The WSJ Dollar Index, a gauge of the dollar’s exchange rate against seven of the world’s most heavily traded currencies, is up 3.4% in the past two months, after barely budging in the first half of the year. That trend has only continued.
The Wall Street Journal on Tuesday stated that it rose 0.4% to its highest level since July 2013, as “a report showed U.S. manufacturing activity in August accelerating at the fastest pace in more than three years”.
That very well may be the case or it could be a loss of confidence in other currencies.
Nor does a rallying dollar change the fact that these following nations have all been large buyers of gold, and likely candidates for a future anti-dollar alliance. Some of them have already joined an anti-dollar alliance. But in order to truly safeguard themselves against the monstrous debt obligations worldwide and the debased US dollar, they must buy much, much more gold.
In recent memory gold and silver have been relatively forgotten as enough of the market believes we are in a recovering economy. The price of gold to silver on a day-to-day basis is not of much significance to us dollar vigilantes. Gold is insurance against what Jeff Berwick calls The End Of The Monetary System As We Know It (TEOTMSAWKI). Many institutions and people are happy with a low gold price. As they say, its a buying opportunity. That’s at least how these following nation-states and/or their citizens must see it.
Although it might seem that the following numbers paint a picture that these central banks have a lot of gold, the truth is that when compared to their actual capital reserves, a much different picture is painted. These central banks often have reserves which are just 1-2% of their overall capital. Their currencies are not backed by gold. The gold is virtually nothing versus the capital of the central banks. The following nations barely hold any reserves, let alone gold reserves. It’s part of a new trend of global central banks are heading towards a no-capital reserve world order.
India citizens buys gold. And lots of it. Premiums continually increase on gold in the nation and the legal and regulatory climate in regards to gold has been iffy. That, and the fact that China has overtaken India as a top consumer of gold, does not change the fact that the Indian government holds 557.7 tonnes of gold. Of all the nation’s reserves, 8.4% is gold. In 2009 India purchased 200 tonnes of gold in from the International Monetary Fund (IMF) marking the first sale of its type by the IMF in nearly one decade. As the second-largest consumer of gold on the planet, it’s no secret India loves gold, and particularly jewelry.
India, though, is an interesting case where perhaps, because of government meddling, bitcoins would be easier than gold to own. India gold smuggling has been on the rise lately due to new taxes on gold. Currently inflows of the yellow metal are restricted by government. With the nation’s festive period on the horizon, government agents are stealing more gold than ever due to increased smuggling.
The Netherlands has a storied economic history. The ignomious home to the first central bank, the country has made recent headlines by embracing bitcoin. But the nation’s sentiment towards gold bullion is of note. 612 tonnes of gold – 54% of its overall reserves – makes up the nation’s gold supply.
In Japan with the Yen and the government itself on the verge of collapse the nation holds 765.2 tonnes of gold, making up 2.6 percent of its reserves, making it one of the biggest national goldbugs on the planet. Makes sense after thirty years of quantitative easing.
Russia stands today in starker contrast to the western economic system than ever before, and this is underscored by the nation’s growing gold reserves. Russia maintains 1,015.1 tonnes of gold, which is 8.3% of its reserves. Having doubled its gold reserves in recent years, Russia will quicken its buying in the face of European Union and United States sanctions. In 2011, when Russia Prime Minister Vladimir Putin uttered the truth that the United States was “like a parasite” on the global economy, he simultaneously questioned the dominance of the dollar as world reserve currency.
Russia just boosted its gold reserves to the highest level since 1993, adding about $400 million to its reserves in July. Russia’s reserves surpassed Switzerland and China this year, having nearly tripled since the end of 2005, according to IMF data.
Switzerland, home to the pre-FATCA world “Swiss Bank Account”, has 1,040 tonnes of gold, enough to place Switzerland sixth on today’s list. The Swiss People’s Party, earlier in 2014, collected plenty of signatures for a referendum on a proposal to ensure that the nation’s central bank did not sell its gold reserves. The proposal calls on the central bank to hold 20%+ of its reserves in not just gold, but any precious metal.
China has been leading the way in gold demand since the 2008 banking crisis. In 2009, the nation announced that it increased its gold reserves by 454 tonnes.
France is a socialist basket case economically speaking but has recently derided the dollar alongside many other nation-states, and it might feel fairly confident doing so because it holds 2,435.4 tonnes of gold, which is 66.1 percent of its overall reserves.
France has made headlines in recent years with controls on the flow of gold within her borders. In 2013 new legislation banned the sending of “coins and precious metals.” This isn’t uncommon for nations but certainly did catch the eyes of the European gold community.
Rumors are that Italy might sell its gold stockpile to pay off debt, but for now the official government report says it still holds 2,451.8 tonnes of gold, which is 67.2 percent of Italy’s overall reserves.
With debt that’s 132% (official) of her GDP, Italy might need much more gold than that to survive the coming haircut compliments of the European Central Bank (ECB) and global banks.
Germany has been occupied since the end of World War II, and that is why so many of its 3,387.1 tonnes of gold are not stored in Germany. A stupefying 68.7% of German reserves are in gold. The German central bank, the Bundesbank, wants its gold back, as we’ve reported: “With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: 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.”
Unfortunately, for the German government, it doesn’t appear Germany will get its gold back from its occupier (the USSA) any time soon.
1. United States
The US government says holds 8,133.5 tonnes of gold, which is 71.7% of reserves. It hasn’t been independently audited in more than half a century however. Yes, if true, it is unbelievable considering how mainstream media talks about gold. Gold is only ever a topic of discussion in important policy debates when Ron Paul is present. The US has shown over the past nearly 50 years its distaste for gold. As Richard Nixon de-pegged the dollar from gold in 1971, he said:
“In recent weeks, the speculators have been waging an all-out war on the American dollar. The strength of a nation’s currency is based on the strength of that nation’s economy — and the American economy is by far the strongest in the world. Accordingly, I have directed the Secretary of the Treasury to take the action necessary to defend the dollar against the speculators. I have directed Secretary Connally to suspend temporarily the convertibility of the American dollar except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.”
Ron Paul, and others often urge an audit of Ft Knox or the Federal Reserve System. This is laughed off as crazy. But, you see what has happened since the gold window was closed.
And we come full circle in the cycle of money printing and debt. The US dollar is the world’s reserve currency, and though it has been rallying as of late, confidence in the US and the US political system has been shattered. Nation’s are forming alliances beyond the US dollar, and the above-highlighted gold demand is a main symptom of the great changes that lie ahead. But it is not enough.
All of these nations, if they are to survive TEOTMSAWKI, must buy more gold. They simply don’t have enough.