http://www.silverdoctors.com/gold-bank-run-accelerating-now-the-swiss-want-their-gold-back-all-1040-tons-of-it/#more-20424
http://harveyorgan.blogspot.com/2013/01/jill-sommers-cftc-commissioner.html
In paper stories, the Spanish unemployment rates rises to 26.02% and both Spanish and Greek youth see their unemployment skyrocket past 55%. The total unemployment rate for all of the youth in the Euro zone is 20%.
Today, the oldest bank in the world Banca dei Paschi de Siena announced more derivative losses at its bank and these were off balance sheet and unknown to all. If this bank hid losses, you can imagine other banks in Italy and Spain did the same.
In USA news, the Kansas City Fed Mfg index fell again making 5 out of 5 regional areas saw their manufacturing sectors fall.
We will discuss these and other stories but first let us head over to the comex and assess trading today............
GOLD BANK RUN ACCELERATING…NOW THE SWISS WANT THEIR GOLD BACK- ALL 1040 TONS OF IT!
With http://harveyorgan.blogspot.com/2013/01/jill-sommers-cftc-commissioner.html
THURSDAY, JANUARY 24, 2013
Jill Sommers, CFTC commissioner resigns/Canada's Royal Mint
Good evening Ladies and Gentlemen:
Gold closed down $16.60 to finish the comex session at $1669.50. Silver also faltered down 71 cents to finish the day at $31.70. As expected, another raid was orchestrated by the bankers for two reasons:
i) options expiry on gold and silver metal contracts. The options expiry is Monday.
ii) the huge OI in silver and generally the bankers try and force silver holders to relinquish some of their long positions.
Today, Jill Sommers, a CFTC commissioner who is totally against us resigned.
It is possible that many rats are fleeing a leaking ship.
The Royal Canadian Mint announced that it two was rationing silver sales.
As this was announced, the silver price was tumbling. Go figure!!
Even with today's whacking of gold, our shiny yellow metal hit record levels of 150,000 Japanese yen/oz.
Julian Philips, an Austrian school economist provides an important commentary on the German repatriation of gold. He is of the opinion that the gold at the FRBNY is unallocated and if that is the case, the Americans would surely engage in massive derivatives on that in situ gold.Russia announced today that it was not going to buy any more risky paper sovereign assets and it will stick to gold. Already Russia has 950 tonnes of gold as official reserves.
Gold closed down $16.60 to finish the comex session at $1669.50. Silver also faltered down 71 cents to finish the day at $31.70. As expected, another raid was orchestrated by the bankers for two reasons:
i) options expiry on gold and silver metal contracts. The options expiry is Monday.
ii) the huge OI in silver and generally the bankers try and force silver holders to relinquish some of their long positions.
Today, Jill Sommers, a CFTC commissioner who is totally against us resigned.
It is possible that many rats are fleeing a leaking ship.
The Royal Canadian Mint announced that it two was rationing silver sales.
As this was announced, the silver price was tumbling. Go figure!!
Even with today's whacking of gold, our shiny yellow metal hit record levels of 150,000 Japanese yen/oz.
Julian Philips, an Austrian school economist provides an important commentary on the German repatriation of gold. He is of the opinion that the gold at the FRBNY is unallocated and if that is the case, the Americans would surely engage in massive derivatives on that in situ gold.Russia announced today that it was not going to buy any more risky paper sovereign assets and it will stick to gold. Already Russia has 950 tonnes of gold as official reserves.
In paper stories, the Spanish unemployment rates rises to 26.02% and both Spanish and Greek youth see their unemployment skyrocket past 55%. The total unemployment rate for all of the youth in the Euro zone is 20%.
Today, the oldest bank in the world Banca dei Paschi de Siena announced more derivative losses at its bank and these were off balance sheet and unknown to all. If this bank hid losses, you can imagine other banks in Italy and Spain did the same.
In USA news, the Kansas City Fed Mfg index fell again making 5 out of 5 regional areas saw their manufacturing sectors fall.
We will discuss these and other stories but first let us head over to the comex and assess trading today............
The total comex gold open interest fell dramatically today from 461,369 down to 455,918 for a loss of 5451 contracts. The mini raid yesterday certainly saw some of the weaker longs leave the gold arena. The non active front January gold month saw it's OI rise by 1 contract from 28 up to 29. We had zero notices filed yesterday so in essence we gained one contract or an additional 100 oz of gold will stand for delivery. The next big active delivery month is February and we are now only 1 week to go before first day notice. Here the OI fell from 180,044 down to 160,918 for a loss of a monstrous 19,126 contracts. I would have to say that anybody playing the comex as a leverage play is totally out of their mind. It would seem that the bankers knocked out approximately 15,000 longs who did not wish to play anymore as they refused to roll into April or June. It is amazing how they never learn. The estimated volume on the raid today was good at 207,341. The confirmed volume yesterday was less at 187,856.
The total silver comex OI shockingly rose today by 1916 contracts as the silver players are playing to a different drummer than gold. The new OI for tonight rests at 144,195 rising from yesterday's level of 142,279. No doubt the major object of interest in the raid on our precious metals today was to knock the silver "leaves" from the silver tree. We will certainly find out tomorrow but I doubt very much if many silver "leaves" were forced out.
The non active front January silver contract month saw it's OI fall from 31 down to 17 for a loss of 14 contracts. We had 15 delivery notices filed yesterday so again we gained one contract or an additional 5,000 oz of silver will stand in the January delivery month.The next big active delivery month is March and here the OI rose by 1084 contracts from 77,682 up to 78,766. The estimated volume at the silver comex today was good at 46,565. The confirmed volume yesterday was much less at 38,295.
The total silver comex OI shockingly rose today by 1916 contracts as the silver players are playing to a different drummer than gold. The new OI for tonight rests at 144,195 rising from yesterday's level of 142,279. No doubt the major object of interest in the raid on our precious metals today was to knock the silver "leaves" from the silver tree. We will certainly find out tomorrow but I doubt very much if many silver "leaves" were forced out.
The non active front January silver contract month saw it's OI fall from 31 down to 17 for a loss of 14 contracts. We had 15 delivery notices filed yesterday so again we gained one contract or an additional 5,000 oz of silver will stand in the January delivery month.The next big active delivery month is March and here the OI rose by 1084 contracts from 77,682 up to 78,766. The estimated volume at the silver comex today was good at 46,565. The confirmed volume yesterday was much less at 38,295.
Jan 24.2013 The January contract month
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
650.45 (Brinks,HSBC)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
0 (nil oz)
No of oz to be served (notices)
29 (2,900 oz)
Total monthly oz gold served (contracts) so far this month
968 (96,800 oz)
Total accumulative withdrawal of gold from the Dealers inventory this month
17,799.16
Total accumulative withdrawal of gold from the Customer inventory this month
317,417.61 oz
January 24.2013: The January silver contract month
Silver
Ounces
Withdrawals from Dealers Inventory 126,739.741 oz Withdrawals from Customer Inventory 314,869.145 oz (CNT,Delaware, Scotia,) Deposits to the Dealer Inventory nil Deposits to the Customer Inventory 1,017,030.07 oz (CNT, Brinks) No of oz served (contracts) 0 (nil oz) No of oz to be served (notices) 27 (135,000 oz) Total monthly oz silver served (contracts) 695 (3,545,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month 2,592,665.3 Total accumulative withdrawal of silver from the Customer inventory this month 8,227,640.3
Selected non redundant items of news......
The Big Picture behind Germany Taking Half of Its Gold Home
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch -GoldForecaster.com
-- Posted Thursday, 24 January 2013 | | Source: GoldSeek.com
Bundesbank announced last week that they’ll repatriate 674 metric tons of their total 3,391 metric tonne gold reserves from vaults in Paris and New York to restore public confidence in the safety of Germany’s gold reserves. The transfer from the Federal Reserve is set to take place slowly over a seven year period and will only be completed in 2020.
The Bundesbank, the central bank of Germany is to store half of its gold reserves in its own vaults in Frankfurt.
It is planning a phased relocation of 300 tonnes of gold to Frankfurt from New York and 374 tonnes to Frankfurt from Paris by 2020.
In doing so, the Bundesbank will have 50% of its gold reserves in Frankfurt, 37% in New York and 13% in London.
The Bundesbank said that it is focusing on the two primary functions in relocating its gold reserve, to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centers abroad within a short space of time.
Germany is the second largest gold holding country with 3,391.3 tonnes, behind the US with 8,133.5 tonnes.
Germany’s central bank will repatriate part of its $200 billion gold reserves stored in vaults in the Federal Reserve in New York and the Banque de France in Paris.
Before German reunification in 1990, 98% of Germany’s gold was stored abroad. The Bundesbank then started to bring its gold home and in 2000 transferred 931 tonnes from the Bank of England to Germany. It will continue to hold about 13% of its gold reserves in London, even after 2020.
With the introduction of the euro (12 years ago) the Bundesbank sees no need to hold any reserves at the Banque du France as it will no longer need them there for exchange for foreign currency, after all France uses the same currency now.
"This is above all a historical anomaly which is now being corrected," said David Marsh, chairman of think tank OMFIF, which issued a report earlier this month in which it foresaw growing importance for gold due to uncertainty stemming from the rise of China’s Yuan as an alternative to the dollar.
Why?
· Are the nations where the gold is held the right places to store it? What if they face crises themselves? Is the move being made because of expectations of crises in those countries? What future monetary scene did Germany see that prompted the moves we see now? Nearly all the world’s nations are acknowledging that China is headed to the top of the wealthy nations pile and is going to take the Yuan to a major global reserve currency, but the prospect of holding German or any other developed nation’s gold in the People’s Bank of China takes a leap of faith and an admission that power and wealth has moved East into politically unknown waters that is just too much at this time.
As we said above, the move of this gold to Frankfurt will allow time to ensure the central banks where the gold is held, to get hold of the gold if they do not have it at the moment. The prospect of developed world central banks now competing with those of the emerging world in the gold market may well start the next leg of the gold bull market because this new, persistent, price-insensitive buying has the power to take gold to a whole new level! We watch to see. If this does happen, then the whole nature of gold in the money system will change even before the changes are ‘officially’ accepted. Gold will be in a ‘de facto’ pivotal position in the monetary system again. It will be a short time from that point before it is ‘officially’ accepted then. The way will have been paved for China to arrive on the scene and gold to have a vital function in the monetary system between two very different and unconnected, politically and economically, power blocs, the developed world and the emerging world with China as its hub.
The last time the world was divided on this basis was at the start of both world wars. The consequences to the monetary world then were so devastating and saw the destruction of national currencies on both sides, in Europe.
History teaches us another lesson. Ahead of the second war, when it became apparent that extremists had taken power in Germany and war became a probability again, gold came into the picture very forcefully. We are all aware of the 1933 confiscation of gold then, with the stated objective of expanding the money supply through the devaluation of the dollar in the U.S. but one side of that event has not been the subject of full public examination.
Is the fear of future crises in those countries a motive for the move of Germany’s gold back home? It certainly was so in Venezuela’s case, fearful of the U.S.’s power over its gold and reserves. We don’t expect any further statement on the reasons from Germany because that’s the nature of central banks. But history tells us that there are other reasons which discount the future. These confirm the move of gold back to the monetary system and why confiscation of private gold has become a probability in the future too.
When the U.S. dollar was devalued in 1935, it was done so only in terms of gold. It was not devalued against foreign currencies. Exchange rates were then fixed against each other. Other governments did not devalue their currencies against gold. The result was that while gold was trading outside of the U.S. in the foreign currency equivalent of $20, there it was trading at $35 in the U.S.
With markets relatively unsophisticated in those days, alongside limited communication abilities the original “arbitrageurs” [dealers between two markets] found they could buy gold at the foreign currency equivalent of $20 and sell it into the U.S. for $35. Is it any wonder that they U.S. gold stocks roared up to 26,000+ tonnes?
Was this a financial error in an undeveloped world? We have no doubt it was not. It was the ideal quick way to shift the gold reserves of Europe away from the war zone to the relative safety of the U.S. The war arrived in Europe four years later.
But foreign governments weren’t stupid. European governments permitted this move, even though it was seen as a market event. Remember that gold was the basis of money then so such a shift had to happen with government approval. This had to happen within the monetary system in force at the time. The fact that it happened so smoothly implied total government cooperation.
We see it also as an example of how the banks work completely with monetary authorities to ensure complete control over the monetary system. The same is true today as we see the efforts of governments primarily directed at repairing the banking system and government finances with scant attention to the national economies below them.
With a war on the way Europe sent its gold to the U.S. without governments being seen to do it. The move came about as a result of ‘market forces’.
But you may rightly say that surely that wasn’t the end of the story? Of course not!
With a huge U.S. army based in Europe after the war, the flood of dollars from the U.S. to Europe happened from the forties right through to the sixties [Eurodollars] continued. European nations, including France, Italy, Switzerland and Germany led by President de Gaulle, kept selling their U.S. dollars for gold. Once Europe’s gold returned to it [as the war was out of the way and reconstruction just about complete], Europe had its gold back. Then the change in the monetary system changed and the dollar, the exclusive currency in which nations could buy their oil to run their economies with closed the gold window and excluded gold from the day-to-day system but remained in national vaults. It was then that the experiment, now 42 years old, in un-backed paper currencies began. European central banks were then rewarded by the extraordinary rise in the gold price in the seventies and eighties.
This two-way process of gold to and from the U.S. only became visible with hindsight.
and.....
Russian central bank to keep buying gold, moving away from risky paper assets
Submitted by cpowell on Thu, 2013-01-24 16:04. Section: Daily Dispatches
By Darya Korsunskaya
Reuters
Thursday, January 24, 2013
DAVOS, Switzerland -- The Russian central bank will continue to buy gold as it seeks to diversify its foreign reserves away from paper assets it views as risky, First Deputy Chairman Alexei Ulyukayev said today.
The Bank of Russia has built up the world's fourth-largest foreign reserves, worth $530 billion, by buying oil export dollars to keep the rouble competitive. The hoard includes two rainy-day budget funds that guard against fiscal shocks.
The bank has also been a bullion buyer and the share of gold in its reserves is approaching a medium-term target of 10 percent, raising questions over whether it would keep buying gold.
Ulyukayev, speaking during the World Economic Forum, said the central bank would continue to buy gold, but gave no indication on whether there would be any change in the share of its reserves it allocates to the precious metal.
"We are buying metal and will continue to pursue this course," Ulyukayev told reporters in Davos. "This is a course of asset diversification in a situation when investing in securities or deposits remains risky."
Russia's central bank is undertaking a shift from a managed float of the rouble to inflation targeting, which is leading it to scale back its accumulation of forex via market interventions as it fine-tunes interest rate policy.
But the government wants to bolster its ability to withstand economic shocks, and will transfer $30 billion in surplus revenues from last year to its fiscal Reserve Fund, meaning that the central bank's reserves will grow.
Ulyukayev oversees the Bank of Russia's asset management and is viewed as a contender to take the helm when Chairman Sergei Ignatyev retires in June. He dodged a question when asked whether President Vladimir Putin had chosen him for the job.
"It's good that he's made up his mind -- better an end to the horror than horror without end," joked Ulyukayev, a liberal economist who has published his own book of poetry.
The Kremlin dismissed reports that Putin had already made up his mind. "The process continues, but not as actively as some are writing -- there's still plenty of time," Dmitry Peskov told Reuters. A candidate should be chosen in March.
Ulyukayev, 56, has weighed into an intensifying debate over the "currency wars" that have broken out as advanced economies pursuing aggressive monetary stimulus in a bid to grow their way out of a debt trap.
He recently accused Japan of "protectionist monetary policy" and, detailing the current composition of the central bank's foreign exchange reserves, he made no mention of the yen.
According to a breakdown given a year ago, the central bank held 1.6 percent of its forex reserves in yen. It was not immediately clear whether or when that position had been sold.
Russian bankers in Davos said, meanwhile, that it would make sense for the central bank to expand its allocation to gold.
Another source familiar with the central bank's thinking said, however, that there were no plans to change the 10 percent share. Russia's central bank bought 80 tonnes of gold last year, and it plans to buy a similar amount in 2013.
At the end of last year, the central bank held nearly 950 tonnes of gold, worth some $51 billion, its figures show.
It owned 400 tonnes of gold at end of 2006 and the price of the yellow metal has since rallied by $1,000 as the regulator bought up around half of Russia's gold mining output.
Giving a breakdown of the currency portion of Russia's foreign reserves, Ulyukayev said the U.S. dollar accounted for 46 percent and the euro 40.5 percent.
Sterling has a 9 percent share, the Canadian dollar 3 percent, and the Australian dollar, added to Russia's reserves last year, at 2 percent.
Separately, he said that inflation could exceed 7 percent in February but should start to ease from March onward. Consumer inflation reached 6.6 percent in 2012.
He saw no grounds for further monetary stimulus but left open the direction of the central bank's next interest-rate move. "It could be one way or the other," he told reporters.
endThe following is interesting:
Commissioner Jill Sommers Announces her Resignation
Washington, DC – Today, Commissioner Jill Sommers made the following statement:
“As I prepare to leave the Commodity Futures Trading Commission I would like to acknowledge the hard work and dedication of my fellow Commissioners and the many talented staff with whom I have had the pleasure of working for the past five years. While many challenges remain in finalizing the implementation of the Dodd-Frank Act, I have every confidence that the American public will be well-served by their continuing efforts.”
###
I wonder if something is bothering her on the silver front!!
and from Max Keiser....
Now the Swiss ask: “Where’s our gold?”
Max -
Greetings
There’s an initiative in Switzerland demanding to know where the Swiss Gold is. They have already 90,000 signatures.
You can read about it here: http://www.20min.ch/finance/news/story/Gold-Initiative-bereitet-der-SNB-Kopfzerbrechen-12181140
Ounces
| |
Withdrawals from Dealers Inventory in oz
|
nil
|
Withdrawals from Customer Inventory in oz
|
650.45 (Brinks,HSBC)
|
Deposits to the Dealer Inventory in oz
|
nil
|
Deposits to the Customer Inventory, in oz
| nil |
No of oz served (contracts) today
|
0 (nil oz)
|
No of oz to be served (notices)
|
29 (2,900 oz)
|
Total monthly oz gold served (contracts) so far this month
|
968 (96,800 oz)
|
Total accumulative withdrawal of gold from the Dealers inventory this month
|
17,799.16
|
Total accumulative withdrawal of gold from the Customer inventory this month
| 317,417.61 oz |
January 24.2013: The January silver contract month
| Silver |
Ounces
|
| Withdrawals from Dealers Inventory | 126,739.741 oz |
| Withdrawals from Customer Inventory | 314,869.145 oz (CNT,Delaware, Scotia,) |
| Deposits to the Dealer Inventory | nil |
| Deposits to the Customer Inventory | 1,017,030.07 oz (CNT, Brinks) |
| No of oz served (contracts) | 0 (nil oz) |
| No of oz to be served (notices) | 27 (135,000 oz) |
| Total monthly oz silver served (contracts) | 695 (3,545,000 oz) |
| Total accumulative withdrawal of silver from the Dealers inventory this month | 2,592,665.3 |
| Total accumulative withdrawal of silver from the Customer inventory this month | 8,227,640.3 |
Selected non redundant items of news......
-- Posted Thursday, 24 January 2013 | | Source: GoldSeek.com
Bundesbank announced last week that they’ll repatriate 674 metric tons of their total 3,391 metric tonne gold reserves from vaults in Paris and New York to restore public confidence in the safety of Germany’s gold reserves. The transfer from the Federal Reserve is set to take place slowly over a seven year period and will only be completed in 2020.
The Bundesbank, the central bank of Germany is to store half of its gold reserves in its own vaults in Frankfurt.
It is planning a phased relocation of 300 tonnes of gold to Frankfurt from New York and 374 tonnes to Frankfurt from Paris by 2020.
In doing so, the Bundesbank will have 50% of its gold reserves in Frankfurt, 37% in New York and 13% in London.
The Bundesbank said that it is focusing on the two primary functions in relocating its gold reserve, to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centers abroad within a short space of time.
Germany is the second largest gold holding country with 3,391.3 tonnes, behind the US with 8,133.5 tonnes.
Germany’s central bank will repatriate part of its $200 billion gold reserves stored in vaults in the Federal Reserve in New York and the Banque de France in Paris.
Before German reunification in 1990, 98% of Germany’s gold was stored abroad. The Bundesbank then started to bring its gold home and in 2000 transferred 931 tonnes from the Bank of England to Germany. It will continue to hold about 13% of its gold reserves in London, even after 2020.
With the introduction of the euro (12 years ago) the Bundesbank sees no need to hold any reserves at the Banque du France as it will no longer need them there for exchange for foreign currency, after all France uses the same currency now.
"This is above all a historical anomaly which is now being corrected," said David Marsh, chairman of think tank OMFIF, which issued a report earlier this month in which it foresaw growing importance for gold due to uncertainty stemming from the rise of China’s Yuan as an alternative to the dollar.
Why?
· There have been widespread stories that the Fed does not have the gold to return as gold held for governments is usually, ‘unallocated’. This suggests that the German gold reserves were not ‘allocated’. Ordinarily, central bank monetary reserves should be held in an ‘allocated’ format to evidence to whom they belong. As it is, held in an ‘unallocated’ form, in simplistic terms, this means that should the Fed fail, foreign central banks holding their gold there would be that unsecured creditors. This concern has been voiced inside Germany. It has been noted that the gold of Germany has not been audited in the past and it should be, on a regular basis. The German Court of Auditors told legislators that the gold had "never been verified physically" and ordered the Bundesbank to secure access to the storage sites. It called for repatriation of 150 tons over the next three years to test the quality and weight of the gold bars. But Germany has decided to move more than in this recommendation. It is said that Frankfurt has no register of the numbered gold bars.
· We noted that it is going to take 7 years or 10 shipments a year to move it to Germany. This is odd because it can be done much faster. Are they allowing the banks from which it is being drawn to pull it back from those to whom it has been leased? If this is the case and they have to go out and buy the gold to supply Germany with, will we see the three central banks [the Fed, the Bank of England and the Banque de France] enter the open gold market as buyers of the gold they can’t access in that time or has seven years been decided on because this matches the maturation of the leases?
· The function of gold reserves is to ensure the flow of trade in such critical times that it is the last remaining asset a nation has that is acceptable to overseas creditors, when other national assets fail. As Greenspan put it, it is ‘money in extremis’. But is it necessary to keep all a nations gold outside the country for this purpose? The decision to repatriate half the gold only leaves gold available in the world’s financial centers for such purposes, while the gold held at home is available to be sent elsewhere. The problem of holding gold at home is that if it is needed for creditor payment it resides in the jurisdiction of the debtor, not a happy position.
· As we said above, it appears reasonable to think that as France is in the same currency, there seems little point in holding any of Germany’s gold in France. With the U.K. still using the pound sterling, keeping Germany’s gold there still makes sense. The same applies to the U.S. which remains the wealthiest nation in the world, at the moment.
· Are the nations where the gold is held the right places to store it? What if they face crises themselves? Is the move being made because of expectations of crises in those countries? What future monetary scene did Germany see that prompted the moves we see now? Nearly all the world’s nations are acknowledging that China is headed to the top of the wealthy nations pile and is going to take the Yuan to a major global reserve currency, but the prospect of holding German or any other developed nation’s gold in the People’s Bank of China takes a leap of faith and an admission that power and wealth has moved East into politically unknown waters that is just too much at this time.
As we said above, the move of this gold to Frankfurt will allow time to ensure the central banks where the gold is held, to get hold of the gold if they do not have it at the moment. The prospect of developed world central banks now competing with those of the emerging world in the gold market may well start the next leg of the gold bull market because this new, persistent, price-insensitive buying has the power to take gold to a whole new level! We watch to see. If this does happen, then the whole nature of gold in the money system will change even before the changes are ‘officially’ accepted. Gold will be in a ‘de facto’ pivotal position in the monetary system again. It will be a short time from that point before it is ‘officially’ accepted then. The way will have been paved for China to arrive on the scene and gold to have a vital function in the monetary system between two very different and unconnected, politically and economically, power blocs, the developed world and the emerging world with China as its hub.
The last time the world was divided on this basis was at the start of both world wars. The consequences to the monetary world then were so devastating and saw the destruction of national currencies on both sides, in Europe.
History teaches us another lesson. Ahead of the second war, when it became apparent that extremists had taken power in Germany and war became a probability again, gold came into the picture very forcefully. We are all aware of the 1933 confiscation of gold then, with the stated objective of expanding the money supply through the devaluation of the dollar in the U.S. but one side of that event has not been the subject of full public examination.
Is the fear of future crises in those countries a motive for the move of Germany’s gold back home? It certainly was so in Venezuela’s case, fearful of the U.S.’s power over its gold and reserves. We don’t expect any further statement on the reasons from Germany because that’s the nature of central banks. But history tells us that there are other reasons which discount the future. These confirm the move of gold back to the monetary system and why confiscation of private gold has become a probability in the future too.
When the U.S. dollar was devalued in 1935, it was done so only in terms of gold. It was not devalued against foreign currencies. Exchange rates were then fixed against each other. Other governments did not devalue their currencies against gold. The result was that while gold was trading outside of the U.S. in the foreign currency equivalent of $20, there it was trading at $35 in the U.S.
With markets relatively unsophisticated in those days, alongside limited communication abilities the original “arbitrageurs” [dealers between two markets] found they could buy gold at the foreign currency equivalent of $20 and sell it into the U.S. for $35. Is it any wonder that they U.S. gold stocks roared up to 26,000+ tonnes?
Was this a financial error in an undeveloped world? We have no doubt it was not. It was the ideal quick way to shift the gold reserves of Europe away from the war zone to the relative safety of the U.S. The war arrived in Europe four years later.
But foreign governments weren’t stupid. European governments permitted this move, even though it was seen as a market event. Remember that gold was the basis of money then so such a shift had to happen with government approval. This had to happen within the monetary system in force at the time. The fact that it happened so smoothly implied total government cooperation.
We see it also as an example of how the banks work completely with monetary authorities to ensure complete control over the monetary system. The same is true today as we see the efforts of governments primarily directed at repairing the banking system and government finances with scant attention to the national economies below them.
With a war on the way Europe sent its gold to the U.S. without governments being seen to do it. The move came about as a result of ‘market forces’.
But you may rightly say that surely that wasn’t the end of the story? Of course not!
With a huge U.S. army based in Europe after the war, the flood of dollars from the U.S. to Europe happened from the forties right through to the sixties [Eurodollars] continued. European nations, including France, Italy, Switzerland and Germany led by President de Gaulle, kept selling their U.S. dollars for gold. Once Europe’s gold returned to it [as the war was out of the way and reconstruction just about complete], Europe had its gold back. Then the change in the monetary system changed and the dollar, the exclusive currency in which nations could buy their oil to run their economies with closed the gold window and excluded gold from the day-to-day system but remained in national vaults. It was then that the experiment, now 42 years old, in un-backed paper currencies began. European central banks were then rewarded by the extraordinary rise in the gold price in the seventies and eighties.
This two-way process of gold to and from the U.S. only became visible with hindsight.
and.....
Russian central bank to keep buying gold, moving away from risky paper assets
Submitted by cpowell on Thu, 2013-01-24 16:04. Section: Daily Dispatches
By Darya Korsunskaya
Reuters Thursday, January 24, 2013
DAVOS, Switzerland -- The Russian central bank will continue to buy gold as it seeks to diversify its foreign reserves away from paper assets it views as risky, First Deputy Chairman Alexei Ulyukayev said today.
The Bank of Russia has built up the world's fourth-largest foreign reserves, worth $530 billion, by buying oil export dollars to keep the rouble competitive. The hoard includes two rainy-day budget funds that guard against fiscal shocks.
The bank has also been a bullion buyer and the share of gold in its reserves is approaching a medium-term target of 10 percent, raising questions over whether it would keep buying gold.
Ulyukayev, speaking during the World Economic Forum, said the central bank would continue to buy gold, but gave no indication on whether there would be any change in the share of its reserves it allocates to the precious metal.
"We are buying metal and will continue to pursue this course," Ulyukayev told reporters in Davos. "This is a course of asset diversification in a situation when investing in securities or deposits remains risky."
Russia's central bank is undertaking a shift from a managed float of the rouble to inflation targeting, which is leading it to scale back its accumulation of forex via market interventions as it fine-tunes interest rate policy.
But the government wants to bolster its ability to withstand economic shocks, and will transfer $30 billion in surplus revenues from last year to its fiscal Reserve Fund, meaning that the central bank's reserves will grow.
Ulyukayev oversees the Bank of Russia's asset management and is viewed as a contender to take the helm when Chairman Sergei Ignatyev retires in June. He dodged a question when asked whether President Vladimir Putin had chosen him for the job.
"It's good that he's made up his mind -- better an end to the horror than horror without end," joked Ulyukayev, a liberal economist who has published his own book of poetry.
The Kremlin dismissed reports that Putin had already made up his mind. "The process continues, but not as actively as some are writing -- there's still plenty of time," Dmitry Peskov told Reuters. A candidate should be chosen in March.
Ulyukayev, 56, has weighed into an intensifying debate over the "currency wars" that have broken out as advanced economies pursuing aggressive monetary stimulus in a bid to grow their way out of a debt trap.
He recently accused Japan of "protectionist monetary policy" and, detailing the current composition of the central bank's foreign exchange reserves, he made no mention of the yen.
According to a breakdown given a year ago, the central bank held 1.6 percent of its forex reserves in yen. It was not immediately clear whether or when that position had been sold.
Russian bankers in Davos said, meanwhile, that it would make sense for the central bank to expand its allocation to gold.
Another source familiar with the central bank's thinking said, however, that there were no plans to change the 10 percent share. Russia's central bank bought 80 tonnes of gold last year, and it plans to buy a similar amount in 2013.
At the end of last year, the central bank held nearly 950 tonnes of gold, worth some $51 billion, its figures show.
It owned 400 tonnes of gold at end of 2006 and the price of the yellow metal has since rallied by $1,000 as the regulator bought up around half of Russia's gold mining output.
Giving a breakdown of the currency portion of Russia's foreign reserves, Ulyukayev said the U.S. dollar accounted for 46 percent and the euro 40.5 percent.
Sterling has a 9 percent share, the Canadian dollar 3 percent, and the Australian dollar, added to Russia's reserves last year, at 2 percent.
Separately, he said that inflation could exceed 7 percent in February but should start to ease from March onward. Consumer inflation reached 6.6 percent in 2012.
He saw no grounds for further monetary stimulus but left open the direction of the central bank's next interest-rate move. "It could be one way or the other," he told reporters.
endThe following is interesting: Commissioner Jill Sommers Announces her Resignation
Washington, DC – Today, Commissioner Jill Sommers made the following statement:
“As I prepare to leave the Commodity Futures Trading Commission I would like to acknowledge the hard work and dedication of my fellow Commissioners and the many talented staff with whom I have had the pleasure of working for the past five years. While many challenges remain in finalizing the implementation of the Dodd-Frank Act, I have every confidence that the American public will be well-served by their continuing efforts.”
###
I wonder if something is bothering her on the silver front!!
and from Max Keiser....
Now the Swiss ask: “Where’s our gold?”
Max -
Greetings
There’s an initiative in Switzerland demanding to know where the Swiss Gold is. They have already 90,000 signatures.
You can read about it here: http://www.20min.ch/finance/news/story/Gold-Initiative-bereitet-der-SNB-Kopfzerbrechen-12181140 |
No comments:
Post a Comment