Do you remember seeing old pictures of the Great Depression which depicted “lines?” There were two types, bread lines and also lines to the front doors of banks. While we don’t see any bread lines today, trust me, there are bread lines in every single state and long ones at that. Nearly 50 million people in the U.S. survive on SNAP, EBT cards or whatever they are called in your state. Can you imagine the “confidence” it would instill if each day on your way to work you saw massive lines of people waiting for breakfast? Or, when you came home from work you turn on your television only to see long lines again, this time for supper? I can see it now, some reporter out on the street giving us the “good” unemployment, inflation or GDP news with a line of people in the background waiting for food. My point? False economic news would be harder to “sell” and even harder to “stomach” (pun intended).
Back during the Great Depression there were also the other type of lines, these formed in front of banks. Many banks either “ran out of money” or had poor investments which led to their demise. We also had this type of activity in the U.S. in 2008-09 …but again, we just didn’t see them. There were “electronic runs” of all sorts which we either didn’t hear about or never saw …but they did happen. This is why so many banks, brokers and mortgage companies were rolled up together and merged. The failures had to be hidden as best they could from the public’s eye because fear would have bred more fear. This cannot be allowed in a system built and standing alone on “confidence”.
I mention the above because another situation is now arising, another “line” is beginning to form. The current line formation is unfortunately the scariest imaginable, we are facing the Mother of all Bank Runs! This past week Willem Middlekoop uncovered another central bank asking for their gold back, Belgium. We already know Germany had publicly requested their gold back beginning in early 2013 and gotten very little so far. Just a couple of weeks back, The Netherlands announced the repatriation of 122.5 tons of gold …after the fact. When the announcement came, it said the transfer and transaction had already been done. Several days afterwards, a leading candidate for France’s next election also brought up the possibility of French gold being repatriated …and now it’s Belgium!!!
Notice I used three exclamation points, I did so because of all the central banks to request their gold back; Belgium in my opinion would be the very last to do so with one “caveat.” The caveat being “unless something REALLY big has changed,” let me explain. First, Belgium is the “seat” of the European Union, this is where all European decisions are made and announced (with Germany’s approval of course). The decision to repatriate gold from the “safe haven” of New York and to do it publicly raises eyebrows on its own, but this is Belgium, not “just some country” in Europe. Brussels is where the EU itself is headquartered. We are talking about a dealing between the #1 and #2 Western central banks in the world, did the EU or ECB in Frankfurt give the OK to ask for repatriation? Yes I understand, Belgium’s central bank is not the ECB but would they or any other central bank request repatriation without ECB approval? The same could be asked of both Germany and The Netherlands, they must have had prior approval before asking for their gold back?
Looking at this a little further, I remind you of earlier in the year when it was discovered “Belgium” was holding some $400 billion worth of Treasury securities. This was termed the “Belgian bulge” and not really explainable because Belgium as a country did not have the wherewithal to have purchased this amount. Either this was done via proxies or with ECB help or some other manner, it has never been explained to my knowledge. I mention this because of the important “tie” apparently between the U.S. and Belgium. If “Belgium” trusted us so much to have purchased $400 billion worth of Treasuries, then why repatriate their gold? Belgium has 227 tons of gold, we found out in 2011 that 86 tons of this amount were on lease, leaving approximately 141 tons at the FRBNY. This is only worth in current dollars somewhere close to $5 billion. The “ratio” if you will is better than 80 to one, Treasuries to actual gold “held” but not leased (hopefully?).
Why does it even matter what the ratio is? Let’s walk this through, because we are talking about the issue of “trust”. The only reason one would repatriate gold is because they want it in hand. If you believed your gold was safe and sound, protected and “actually there,” no one would ask for their gold back. Belgium has displayed their confidence by holding $400 billion worth of U.S. Treasuries …but apparently not with the U.S. holding less than $5 billion worth of gold? Why the dichotomy of trust? Actually, I will use a better word, “bifurcation” of trust, and yes there is a pun within this one too.
Another piece of news out of the ECB (Belgium) this week was the classification of member’s gold reserves. Koos Jansen brought this to our attention which on its own is very big news but has now been overshadowed by the repatriation news though most definitely connected. The member states it seems they are being told to differentiate between allocated and unallocated gold, and to also break down swap positions and receivables. Theoretically this should make gold holdings less opaque and more clear to view, but why? Why change the reporting and why now during the repatriations…?
I of course do not have the answer but we can speculate something has and is definitely changing, and this “something” is HUGE! I say huge because these events are a change to policy which has stood the test of 70 years’ time. For the last 70 years, the world has stored their gold at the New York Fed and never asked for it back. Other than Germany withdrawing 1,000 tons from the Bank of England in 2001, Venezuela is the only country to ask for their gold back…until now. The only way to describe what is beginning to happen is to call it a bank run, The Mother of all Bank Runs and an “old fashioned one” at that!
This will be very interesting to watch exactly because of the “old fashionedness” and the scramble for what we have been told and taught for so long to be a worthless barbarous relic, gold. Current day bank runs as you know have been papered over time and again, just look at Fed, ECB and BOJ balance sheets to understand this fact. They continually printed new monies and bought failing paper from dying banks to keep them alive. The creation of new money was the key, the fact that gold cannot be created out of thin air is the sticking point.
As this bank run progresses, please keep in mind the central banks will be telling anyone willing to listen, what the true definition of money is …by their actions…without actually saying it. As central banks fight over gold, they will be standing publicly and buck naked telling the world exactly what money is and what it isn’t. Watch as the central banks fight over what today are meaningless dollar amounts of gold. Do you understand what I am trying to say here? For central banks to even care about a few billion dollars is a ridiculous thought, but maybe it’s not “just a few billion dollars?” Maybe they are beginning a fight over “all the money in the world?” Please understand, this is for all the marbles!
One last note, if it turns out Belgium does decide to repatriate their gold, this would mean Germany, Holland and Belgium have all done the same exercise. I would add that Austria would probably be next …which would mean what? The stage would then be set for a likely breakup of the formal EU into “north and south” regions. These nations while holding gold in hand would benefit from a markup in gold prices and allow for a “northern euro,” backed partially or on a ratio basis to gold. The line is forming and the back of the line is no place to be!
Seems like we’re getting to: “Nothing is covered up that will not be revealed, or hidden that will not be known. Therefore, whatever you have said in the dark shall be heard in the light, AND WHAT YOU HAVE WHISPERED IN PRIVATE ROOMS SHALL BE PROCLAIMED ON THE HOUSETOPS.” Luke 12:2.3
We are watching it right before our very eyes!
it is because the lies have turned into unbelievable and nonsensical whoppers.
Indeed so, Bill, and I don’t know which ticks me off worse: that they are telling these whoppers or that they actually expect us to believe them! Only the brain-dead among us are believing this nonsense. The rest of us… stack. 🙂
believing everyone is so stupid is an insult to those with a brain!
Bill, you have a special gift for piecing together lots of disparate portions of information into a plausible, logical ‘conspiracy theory.’ I say that as a complement; the only things I believe, now, are conspiracy theories, which do the best job of tying together all the known data points. Heck, all a conspiracy theory is is a commonsense unearthing and piecing together of the data, in the face of steadfast, implausible government and media positions to the contrary.
Makes great sense, that Belgium would have to coordinate its moves with the EU and ECB before making its public declaration. Great memory, bringing the $400B Belgian Treasury purchase to the fore, to contrast its huge amount with the gold repatriation. Thanks for showing us the real importance of Belgian repatriation move, Bill.
you’re very welcome John, the reason “conspiracy theory” makes more sense is because the official version don’t make any.
John Galt always said, “If the story you Hear doesn’t add up, CHECK YOUR ASSUMPTIONS”!
It would be nice to have the real thing over here. But the statement in itself was worth gold. It’s sad many people just don’t read it that way. It’s not like they needed to announce it..
let’s see how it pans out?
Yes. And thank you for the excellent article. It’s not normal to announce such actions. “What Is Going On Here??!!” (https://www.youtube.com/watch?v=DaJOeLuUD94)
I always read what you say and I couldn’t agree more. I am curious about 2008-2009. If the banks/countries are beginning to scramble for real money now, why didn’t they begin this back then? Why haven’t we seen banks/countries trying to get their gold sooner? I can’t believe they haven’t seen this coming for some time. What has motivated them all of the sudden?
because they did not see a pressing need at the time, now they do?
My thought on this is that back in 2008-9 the entire system was so close to collapse, they were AFRAID to rock the boat via gold repatriation. They probably thought that raising this issue then would be the infamous last straw upon the camel’s back… and I think that they were right about that.
Now, however, the imminent threat of a full-blown collapse is a bit more remote, they have a little more wiggle-room, and they are using it to gather REAL money unto themselves before the SHTF and they MUST have real money in hand at that time.
Yes, the central banksters continue to denigrate gold and those who hold it but that is surely a psy-op aimed at allowing them to grab up more gold at lower prices. The lower prices are not important in and of themselves but they do allow the banksters to buy up MORE gold than higher prices would. Forget everything they say but watch VERY closely what they DO. This is the way to handle criminals of all sorts and while these fellows may dress better than the common criminals, their goals are very similar.
“Now, however, the imminent threat of a full-blown collapse is a bit more remote, they have a little more wiggle-room,” I don’t think so Ed, I believe we are more easily collapsible now.
Again, great detective work Bill. I truly believe early next year currencies will be reset against Money, but only as the first of several Big resets to follow later on. So many things are really Broken in the Financial world and we only get little bits and pieces of the picture. This is why people like you are such a big help in putting the pieces together to try and form a True picture. Thanks again Bill
I agree, Richard. My time-line says that there will be a financial episode of epic proportions sometime between April and July of 2015. I do not know what form it will take and have no data to support this but am going strictly by the “feel” of the US stock market. I have been an investor for better than 38 years now and there are multiple signs in the market that it is not only sick but getting sicker. This illness is being covered up by the Dr. Feel Goods in the US Gov and Fed. It simply cannot go on for much longer.
The coming collapse will be a spiritual event just as much as it will be a financial one. I think of this as “The Time of Testing”, for we will be sorely tested as to our faith and how we live our lives under great stress. Family, PMs, and faith in God will get us through the coming hard times. Sadly, many will not get through these times. Got preps?
no sense in guessing a timeline, it can be any day for any multitude of “causes”.
Excellent, excellent article!
I think we should rename “Mother Earth” to “Ponzi Earth” as it would be much more accurate.
no Farrell, Ponzi is only temporary
I miss the good ol’ days when they were all still “theories”.
Great article Bill, makes sense.
Here is another good one from this morning that kind of ties in.
There were two other periods of gold being steadily transferred out of the Fed by other nations… one was in the aftermath of the tech bubble and lasted about 18 months and the other was after the housing bubble and lasted about two years. This latest episode is only about 9 months along.
I know about Germany pulling from the LBMA in the 2000’s but not the from the Fed. Who withdrew and how much?
Wasnt Belgium the last country to “BUY” several hundred billion dollars worth of Tbills this fall..late summer?
Hmmmm collateral for their worthless paper???
Burn it all down….the sooner the better.
yes, “the Belgian Bulge” of $400 billion was discovered earlier this year.
Bill, how do we really know that the Dutch got any gold from the Fed? Did anyone see it during transit? Did Dutch foreign reserves decrease by the right amount? And if they got it were they allowed to keep it in their country, or is it still paper in NYC?
you are correct Mike, all we have so far are bookkeeping entries on both sides.
I believe the concept of Trust when it comes to the FED….is so thin…that you can only assume they are now running on vapour. Gold repatriation could also be due to the need or desire to have something tangible and of value should the need arise where the monetary system does not function and the currency du-jour fails (i.e. the USD goes into a tailspin). These are indeed warning signs / red flags for what is to come. Last time we had a lack of trust in the system …everything shut down, banks would not take on counterparty risk and liquidity froze. A Thanksgiving Holiday may very well precede the infamous and unexpected Bank Holiday.
11/26/14 – USA Watchdog.
You omitted to note that Belgium is also the HQ of the Infamous (but highly useful) SWIFT System !!!! Coincidence ????
all the more reason to scratch your head if Belgium does in fact repatriate.
The reason these countries sent their gold abroad in the first place was, for example when Germany invaded Holland, for security reasons. Now they can only rely on the kindness of strangers to get it back (and bankers are no ones’s friend). Making the so-called security strip in currency out of actual gold instead of Mylar instantly solves this problem, and completely obviates any need for centralized gold storage. Of course, this means putting the gold in the hands of the people, and who wants to do that? Honest governments, that’s who, as existed here a century ago.
…and now they want it back for “security reasons”.
When there is trust in the system, gold can just sit in vaults gathering dust. But when trust breaks down, that’s when gold reasserts itself as currency. When two central banks do not trust each other, they will not want to engage in currency swaps, they will want to extinguish obligations between them. The only form of money that does not leave a lingering form of obligation or debt is gold. It extinguishes both sides of the transaction.
Look at the trust breaking down every where. The EU is coming apart. The Middle east is coming apart at the seams, not that that is new, but ISIS appears to have raised the stakes substantially. South Africa is fragile. The Japanese and Chinese are fighting over islands (sitting on vast oil deposits). Nobody trusts the Russians … or us for that matter.
As the world descends into mistrust, the only way to clear international balances without creating more distrust, is with gold. Then, as we move to the SDR ‘world money’, the IMF is not a nation state, and has no assets or miltary to back up anything. They will have to accumulate a huge gold reserve to give some backing to what they print.
very good KT, though I am not sure the world will trust the SDR unless they can actually show gold reserves.
Great article Bill….I shared on Facebook.
thank you Rodger.
I am going to make a counter offer. Belgium is a pawn of the FED. They do not hold the Treasuries claimed, the FED does via Belgium. Belgium asks for the gold back, and it is stated to be delivered. But, never any real proof. Belgium gets no gold, and us (the dooms-dayers) are quieted, or as they would really wish….. discredited.
I have said all along the Belgium Bulge was via proxies and do not doubt it could be the Fed itself.
According to Koos Jansen’s blog below, it appears that the germans are getting their gold back.
Can you shine a light on this please as I am getting confused.
we will have to wait until early 2015 to hear an announcement from Germany. I am curious as to whether the gold is original gold or something different that needs to be re cast?
This week (12/8/14) the Chicago Fed is bricking up their ground floor windows. What do they think is going to happen?
where did you see this Bart?