September 9, 2014

Which Countries Central Banks hoarding Gold and why?

September 9, 2014. Moscow. (ONN) Signs of the US Dollar’s eventual demise are appearing more and more. This time, it comes in the form of a report detailing gold bullion purchases by government central banks around the world. Central banks have increased their holdings of gold for 14 straight quarters now. Results from the most recent second quarter confirm the trend continued, jumping 28 percent from the same period in 2013. The most curious question is, who’s stockpiling all that gold and why?

The ‘gold vault’ at the Federal Reserve of New York. Image courtesy of GoNYC.com.

US Dollar bubble

Many economists will tell you that the reason major governments around the world are stockpiling gold is because there’s nothing safer to invest their country’s treasury in. The US Dollar used to be the globe’s safe haven, but no more. The Barack Obama Presidency has okayed the Federal Reserve’s printing of $85 billion per month out of thin air, every month of nearly his entire administration. The amount it’s costing the American people is in the trillions. The fact is, by printing trillions and trillions of unbacked US Dollars, the US Dollar has lost its value.

If one looks at the day-to-day value of a US Dollar on the global markets, it isn’t changing too much - a surprise to many reputable economists. Many like Peter Schiff have said the Dollar should have collapsed already. Others insist its value is backed only by the threat of military destruction by the US of any nation that calls out the Dollar on its worthless value. Read the 2012 Whiteout Press article, ‘Economist Peter Schiff warns of US Financial peril’ for more information.

Not the safe investment it once was

The US Dollar used to have a double-safety. It was the safest investment in the world, compliments of a strong military and an uncorrupt democracy. It was also used in international business transactions, as the only currency every nation used. But all of that has changed. The world is in the process of dumping the US Dollar before they’re stuck holding hundreds of billions of worthless greenbacks, trillions in China’s case. Read the recent Whiteout Press article, ‘133 G77 Nations vow to destroy America’s New World Order’ for more information.






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As evidenced by the three-year stretch of central banks increasing their gold holdings, the US Dollar is slowly losing its title as the safest investment in the world. The recent report detailing central bank gold purchases shows that for Q2-2014, government banks increased their purchases by 28% over the previous year. In Q2-2013 central banks increased their gold holdings by 92.1 tons. In the same just-completed quarter, that amount jumped to 117.8 tons of gold.

A report from Profit Confidential quotes the World Gold Council explaining, ‘Economic and geopolitical events throughout the world are sources of ongoing instability and uncertainty. Such events reinforce the requirement for appropriate risk management by central banks through holding gold reserves for asset diversification.’ Normally, those ‘geopolitical events’ are wars in the Middle East or bond defaults in Asia. This time, they’re referring to America’s economic policies and situation.

A new global currency

It’s no secret that the ‘BRICS’ countries - Brazil, Russia, India, China and South Africa - have agree to replace America’s world economy with their own creation. And it won’t be based on the US Dollar. Rumors continue to swirl that US allies like France and Germany are preparing to dump the US Dollar and join the BRICS. And specifics have been worked out to such an extent that it’s already been announced that China will be the major financial backer of their new global currency, while Russia will host the infrastructure and military defense of the new system. 133 countries around the world have already unofficially committed to the new global economic system.

That brings us to the most ominous part of the report detailing changes in central bank gold holdings. While the gold stockpiling has jumped an impressive 28% versus the same quarter in 2013 overall, the bulk of the most recent hoarding is being done by three specific countries. And all three are neighbors and former members of the Soviet Union. The above report covering Q2-2014 details, ‘Russia purchased 54 tons of gold bullion, Kazakhstan purchased seven tons, and Tajikistan bought three tons. Combined, just these three central banks made up more than 54% of all the official purchases of gold bullion in the second quarter.’



A report from CNBC in the first quarter of this year credited China’s stockpiling of gold as its way of introducing its own Yuan as the global currency to replace the Dollar. The financial cable network’s analyst said, “The massive flow of gold into the country does make it seem plausible that they [Chinese authorities] could be moving in the direction of using gold in the effort to internationalize the currency and escape what is seen as a domineering Dollar.”

Central banks hoarding gold bullion

Another report that shows ominous trends among gold purchasers comes from 247WallSt.com. They detail that while mainstream news reports tell a story of dropping global demand for gold in 2013, those figures are skewed by Exchange Traded Funds (ETF) that represent gold derivatives. Looking only at the net sale-purchase of physical gold bars, gold sales may have actually gone up in 2013. And 7 of the world’s 40 central banks were the biggest net purchasers. Together, those seven central banks accounted for 79% of net gold increases among all 40 central banks in 2013.

Azerbaijan topped the list with its purchase of 20 tons of gold, but only because it’s the country’s first gold acquisition. Echoing the results from the second quarter of 2014, Russia proved to be the top hoarder of gold bullion in 2013 according to the World Gold Council annual report analyzed by 247WallSt.com. The country increased its physical gold holdings by 77.4 tons while simultaneously reducing its foreign currency exposure from 9% to 8% of total holdings.

The most curious entrant into gold-hoarding central banks is Turkey. The report showed that from 2012 to 2013, the country added 160 tons of gold to its reserves while also shrinking its holdings of foreign currencies from 16% to 15%. The report also mentions Kazakhstan. While increasing their gold holdings in Q2-2014, the data shows it was a continuation from 2013 when the country’s central bank added 28.7 tons.

One thing all the reports agree on is that the three-year transfer of gold bullion from Western nations to Eastern nations continues, with China passing India as the world’s largest importer-producer in the world for the first time. Still, both countries lag behind other world powers when it comes to total gold holdings. From a list published at the end of 2013 by Business Insider, here are the top 10 hoarders of gold bullion. It’s worth mentioning that the US is accused of holding gold-plated tungsten bars, while nobody seems to know where Germany’s gold bullion is at, only that the US is holding it for them and won’t give it back.



Top 10 gold holdings by country:

Country - Tons of gold

1. United States – 8,133

2. Germany – 3,387

3. Italy – 2,451

4. France – 2,435

5. China – 1,054

6. Switzerland – 1,040

7. Russia – 1,015

8. Japan – 765

9. Netherlands – 612

10. India – 557

*The International Monetary Fund (IMF) also supposedly holds 3,217 tons of gold.

 

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