Archive for the ‘Central bank’ Tag

Gold Repatriation

Central Banks may *never* repatriate their citizens gold reserves.

What central bankers choose to ignore:

–Germany

” the Bundesbank asked to have some portion of its gold

sitting supposedly – in the NY Fed vault in NYC
sent back Germany.
The TOTAL amount is 1800 tonnes.
After behind the scenes negotiations,
the Fed agreed to ship 300 tonnes back
over seven years.
To this day, the time required for that shipment
has never been explained.”

“…officials at the Bank of England told German officials
that allowing them in to the vault
to perform physical audits of their gold
just isn’t possible
because there isn’t enough room,
or enough “suitable rooms,”
in which to do it.

–Netherlands

“Almost 300 “concerned Netherlands citizens”
have joined the German initiative for insight about the gold reserves.
In a petition the citizens committee demands “full openness on the quantity and storage location of the Netherlands’ physical gold, and on the extent and nature of the gold claims.”

Klaas Knot, President of the DNB,
said 90 per cent of the Netherlands’ gold reserves
are kept overseas,
claiming further that “the gold is fine where it is.”
Much of that figure is placed in vaults in New York City,
without identifying names of banks or institutions.”

–Azerbaijan

“JP Morgan, one of the bullion banks that acts as a custodian,
will see 15mt of gold leave its London vaults
*over an undisclosed period of time*,
according to the state oil fund of Azerbaijan.”

–Mexico

” the Mexican central bank
has never inspected the gold it bought, has not performed purity

tests on it
and doesn’t even have a list
of all the gold bars stored in London.”

Banxico was finally forced to reveal its position in gold.
When pressed for specifics about its gold holdings
they answered,
“it is not possible to specify with certainty
the number of bars purchased”

–Poland

“Poland currently owns around 109 tons of gold deposited abroad.

Most of the reserves are stored in the UK”

“a movement to repatriate national gold reserves
from vaulting … at the Bank of England in London
has arisen in Poland.”

“In order to put pressure on the Polish National Bank, advocates

have launched an action entitled. ‘Give Us Our gold’. ”

Switzerland

“Switzerland is to hold a referendum
that would … repatriate gold reserves held abroad
and keep them at home.”

“Swiss People’s Party’s efforts
to gain enough signatures
to force the Swiss National Bank (SNB), …
reports, they reached the required 100,000 signature mark”
“it is not uncommon
for the period between an initiative being accepted for referendum

and a vote being held
to extend to several years.”

Finland

most of Finland’s 49.1 tons of gold reserves is held outside the country’s borders, the bulk of it in London.
Leaders of a Finnish repatriation movement are calling for a national referendum on the matter no later than May 2014.

“Ecuador,

[is] demanding that one-third of its foreign holdings be returned to in-country custody.

Ecuador’s gold claims amount to only 26.3 tons”

But when the Central Bank
was serious about repatriating their citizen’s gold reserves:

–Venezuela

Venezuela demanded the return of its 200 tonnes
held in London, NYC and Switzerland
and received it all within about four months.

Meanwhile:

Chinese Gold Reserves increase:

Chinese Gold Reserves Increase

Chinese Gold Reserves Increase

Russian Gold Reserves increase:

Russian Gold Reserves increase

Russian Gold Reserves increase

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The future price movement of gold may be forecast.

As of today, Jan 25th 2013,
the gold price is currently falling.
So, it is good to remember
the long term future price movement of gold
may be forecast.

–The gold price correlates with the US National Debt.
National Debt vs. Gold Price 1

And the Fed plans to continue to print:

Dec 13, 2012
“The Federal Reserve officially announced QE4+2 yesterday….
The FOMC statement said it would consider raising the federal funds rate above 0%-0.25%
if the unemployment rate fell to 6.5% or the inflation rate hit 2.5%.”

and *must* continue to print.

https://britefire.wordpress.com/2012/07/02/313/

Jan 24, 2013
“The Federal Reserve pushed its balance sheet beyond $3 trillion
for the first time this week
while undertaking open-ended purchases
of Treasuries and mortgage-backed securities

Fed Balance Sht 2

and major international Central Banks
will continue to spend

Central Bank Balance Sheets 3

–The gold price correlates with the Debt Limit.

Debt Limit vs. Gold Price 4

“The Treasury Department’s own projections
have US debt at $23 trillion by 2015
a 64 percent increase to the current debt limit.
As the Fed continues to print
the Monetary Base increases.”

–The gold price also correlates with the Monetary Base.

MZM Money Stock vs. Gold Price 5

And, the Monetary Base is increasing.

MZM Money Stock 6

Trend Channel

Gold Trend Channel LogScale 7

Drive back target is base of pierce bar.

As in Feb 2004
and Mar 2009
now in Dec 2012
after the breakout
above the top of the W pattern
the target on the drive back down
has been the base of the bar
piercing the W top.

After this drive back target has been hit
the move has been
in the opposite direction
and gold has made substantial moves up.

The target has been hit.
The downward move in gold
is now likely complete.

Targ Hit

Below article posted Aug 2012

Since its Low on 12/29/11
Gold has been moving up
for longer than any other up move
since it’s Top on 9/6/11.

So, per Gann the trend is up.

$GOLD has now pierced
and GLD has now pierced
it’s W pattern center high
formed on 6/6/12.

When the center high is pierced
Per Gann this is a safe place to enter.

If the market moves
as it has in the past
we can then expect
based on the HUI chart:

1 2000
A launch straight up.

2 2004
A few weeks attempt
to break the bottom of the pierce bar
[close the gap]
then a launch straight up.

3 2009
A couple of weeks attempt
to break the bottom of the pierce bar
[close the gap]
then a launch straight up.

Factors affecting the future gold price.

Gold Lease Rates

“On September 6, 2011, gold reached a high of $1920;
but when bullion banks intervened by pushing gold lease rates
deep into negative territory in early September,
they made sure enough leased gold would reach the markets
to drive the price of gold lower.

“By late September, gold had fallen back to $1600;
and when gold began to again rise,
gold lease rates were pushed even lower
forcing gold this time below $1600.
The bullion banks one-two punch
took the momentum out of gold’s 27 % summer rally
and by year’s end gold would still be at $1600.

“Lease rates are calculated as:
London Interbank Offered Rate – Gold Forward Offered rate.

“LIBOR had been manipulated
lower than the Gold Forward Offered rate.,
resulting in negative gold lease rates.
Reform in LIBOR will make an end to this suppression.”

Gold as Tier 1 Asset

“if gold is officially confirmed as a “riskless” asset by the European Banking Authority,
then an increase in demand for gold may be seen in the EU.”

Printing Yen

“The Bank of Japan became the latest central bank
to announce further quantitative easing measures.

“If interest rates rose by a mere 2% for Japan,
they would be spending more than 70% of their budget
on just interest expense

“When the savings rates goes negative,
and it is a demographic certainty that it will,
JAPAN will either be forced to pay higher interest rates
or print massive amounts of yen
or cut government spending by equally massive amounts.”

An attempt by Western Central Banks
to recall their swapped and/or lent out gold.

“Over the past several years, we’ve collected data on physical demand for gold
Global annual gold mine supply … is actually lower than it was in year 2000,
there hasn’t been any large, publicly-disclosed seller of physical gold in the market
for almost two years.
Given the significant increase in physical demand
that we’ve seen over the past decade,
particularly from buyers in Asia,
it suffices to say that we cannot identify
where all the gold is coming from to supply it.

“Western central banks are probably under the impression
that the gold they’ve swapped and/or lent out is still legally theirs,
which technically it may be.
But if … those reserves are not physically theirs;
not physically in their possession…
then …”

An audit or an attempt by central banks to regain their gold
would support a higher gold market price.

Dollar as Reserve Currency

“As of, Thursday, Sept. 6,
any nation in the world that wishes from this point on,
to buy, sell, or trade crude oil,
can do using the Chinese currency,
not the American dollar.

“the Russian Federation agreed to sell oil to China
in any and all amounts they desired.
there is no limit.
And Russia will NOT sell or trade this crude oil to China
using the American dollar.”
Never, ever has crude oil been sold, bought, traded,
in any country in the world,
without using the American dollar.”

But,

“the $3.2 TRILLION in official DOLLAR RESERVES that China has accumulated
in maintaining the yuan’s semi-fixed peg to the dollar
tie Beijing’s policy hands.
That is because any hostile gesture,
such as a threat to shift out of dollars,
would destroy Chinese wealth.”

EuroDollars

John Williams of Shadowstats.com:
“there is 12 trillion in liquid dollar assets held outside the U.S.
it is only a matter of time before all the Fed money printing will “trigger a sell-off”

Causing the gold price to rise in US dollars.

The Three primary movers of the price of gold.   Leave a comment

Gold 2

1 The Trend
Eastern Central Bank buyers
most having made  purchases
in Q1 2012:

China, India, Russia, Vietnam,
Ukraine, Turkey, Argentina, Mexico,
Philippines, Khazakstan, Thailand,
Malaysia, Indonesia, Gulf States,
and now Iran.

And,

Over the past decade,
the demand mix has changed toward investment,
starting at 4% of demand in 2000 and growing to 38% by 2009.

Gold is in vogue.

2 Real Interest Rates

“The real interest rate
is the 3 Month T-bill Yeild
minus the CPI.”

“The Fed has pledged to keep rates at “exceptionally low levels”
at least through 2014.”

“The real interest rate
is the nominal interest rate
minus the EXPECTED rate of currency depreciation.

I read:
World money supply growth is 7% per year.
Gold supply increase is            1% per year.

3 Liquidity

the Fed has become a significant buyer of debt,
purchasing some 75 percent of US Treasuries last year
because there were no other buyers.”

Trillions in European bonds to be refinanced.