Posted on 03/15/2025 12:42:08 PM PDT by delta7
The Basel III Countdown Begins
Basel III will be implemented in the U.S. on July 1, 2025. The much needed change strengthens bank capital requirements, limits leverage, and increases liquidity standards to reduce financial risk and enhance banking system stability. A significant part of that involves restoration of Gold to its status as Tier 1 capital reserved for the world’s highest valued collateral. What follows is an analysis and explanation of the scramble to repatriate both Gold and Silver by American banks as that deadline approaches. 1. Repatriation: Quiet Additions to the U.S. Balance Sheet
The gold being repatriated now isn’t just sitting idle. A significant portion is being added—or more accurately, restored—to the U.S. balance sheet.
Basel Iii Banks Need Gold 05
H/T Ronan Manly
2. The Gold Wasn’t Sold—But It Was Loaned, Then Shorted
The U.S. Treasury never sold this gold outright. That would have been a constitutional violation, as gold can only be sold to retire U.S. debt directly. Instead, in the 1990s, the gold was loaned out to bullion banks under a perpetual rolling structure. These banks then hedged it through carry trades, profiting off borrowed gold.
Who was behind this? Look no further than Robert Rubin and Alan Greenspan. The Fed facilitated it, the Treasury allowed it, and the bullion banks executed it. In some cases, what now sits in place of actual gold are IOUs issued by those same banks.
3. Why It Happened: Monetizing Gold While Keeping Prices Down
At the time, the rationale was simple:
The Fed got to monetize gold by loaning reserves, earning a small return.
Gold prices remained suppressed, preventing inflation fears from spiking (a lesson Greenspan learned from Volcker’s battles).
Bullion banks used the gold for leveraged carry trades, compounding their profits.
No laws were broken. But in the process, a critical asset tied to American sovereignty was placed in the hands of private banks—banks that could, and eventually would, default.
This gold leasing and carry trade structure went on for decades. The chart further down illustrates just how long.
4. Fast Forward to Today: A Balance Sheet Reckoning
For reasons still unclear, the U.S. has decided to clean up its balance sheet. That means some of those IOUs have been called in.
The problem? Many bullion banks, complacent for years, now face a scramble. They have far more claims against gold than they have actual gold. And with IOUs being recalled, they’re being forced to cover their positions—at any cost.
Why is the U.S. doing this now?
Fear of BRICS gold purchases?
A need to consolidate assets for monetization, as Treasury Secretary Bessent has hinted?
A preparation to create a gold-backed bond-type instrument for international dealings?
Regardless of the reason, the underlying reality is the same: If everyone else is securing gold, the U.S. needs gold too. The bullion banks, caught in the middle, are paying the price.
5. From Greed to Fear: The Shift in Bullion Bank Behavior
Over the last two years, bullion banks have gone from aggressively shorting gold to desperately covering their positions.
Bullion Banks Covering shorts On All Time Highs…
Before March 2023: They played the usual game—selling high, buying low, profiting from hedge funds scrambling in and out of bullish positions.
Post-December 2023: They started covering shorts more aggressively but still maintained some patience in their purchases, keeping gold prices elevated but controlled.
Post Trump’s Inauguration: The game changed.
Banks go from booking profits to locking in losses in 2 years…
Basel Iii Banks Need Gold 06
At that point, bullion banks began urgently covering shorts, not to profit but to survive. They started locking in losses, breaking even at best, often losing money outright. The dark blue arrows in the attached charts highlight this shift.
The turning point came in 2022 (see OCC Bar chart) when JPMorgan, Citibank, and others were forced to disclose their derivative books in compliance with Basel III. But the cracks had been forming for years.
6. Basel III: The Countdown to Gold-Backed Reality
Basel III, which started in 2009 after the Global Financial Crisis, was delayed repeatedly due to EU crises (GREXIT 2011, BREXIT 2016, etc.). Now, it’s scheduled for full implementation in the U.S. in July 2025—and current bullion bank behavior suggests that deadline will hold.
This is why gold is flowing back into the U.S. If banks can’t reclaim their encumbered gold in time, they’ll be forced to continue covering shorts in a rallying market. Everyone already knows there’s a problem. If this continues without government intervention, it could get ugly.
And if gold is the metaphorical gun you have to keep your financials safe, silver is the bullets.
Bullion banks haven’t even begun to hedge their silver shorts yet.
Stay tuned.
I am giving a heads up to the general public, Silver at $33 oz is the world’s most undervalued hard asset on the planet….last chance before it to becomes unaffordable.
“As $3000 oz Gold appears to be unobtainable to many, it most definitely will be on its run to $5,000 and beyond.
I am giving a heads up to the general public”
LOL! You posted that in 2014!
Martin Armstrong – Gold Bullion To “Max Out At $5,000 Per Ounce”
Apr 15, 2015, 8:53 AM EDT
This article is more than 9 years old.
– Fall 2015 turning point – civil unrest and riots globally says forecaster Armstrong
– Fed have to raise rates – due to pressure from congress and media
– By 2020 the cost of servicing U.S. debt will outpace defence spending
– European banks will collapse and “blood in the streets”
– Higher rates will also devastate emerging markets who have issued dollar-based debt
– Gold to “max out at $5000 per ounce”
– Advocates diversification and holding bullion coins familiar to public such as $20 gold coins
– “Your portfolio has got to include everything … including bullion”
Renowned financial analysts and trends forecaster Martin Armstrong has said that gold will “probably max out at $5,000 per ounce” as “people lose confidence in government” and that we will see riots and unrest globally in the coming months – the fall of this year.
It a very interesting interview with Greg Hunter of the excellent USAWatchdog.com, Armstrong says :
https://www.youtube.com/watch?v=FvcfYyuMDh8
“Gold rises when people lose confidence in government. It has nothing to do with inflation. So, when you start to worry about government is not going to survive or who’s going to win, that’s when gold rises. Short term, we still have the risk of it going under $1,000 per ounce. It’s going to flip when everything is right. It will probably max out at $5,000 per ounce. . . . You are really talking about a major reset coming. 300 years ago, that was the revolutions against monarchy. Today, it’s going to be revolution against . . . pretend democracy. We do not have a democracy.”
We would slightly disagree with this as research and the historical record shows that gold is a hedge against inflation – particularly virulent inflation as was seen globally in the stagflation of 1970s and the litany of hyperinflations seen in the last 100 hundred years.
Martin Armstrong was accused of running a $3 billion Ponzi scheme and served 11 years in jail under house arrest, including a possible record seven years for contempt of court in a dispute over gold and antiquities. He is a former financial adviser who was Chairman of an investment firm called Princeton Economics I nternational and he is best known for his economic predictions based on the Economic Confidence Model, which he developed.
https://www.goldcore.com/blog/martin-armstrong-gold-bullion-to-max-out-at-5000-per-ounce
“holding bullion coins familiar to public such as $20 gold coin”
$20 gold coins are not bullion.
Paul Rand is pleased.
I meant Ron Paul. He put his whole investment strategy in gold and other metals.
“He put his whole investment strategy in gold and other metals.”
Most in miners of metals.
“Renowned financial analysts and trends forecaster Martin Armstrong has said that gold will “probably max out at $5,000 per ounce” as “people lose confidence in government” and that we will see riots and unrest globally in the coming months – the fall of this year.”
You missed that one along with a few others:
His predictions:
He failed to predict his three bankrupsies.
He failed to predict his losing $700 million of his clients’funds.
He failed to predict he would spend eleven years in the federal pen.
In 2014 he predicted gold would soar to $5,000 in 2015.
In 2014 he predicted that there would be a world financial collapse would occur in 2015.
July 2024 he predicted US cIvil unrest/WAR to happen just before the 2024 elections.
November 2024 he predicted a US civil war would happen the week of Trump’s inauguration with the US breaking up into four new countries in 2026.
December 2024 he said via Socrates that the 2024 elections would be the last in the US.
January 2025 he predicted US civil unrest on May 7.
Good to see you validating Armstrong’s Socrates computer forecasts. Here is yet another ( four dozen interviews since Jan) Armstrong podcast. Enjoy!!
Armstrong’s Socrates computer forecasts are legend with financial institutions and Central Banks….many of the “ little people” like you never even heard of him.
“Good to see you validating Armstrong’s Socrates computer forecasts.”
I note that you never bring up all of your failed predictions, like the one where you predicted that a US civil war would start in Jan. 2025.
I am puzzled by BIS - which ostensibly is a “central bankers bank” and sets standards for bank supervision among its central bank members - would set standards which will make it more difficult for large banks to “fudge” the value of derivatives, and also tie them more strictly to gold.
It seems directly counteractive to politicized central banks, whose goal is to support their nations fiat currency and debt expansion.
One would assume member central banks would want fewer restrictions, not more.
If gold is at $5k silver is easily $100. The thing with silver is that it is a highly industrialized metal as well.
As the price rises, gold and silver will be more economical to mine. Russia has massive “gold in the ground” and this could turn them into an economic powerhouse pretty fast.
The economic turmoil from the result of significant, long term, financial mismanagement is going to cause a lot of pain in the US. I fear that those who have prepared are going to have it slightly easier-but the problems could be so systemic that it would be akin to having a “nice cabin on the Titanic.”
The American Eagle $25 coin is absolutely a bullion coin. As is the 1 oz $50 coin.
I have no use for Ron Paul but he has been a long time gold bug and gold accumulators. It looks like he is being vindicated.
Gold hit lows 1999..... “Gold reached a local low of about $253
per ounce in 1999”
This roughly means gold is 12x higher today.
Apple stock is x higher than 1999? With other hi-techs also performing great, as in many times better than gold
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“Apple stock is significantly higher than it was in 1999. In March 1999, Apple stock traded at a split-adjusted price of $0.32 per share. As of the most recent data available, Apple’s stock price is $213.49. This represents an increase of approximately 66,715% from the 1999 price.”
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“Microsoft stock has also experienced significant growth since 1999. The closing price for Microsoft (MSFT) in March 1999 was $27.53. As of March 15, 2025, Microsoft’s stock price is $388.56, representing an increase of approximately 1,311% from the 1999 price.”
“Fed have to raise rates – due to pressure from congress and media”
You couldn’t miss on that one!
Fed rate was 0.1%!
“The American Eagle $25 coin is absolutely a bullion coin”
It is not bullion as it is an alloy. However, congress gave it an exemption for IRAs.
“This roughly means gold is 12x higher today.”
ETN, my favorite, has gone from 7 to 295 in that time period.
That is about 42x.
Plus all those years with a good dividend.
Forex:
Gold bullion
The term gold bullion describes a large quantity of physical gold that is at least 99.5% pure metal, it can be cast in bars, ingots, or coins.
What is ETN...... I looked and could not find it. Except for Electroneum
“Russia has massive “gold in the ground” and this could turn them into an economic powerhouse pretty fast.”
Italy has more gold reserves than Russia.
The US has 4x that of Russia.
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