to fill the black holes of default.
This nordic euro has been written years ago by Jim Willie and it has been postponed and now we hear the eurasian stuff but it will take years and years because they will talk and talk and talk and retalk like in the Monty Python films on the life of the Messiah !
In the meantime anglo banksters will have made one thousands uppercuts, actions, wars and so on.
Look at merkel : NOTHING DONE ON ANYTHING IN GERMANY FOR ONE DECADE.
everyone is entitled to their own opinion, this is yours.
Of course but you have to admit that the whole world is falling Under western Financial dome of actions and perceptions regarding money, currency, central bank actions, accounting and so on.
No, I do not believe the world is “falling under Western dome of actions and perceptions”. The world is buying gold and readying clearing systems away from the West. I also believe they are abandoning the dollar. MY OPINION, we also understand yours! This is my last post with you and I will not accept any more comments from you for this piece. If you want to blather on the next one, have at it but know I will not spend any time with you other than to say I DISAGREE if you continue this thought process. Over and out!
Another home run Bill! So the Dutch got way more gold back than Germany did, and now Germany is ok with getting its gold back? Do you suppose IF the fed does have some of Germany’s gold it could be receiving it back secretly? Why would they be fine with not getting back the gold they requested?
Thanks Doug, yes, there has been unexplained FRBNY gold movement, maybe German gold?
Perhaps that German gold is the price for their support of sanctions against Russia? Clearly, Russia and Germany have strong economic ties that meld their interests in many more areas than exist between the US and Germany.
…and probably closer ties in the future.
For now, central banks have adpoted today the same thing the US done in the past ie the end of the mark to markets : each actions done by russia, like china did, the exact copy of what the anglos monetary schools (IMF and world bank included) have taught : no more no less…
It is really depressing to see that the whole world in now Under western morale domination…
Hopefully on the long run you will be right !
In an extremely somber mood due to what’s happening in Russia right now. About that article of checkmate to criminal Federal Reserve by Putin oil-for-gold swap, do you still sympathize with that sentiment Bill? The pace at which (or maybe order in which) things are happening seems to be going all wrong. At this rate, it’s much likelier we will all head into WWIII, before any peaceful resolution for the world.
If Russia wanted to, they could have crashed COMEX in late November. There are still no indications they will roll out a gold backed currency, with China’s backing. It’s very difficult to keep broad perspective on a day like this.
yes, WW III is a possibility. A gold backed yuan, or Russia demanding gold for their oil is more likely in my opinion.
But what are they waiting ? Next century ?
Western bankers will increase the pressure until all BRICS explode financially. Of course china will be strongest of the team but all others are already dead.
really? And the U.S. will still be standing financially? The biggest leverage is in the West, not the BRICS nor anywhere else. The big “boom” you will hear is the U.S. financial system if not WW III beginning.
The US has still the possibility to patch any problem wiht more paper/debt/QE and while it cannot last for one more century, it can still be OK for the next few quarters/years.
I do not think BRICS has so much possibility at this stage.
I doubt it.
A quick thanks Bill
Well written and structured so even I could understand.
thank you Al.
Any Country could demand dollars in lieu of receiving back their gold and then buy gold. Any country afraid to do that isn’t serious. Would it drive up the price of gold? Well, China, India and Russia haven’t and they are buying a lot.
We have consistently under estimated the amount of gold and silver above ground. Perhaps we still are by an order of magnitude.
I read Ted Butlers monthly reports about ten years ago and he had numbers showing we would be out of silver within the year. He is recognized as a silver expert, which I am not. I am just looking for a way to explain the divergence between your most persuasive logic and the continuing decline in the COMEX price. If China has a real gold and silver market why would they not shut down the COMEX? Any large nation can offer silver mines COMEX spot plus two dollars and ensure no silver ever gets into the US system. Your logic is great, Bill, but seems like we are missing a factor which is reversing our expectations.
A sudden increase in silver price into the thirties would convince me that I was just impatient, after three years.
what part od “paper contracts” do you not understand?