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Posted on 11/08/2024 5:57:33 PM PST by delta7
Countries outside the eurozone but inside the European Union, i.e., those that one day might join the eurozone—like Poland, Hungary, and the Czech Republic, are positioning for a new gold standard.
To prepare for a monetary system based on gold, they are buying gold to equalize their reserves to the eurozone average. This balancing of gold reserves in Europe is a key topic I have written about extensively.
And now, additional evidence of these plans has come out, this time from Konrad Raczkowski, former Minister of Finance of Poland.
Raczkowski recently argued official gold reserves in Europe must be evenly distributed relative to GDP, which “in the near future … will be the new gold standard.” His statement adds to a vast body of proof regarding Europe’s preparations for a gold standard.
As the United States, issuer of the world reserve currency, has arrived at a critical phase in its debt spiral and as geopolitical tensions keep mounting, it’s of paramount importance we evaluate what gold’s role will be in the international monetary system moving forward.
Gold Is Central Banks’ Plan B
Hot 2024 Gold American Eagle Coin - 1 Troy Ounce, 22k Purity 2024 Gold American Eagle Coin - 1 Troy Ounce, 22k Purity Price & Buy Most of the largest central banks have a “Plan B” when their paper policy goes haywire, and this backup plan is, to a certain extent, coordinated between them. The first seeds of Plan B were planted by European central bankers and politicians in the 1970s. Only the U.S., together with some of its most obedient vassal states, has been unwilling to cooperate.
Plan B, of course, is gold, owned by virtually every monetary authority on this planet and bought by non-Western central banks in record amounts in the past years in response to dollar weaponization and debasement (see chart 1 below). A marked change in the international monetary order awaits us.
Why European Nations Want to Evenly Spread Gold Reserves
During the demise of Bretton Woods, it was clear that several European countries wanted to switch to a gold standard. They couldn’t pull it off at the time, partly because the United States was using its military strength to block such efforts. Another reason was that the world’s monetary gold was unevenly distributed at the time. Most metallic reserves were held in Western Europe1.
Chart 1. Official gold reserves are more dispersed across the world than ever. When the world switches to a new monetary system, that new system will thrive best if all countries have an equal amount (proportionally) of the new monetary unit. In the 19th century, as most countries went on the classic gold standard, gold demand increased, which pushed up the price of gold and led to deflation (gold was the unit of account).
The more skewed the current distribution of official gold reserves, the less smooth a transition towards an international monetary system based on gold.
In the early 1990s, European central banks began selling gold reserves. The central bank of the Netherlands (DNB), for example, sold 400 tonnes in 1992. The gold was sold through the Bank for International Settlements (BIS), off the market, to the Chinese central bank (PBoC). This was the first step towards a more balanced distribution of gold.
As selling by Europe went on, the gold market got worried that uncoordinated sales were destabilizing the market and driving the price down. As a result, in 1999, at the annual IMF meeting in Washington DC, fifteen European central banks signed an agreement to coordinate their sales2. This agreement would become known as the Central Bank Gold Agreements (CBGA).
In the CBGA, they stated that “gold will remain an important element of global monetary reserves. The collective sales will be limited to 2,000 tonnes over the next five years, about 400 tonnes per year.” The signatories also announced that their lending would not increase over the same five-year period (they had 2,119 tonnes on lease in 1999).
The announcements prompted an upward reversal in the gold price—much of the uncertainty surrounding the scale of gold selling by the official sector had been removed. CBGA was repeatedly extended, up until 2014, although most of the selling stopped after 2008.
CBGA seemed like an agreement for coordinated gold sales. But for those paying close attention, it was obviously meant to equalize gold reserves among countries relative to GDP. Only medium-sized economies in Europe sold heavily, while large economies sold very little.
Additionally, of the small countries, Cyprus, Estonia, and Lithuania, didn’t sell an ounce of gold during the “concerted programme of sales.” And Ireland even added half a tonne in 2007 and continued buying after 2008.
Chart 2. Eurozone Gold Reserves vs GDP. Source: ECB, IMF, World Gold Council, Money Metals Exchange. Spain is an outlier in chart 2, although it has more foreign exchange than the other countries. Total reserves (gold and foreign exchange) in the eurozone are more accurately spread than just gold.
Chart 3. Eurozone Total International Reserves vs GDP. Source: ECB, IMF, World Gold Council, Money Metals Exchange. Within the eurozone, some central banks (that hold too little or too much gold on a relative basis) might cooperate by swapping foreign exchange for gold before gold is revalued. That way, they enjoy the same advantages in their gold revaluation accounts, which can be used to offset bad debt on their balance sheets. This would be the crown on the monetary reset.
When one sees a visual representation of the total-reserves-to-GDP ratios within the eurozone over time, the coordination of reserves management among these countries is astounding.
Chart 4. Eurozone Total Reserves As a percent (%) of GDP. Source: IMF, Money Metals Exchange. Remarkably, when I asked central banks about harmonizing reserves within the eurozone, they all replied there is no such policy! Countless Freedom of Information (FOI) requests submitted throughout Europe, directed at central banks and Ministries of Finance, all yielded nil.
Sometimes, for example, in the case of Belgium, I was told the subject was confidential and gold management documents couldn’t be disclosed on grounds of “a legal obligation of secrecy” laid down in a law for its central bank from 1998 (just before CBGA was launched).
After a long trajectory of discussing my FOI requests with civil servants in the Netherlands and waiting for months to get a response, they ultimately refused to send me any document related to international cooperation on gold policies.
Europe’s Open Secret Gold Balancing Act
Hot 2024 Gold American Eagle Coin - 1 Troy Ounce, 22k Purity 2024 Gold American Eagle Coin - 1 Troy Ounce, 22k Purity Price & Buy Although equalizing gold reserves in Europe is (somehow) not official policy, I have found numerous statements from central banks that prove their ongoing balancing efforts.
In the annual report 1992, DNB comments on the sale of 400 tonnes:
With the United States, Germany, Switzerland, France, and Italy, the Netherlands belongs to the group of countries with the largest gold reserves... Within the European Community, when gold reserves are considered in relation to GDP, the Netherlands was and is one of the largest gold-holding countries. On this basis, [DNB] reduced its gold reserves from 1,707 tonnes to 1,307 tonnes in the fall of 1992.
DNB sold another 650 tonnes from 1992 until 2008.
After the Great Financial Crisis (GFC) in 2008, the Minister of Finance of the Netherlands, Jan Kees de Jager, was asked in parliament for the main reason why the Dutch central bank had sold more than 1,000 tonnes of gold since 1992. His answer:
Through gold sales in the past, the Dutch central bank brought its relative gold holdings more in line with other important gold-holding nations.
When he was asked who the buyers were, he answered:
The buyers are developing nations whose international reserves are growing or historically have a small gold stock.
Dutch newspaper NRC Handelsblad covered the 400 tonnes sale by DNB to the PBoC in 1992 and mentioned:
China announced that it is working to build up its [gold] reserves in order to bring it more in line with the size of Chinese GDP.
Even China was in on balancing reserves.
We can read a similar perspective from the Swiss central bank—which was part of CBGA but is not part of the European Union—on why it sold 1,300 tonnes of gold:
The Swiss National Bank completed its gold selling program of 1,300 tonnes on March 30, 2005. Before these sales, Switzerland’s relative position with respect to gold holdings was extreme among the G10 countries.
A statement from the central bank of Austria (OeNB) addresses its gold to total reserves and GDP ratio:
… the volume of gold held by OeNB is deemed to be appropriate relative to the size of both its total reserve assets and the Austrian economy [GDP].
OeNB reveals that gold and foreign exchange reserves are balanced relative to each other and the size of the Austrian economy, affirming the correlations shown in charts 2, 3, and 4.…….more.
Bkmk
“we haven’t had a full audit since the 1950’s.”
October 28, 2022
https://oig.treasury.gov/sites/oig/files/2023-06/OIG-23-004_R.pdf
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Headline: Europe Is Finalizing Preparations for a Gold Standard
Europe Has Been Preparing A Global Gold Standard Since The 1970s
IT’S COMING.....
And the Fed is always credible, particularly under the Biden regime. 😂
How much gold and silver do you have? (Don't tell anyone in New England - or how much food you have - or how many rounds of ammunition you have - etc.) :^D
Glenn Beck has been talking about gold, food and guns for years... now he says he lost them all in a boating accident. Good luck, Glenn... :^/
We have NOT have a full audit since the 1950’s. A full audit compares ALL numbers AND purity (drill assays).
Congress has known this since the 1960’s.
I repeat, President Trump must authorize a full audit of our gold reserves. Much evidence we do not have 8,000 tons.
“A full audit compares ALL numbers AND purity (drill assays).”
Random assays are done each year
Never a problem
I hope you are not suggesting that we “drill” every bar and coin?
NO, only the seals are inspected.
More , much more if you care to find out.
“Much evidence we do not have 8,000 tons.”
Who is Bill Still?
Much more…..for the doubting Thomas’s ( Gators).
https://finance.yahoo.com/news/u-congressman-seeks-full-audit-015000659.html
“CHARLOTTE, NC / ACCESSWIRE / May 26, 2021 / America’s gold reserves would be audited for the first time in more than 60 years if a measure introduced yesterday by U.S. Representative Alex Mooney (R-WV) becomes law.…”
Your link doesn’t support your post.
Who is Bill Still?
——-
I can’t ( won’t) spoon feed you. Research on your own time.
” (drill assays).”
A drill assay is analyzing a core sample of crude ore
Not used to assay bars or coins
“I can’t ( won’t) spoon feed you. Research on your own time.”
You don’t know either ...
Let me help you out. They are hiding something. With the world’s Central Banks now buying historic amounts of Gold, they will at some time be forced to do a full audit.
https://www.govtrack.us/congress/bills/117/hr3526
“H.R. 3526 (117th): Gold Reserve Transparency ...
... Act of 2021
To provide for the first true audit of gold owned by the United States in more than 65 years, and subsequent audits every 5 years.“
Bill Still: I have no way of knowing whether or not the charges are true.
Never happen. Even fractional gold would be a bazillion to cover what is in dollars and euros now.
Nope.
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