With continued uncertainty around the globe, today the man who has become legendary for his predictions on QE, historic moves in currencies, told King World News that gold is rallying because Western central bank vaults are running out of physical gold.
Where Is The Gold?
Egon von Greyerz: “We have recently had some significant news about the gold market that makes the situation even less clear. The central banks and the BIS in Basel go to great lengths to tell the world absolutely nothing about their gold dealings. All transactions are carried out covertly and no central bank ever has an official audit of their gold holdings. The last US audit was during Eisenhower’s days in the 1950’s. Ron Paul has been pushing for an audit but to no avail. Will Trump instigate an audit? Well, he might have the intention but when he finds out that a major part of the US 8,100 tonnes of gold is not there, it will all go quiet. There have been pressures for audits in France and Germany in later years but this has had no effect. No country wants to reveal that the gold isn’t there…
Egon von Greyerz continues: “Germany has recently pretended that they are totally open about their gold dealings, but what have they actually told the world? In 2013 Germany announced a plan to repatriate 674 tonnes of gold from the US and France. The first year they only received 37 tonnes back and were told that they would have the rest in 2020. We have now been told that the program has been accelerated. By the end of 2017, out of the 3,381 tonnes that Germany owns, over 50% or 1,713 tonnes will be in Germany, with 1,236 tonnes still in New York, and 432 tonnes in London.
You may wonder why it needs to take 4 years to repatriate 674 tonnes of gold? Listening to interviews with the chiefs of Deutsche Bundesbank, they explained what a major logistical exercise it has been. According to the Bundesbank, they have had major problems with transport, insurance, security, etc. If we take Switzerland as an example, we both receive and export over 2,000 tonnes of gold annually. And that excludes major transfers between banks and private vaults. The same happens in countries like the UK, China, India, and the US. So around the world, many 1,000s of tonnes of gold are shipped annually without any logistical problem. You may wonder then why the normally very efficient Germans have had problems shipping 674 tonnes over 5 years?
The Original German Gold Held At The Fed Was Already Gone
The reason is that the gold wasn’t available because it had been leased or maybe even sold. This is confirmed by comments that the bars received in return were not the same as the original ones.
But the big question now is, if the remaining 1,668 tonnes that are supposed to be stored in the US and France actually exist? If they do, why not bring them back to Germany? Originally the reason for holding gold outside of Germany was the Cold War. Currently there is no Cold War so that is not a valid reason. We know why the gold originally was held in New York and London because that is where the majority of the gold trading takes place. But major central banks like the Bundesbank don’t need to move the gold if they lease it. Anyone trading with these Central Banks believes they are creditworthy. Our view is different. Central banks hold toxic debt that will never be repaid and therefore they are not safe. ….more here