Ever since 2010, central banks overall have been net buyers of gold. This is continuing. It appears that they are now committed to gold.
They got on board late. Gold’s price peaked in 2011.
The central banks that are buying are not in the West. They are in the East. The list of buyers indicate what is happening. In July 15 central banks were buyers. Turkey and Russia bought. So did Kazakhstan.
But Turkey is the interesting one. Turkey lifted its gold holdings by 22.5 tonnes, the biggest increase seen among 15 central banks. Turkey is now #11 in world gold reserves: up to 464 tonnes. A year ago, Turkey adopted a new policy. It lets commercial banks store some of their reserves in gold.
The one Western nation that bought was France. It bought 1,000 troy ounces of gold. That’s not much. Nobody knows why it bothered.
Other buyers: Kazakhstan, Azerbaijan, and the Kyrgyz Republic, and Mozambique.
Which central banks sold gold? Mexico, Denmark and Canada.
The numbers are small. The pattern counts. When central banks sell gold, other central banks buy it, plus a little more.
This indicates a shift of opinion. Central bankers want more of what Keynes called a barbarous relic in their vaults — or at least in their pile of gold bars in the vault of the New York Federal Reserve Bank.
Reports don’t say if these Eastern nations’ central banks are taking delivery. They should. Germany asked for some of its gold early this year. “Sorry, Hans. You must wait seven years.”
This indicates what the name of the game is. Fractional reserves have taken over. “You can get your gold at any time, as long as you don’t ask for it.”
Do you want to know why the Federal Reserve System resists an audit by the Government Accountability Office? Because such an audit would trace the actual ownership of the gold that the FED swears, cross its heart and hopes to die, still belongs to the U.S. government.
The American public neither knows nor cares. Neither do foreign populations. That is the advantage central governments and central banks have enjoyed for 99 years. The voters have been taught that it does not matter.
Meanwhile, all currencies depreciate.