|
To say
that events are now taking place at the speed of light is an
understatement. It was just last Monday, I wrote a missive entitled “The
Mother of all Bank Runs”. In it I wrote about the German and Dutch
repatriations of gold which was then followed by the Belgians beginning
discussions on the same topic. As a final speculation, I mentioned that
“logically the Austrians would be next”. There was no way you could have
told me it would be less than one week until the same news would actually
come out of Austria!
Unlike the Germans, Dutch and Belgians who have gold
held in N.Y., Paris, and London, Austria holds 80% of their 280 tons of
gold concentrated in London. http://www.zerohedge.com/news/
These
four countries represent the core of the European Union. The EU is
located in Brussels and the ECB is located in Frankfurt so the “power centers”
(or financial centers) if you will are located within this “block” of
countries, let’s call them the “Nordic bloc”. These four are the strength
of the euro, they are the highest rated credits and for the most part they
alone dictate policy. …And now, ALL of them will be asking for
their gold to be returned to them. The same questions I asked last week
still apply, even more so now because of the addition of Austria. Why do
they want their gold returned and why now? There are other questions
which we can look at shortly.
First, “why”? Why
is there all of a sudden this rush by Holland, Belgium and Austria to follow
Germany’s lead in asking for their gold back. The obvious answer is
trust, or better said, lack of trust. For years there have been questions
as to whether or not “official gold” has been leased into the markets.
These questions have arisen because of the simple math of supply and
demand. If China, India and Russia have been gobbling up 100% of current
mine supply… then where is the supply coming from to meet the demand from the
rest of the world? If there was no trust issue whatsoever, these central
banks would not “bother” with where this gold is being held because it brings
up questions central banks would prefer you not think about. These
questions would obviously include “why” move the gold if it is already
“safe”? It also brings up the question of why bother if gold is really
not important in today’s financial world …as many central banks will have you
believe?
You see, for central
banks to ask for their gold must mean it has some importance to them,
right? For that matter, why have these countries not asked for dollars,
pounds or euro’s (from France) for the values of the gold held? Why are
these central banks asking for the actual metal? The answer of course is
because they know gold is real money and there is no substitute… in other
words, there is nothing “as good as gold” when it comes to money. I
cannot stress enough how big these actions are because these are central banks
bringing publicity to gold in a manner showing just how important the gold
really is to them! Let’s move on to other questions rather than rehash
last weeks missive. Why and why now are the main questions but I believe
these two are wrapped up by “why these four countries”? What this
obviously leads us to is the very real potential that the Eurozone which is an
imperfect union, will now be “splittable”! These four countries are the
center of the “have’s” with the rest of Europe being “have nots” for the most
part. These four country’s gold reserves amount to roughly 4,000
tons. Officially they would be number two in the world behind the U.S.,
assuming the U.S. has not already divested their gold (I believe we have),
“unofficially” this 4,000 tons would make them number two behind China if you
believe they 8,000 tons of gold or more (which I do). These four
countries with reserves of 4,000 tons will have the ability to set up a
northern or “Nordic euro” …especially if China revalues gold and re sets the
world’s financial system which looks very probable in my eyes.
Repatriating their gold
also does something else which few have thought of so far. Actually
having their gold in hand may just allow them to purchase energy from
Russia. Remember, Russia is testing their own clearing system to bypass
the West’s SWIFT system. Would Russia possibly refuse Western currencies
for their energy exports if they had a system up and running which could clear
rubles and yuan? You bet they would, especially during a time of
financial war. Is gold a western currency? Is it an eastern
currency? No, gold is the ULTIMATE currency, even Alan Greenspan concedes
this! This theory of a possible European breakup into northern and
southern euros has more legs if Russia were to accept the new Nordic” for
trade but refuse the “southern euro”. Would Russia have more “confidence”
and thus be more likely to accept the northern euro …if it is supported by
gold? Gold that is actually accounted for and held within these countries
own vaults as opposed to vaults controlled by N.Y. and London?
The answer of course is
“yes” but it also brings up another question which has a very humorous
answer! For a little background before I ask the question, do you
remember why all of this gold was moved to London and New York all those years
ago? That’s right, there was a fear Stalin or one of his successors
would roll tanks across Europe and take the gold …so the further away from
Russia this gold was …the better! Fast forward to present day, isn’t Mr.
Putin and Russia the “scary and aggressive” potential invaders of Europe?
Why would these countries want their gold within their borders at this EXACT
point in time if they have any worries of an aggressive neighbor called
Russia? Does this make any sense at all? It does, and the humor is
that these four countries apparently trust Mr. Putin and Moscow more than they
do the U.S., Britain and the West!
Let me wrap this up and
speculate a little as to what I believe is happening because it is clear
something IS happening. It can be no coincidence these four core European
countries want to repatriate their gold. It is also clear this action
signals a change of some sort in their “relations”. For this “block” of
countries (which is exactly what I believe they will be seen to be) to remove
gold from the West and placing it within marching distance from Moscow tells me
they trust “us” less than they fear Russia. I also believe they know
where this whole game is headed and who is leading it. I believe China
will back their currency with a “re marked” price of gold with Russia as their
right hand energy man. The game is going toward gold, not away, this
Nordic group is simply positioning themselves for when the starting gun is
fired.
While the West has tried
to “isolate” Russia, we will have succeeded only in isolating ourselves and
creating the “cause” for a run on our own banking system. I am not
talking about the paper Ponzi scheme banking system as this will also fall, I
am talking about an old fashioned and REAL run on the bank! This
“run” started slowly and ran for years as China accumulated what we foolishly
“gave away”. Now, it looks like the “run” is accelerating and the “core
four” are taking the attitude “he who panics first panics best”! None of
this had to happen but it has and is, simply because the West has done dirty business
and ruined credibility. There is absolutely no rationale whatsoever for
these banks to ask for their gold back if it is truly safe and they have full
and complete faith in the U.S. as custodian and enforcer of the rule of law.
Please understand, the
“core four” IS Europe. Other than Britain, Europe is supposed to be
America’s number one ally. It is obvious allegiances all over the world
are changing. It is also obvious what is considered as “important” as far
as money and currencies are concerned is also changing, otherwise these
countries would accept dollars in lieu of their gold.. The West has bled
gold, trust and thus credibility while the East (and new northern Europe
partners?) has accumulated gold, trust and thus also credibility. “Power”
has always followed gold wherever it went.
If gold is leaving
London and New York, it is for a very good reason. I believe we may very
well see a “Nordic euro” that trades primarily with Russia and China as
opposed to the U.S. and Japan. No one has ever run their bank “just
for fun”, there has to be a reason. I can see no reason for these
four countries to act in unison on this issue unless trust is
being questioned and/or a break away from the other deadbeat EU
nations is planned …we will see shortly.
Bill Holter, Miles
Franklin associate writer.
No comments:
Post a Comment