Why Are Central Banks Buying Gold?

Anyone who wants to get to the truth behind the inflationary threats to their wealth should ignore everything the Central Banks say about inflation and look instead at their actions.

Worldwide gold demand in 2012 was another record high of $236.4 billion in the World Gold Council’s latest report. This was up 6% in value terms in the fourth quarter to $66.2 billion, the highest fourth quarter on record. Global gold demand in the fourth quarter of 2012 was up 4% to 1,195.9 tonnes.

Central bank buying for 2012 rose by 17% over 2011 to some 534.6 tonnes. As far as central bank gold buying, this was the highest level since 1964. Central bank purchases stood at 145 tonnes in the fourth quarter. That is up 9% from the fourth quarter of 2011, and the eighth consecutive quarter in which central banks were net purchasers of gol

http://247wallst.com/2013/02/14/central-banks-buy-the-most-gold-since-1964/#ixzz2LMLOfBPK

Note… Central Banks, while talking down money printing and denying the presence of inflation, bought more Gold in 2012 that any year dating back to 1964. Indeed, However, since becoming net buyers of Gold in 2010, the Central Banks have been increasing their Gold purchases rapidly.

In 2010, Governments worldwide bought 77 tonnes of Gold. In 2011 it was 457 tonnes. And last year it was a whopping 535 tonnes. All told, they’ve accumulated  1,000 tonnes of Gold since 2Q09. At today’s price of $1600 per ounce, this stash is valued at over $56 billion.

The key issue here is not the amount ($56 billion in Gold purchases is nothing compared to the over $10 trillion in new money Central banks have printed since 2007), but the trend: Central Banks were net sellers of Gold for decades until 2010.

Other major investors are looking to get their hands on Gold… not the promise of Gold, but the actual metal.

Germany has the second largest Gold reserves in the world behind the US. Since the early ’80s, it has stored the majority of these reserves with the NY Fed (45% vs. 13% in London, 11% in Paris and the remaining 31% in Frankfurt).

With that in mind, everyone needs to be aware that last Monday Germany’s Bundesbank announced it will be moving a major portion of its reserves from the US and all of its reserves from France back to Frankfurt.

Nearly half of Germany’s gold reserves are held in a vault at the Federal Reserve Bank of New York — billions of dollars worth of postwar geopolitical history squirreled away for safe keeping below the streets of Lower Manhattan.

Now the German central bank wants to make a big withdrawal — 300 tons in all.

On Wednesday, the Bundesbank said that it would begin moving some of the reserves, the second-largest stock in the world after that of the United States. The goal is to house more than 50 percent of German gold in Bundesbank vaults in Frankfurt by 2020, up from a little less than a third today, the bank said…

The new policy will include the complete withdrawal of 374 tons of German gold stored at the Banque de France in Paris, about 11 percent of the total. Bundesbank officials were quick to note that the decision was not a reflection of French trustworthiness. Rather, because France and Germany now share the euro, there is no need for reserves as insurance against currency crises.

 

http://www.nytimes.com/2013/01/17/business/global/german-central-bank-to-repatriate-gold-reserves.html

This announcement came with the usual political statements that the decision had nothing to do with a lack of trust between the Bundesbank and the US Fed or Bank of France, but the message is obvious: Germany sees the writing on the wall and is moving to secure its Gold reserves.

The same goes for Texas:

Texas Republican State Representative Giovanni Capriglione authored the bill demanding state owned gold bars be returned to the Lone Star State. The legislation to pull $1 billion in gold reserves from a Federal Reserve vault in New York is supported by Governor Rick Perry.

The financial crisis in Cyprus which prompted a run on the bank and ultimately a closure of the financial institutions reportedly bolstered support for the Texas gold bar return bill. State Representative Capriglione had this to say about why he penned the bill:

“For us to have our own gold, a lot of the runs on the bank and those types of things, they happen because people are worried that there’s nothing there to back it up.”

Governor Perry stated that if Texas owns the gold, then no one else should be able to determine if the state can reclaim possession of the bars of precious metal. Representative Capriglione also noted that Texas is not interested in implementing its own gold standard. According to the Republican’s statements about the gold bars bill, he simply wants to bolster the state’s fiscally secure reputation. The Texas public servant also feels that such a solid financial persona would be beneficial in case an international of national fiscal crisis occurred.

The legislation notes the state does not merely want gold certificates from the Federal Reserve, they want the actual gold bars to store inside a planned Texas Bullion Depository. Moving $1 billion in gold bars from New York to Texas would be a huge task, one some are calling impractical. State Representative Capriglione suggested selling the gold currently housed inside the New York vault and then repurchasing the same amount in Texas.

http://www.inquisitr.com/600185/texas-wants-gold-stored-at-federal-reserve-returned-to-lone-star-state/#XHeg60ztpexhAROW.99

Investors forget that the single most important role played by Central Banks is to maintain confidence in the system. For that reason they will NEVER admit inflation is a problem. But if inflation isn’t a problem, WHY ARE CENTRAL BANKS LOADING UP ON GOLD?

Watch what they do, not what they say.

 

 

To learn more about Private Wealth Advisory…

 

Best Regards,

Graham Summers
Read more at http://investmentwatchblog.com/why-are-central-banks-buying-gold/#AD11VJB1LRmRodrl.99

DIMON ADMITS: Breaking The Law ‘Is A Problem At JP Morgan

 

Following the rules is not easy for Jamie.

Dimon warns more sanctions are coming for JPMorgan.

Jamie Dimon warns that JPMorgan, which is under regulatory orders to tighten internal controls, will face more sanctions in the coming months.  Dimon comments on the London Whale, criminal investigations into activities at the bank, illegal foreclosures, money laundering and the threat of cyber attack.

 

Here’s why Jamie is warning shareholders:

NYT: JPMorgan Faces Multiple Criminal Investigations

 

 

http://dailybail.com/home/dimon-admits-breaking-the-law-is-a-problem-at-jpm.html

Rockefeller impostor convicted of murder

PictureA notorious Rockefeller impostor has been found guilty of first-degree murder in the death of a man whose bones were found buried beneath a California home.

Christian Gerhartsreiter was tried 28 years after the disappearance of newlyweds John and Linda Sohus in a heavily circumstantial cold case. Much of the prosecution’s evidence focused on the strange behavior of the man who adopted many names including Clark Rockefeller. He masqueraded as an heir to the fabled oil fortune for 20 years.

The verdict was reached Wednesday after the jury deliberated about a day.

Authorities said Gerhartsreiter was a German immigrant who lived another life long ago, occupying a guest cottage at the home of Sohus’ mother in the ritzy suburb of San Marino. He was known then as Chris Chichester and intimated he was of royal lineage. He joined the church, befriended residents and told some he was a film student.

A friend said Linda Sohus once described the tenant in the cottage owned by John’s mother as “creepy” and said she and her husband never spoke to him.

The town folk didn’t connect him with the disappearance of the Sohus couple in 1985, but shortly after they vanished, so did he.

No trace of Linda has been found but John’s bones were unearthed during excavation of a swimming pool at the San Marino property in 1994. With no clues, the mystery went cold again.

But across the country, a man variously known as Chris Crowe, Chip Smith and Clark Rockefeller was inventing new lives for himself.

This impostor wormed his way into high society and talked his way into important jobs. He married a wealthy woman and controlled her funds, but his identity unraveled when he kidnapped their daughter during a custody dispute. She testified that he became increasingly paranoid when police begin inquiring about him.

When he was unmasked, he became the subject of magazine articles, true crime books and TV movies that sought to explore his bizarre story and get to the heart of the man behind the pseudonyms.

The resulting publicity led California authorities to revisit the Sohus disappearance. They realized the man in custody in Boston was not an heir to the Rockefeller fortune but was the man who had lived in San Marino decades ago.

Already serving time for the kidnapping of his young daughter in a Boston custody dispute, Gerhartsreiter was close to the end of his sentence and headed for freedom when the murder charge changed that. After a quarter century, authorities believed they had linked him to the disappearance of his old neighbor, Sohus.

Defense attorneys suggested that Linda Sohus, not their client, killed her husband. But no motive was offered for her or Gerhartsreiter to have killed the young man.

Prosecutors filled in the blanks of the defendant’s whereabouts during the decades of his disappearance. But some details were unlikely ever to be explained.

He chose not to testify in his own defense and much of the trial testimony came from people now hobbled by age who knew him in San Marino as Chris Chichester, a stranger with a murky past.

 

http://www.telegram.com/article/20130410/NEWS/130419949/1116

US banks shaken by biggest deposit withdrawals since 9/11

(RT) US Federal Reserve is reporting a major deposit withdrawal from the nation’s bank accounts. The financial system hasn’t seen such a massive fund outflow since 9/11 attacks.

Joe Raedle / Getty Images / AFP The first week of January 2013 has seen $114 billion withdrawn from 25 of the US’ biggest banks, pushing deposits down to $5.37 trillion, according to the US Fed. Financial analysts suggest it could be down to the Transaction Account Guarantee insurance program coming to an end on December 31 last year and clients moving their money that is no longer insured by the government.

The program was introduced in the wake of the 2008 crisis in order to support the banking system. It provided insurance for around $1.5 trillion in non-interest-bearing accounts with a limit of $250,000. It was aimed at medium and small banks as the creators of the program believed bigger banks would cope with the crisis themselves.

So the current “fast pace” of withdrawal comes as a surprise to financial analysts because the deposits are slipping away from those banks which supposedly were safe. Experts expected savers in small and medium banks would turn to bigger players come December 31.

There are a number of reasons behind this unpredicted fund outflow. Some experts believe it has to do with the beginning of the year when the money is randomly needed here and there. Others have concluded the funds are getting down to business and being invested.

Another set of data from the US Federal Reserve shows some deposits may have moved within the banking system from one type of account to another.

ROBBING MALI TO PAY GERMANY

(WRH) That all wars are ultimately bankers’ wars doesn’t get more obvious than this.

Our story starts with the fact that many nations have deposited gold bullion at the New York Federal Reserve. That gold vault was a centerpiece for the Bruce Willis film, “Die Hard With a Vengeance.”

 

The idea is that while you and I are required to transact business with piece of paper and ink, large banks and nations still settle their accounts with gold, which is simply wheeled from one nation’s vault to another to settle a debt, all of it under the roof of the Federal Reserve Gold Depository in New York City, or the similar institutions at the Bank of England and Band of France.

Then, in 2009, a worker at a German gold bullion trader grew suspicious of a gold bar that had come in, and decided to assay the gold content. But the drill bit broke, revealing that the core of the gold car was filled with tungsten, a metal almost the exact same density as gold. The bar was cut open, and the scandal reported on German TV.

Alerted, other gold centers began to scrutinize their gold bars and more fakes quickly surfaced, including China, and the Manhattan jewelry district.

 

 

It quickly became apparent that the problem of tungsten filled bullion bars was widespread. Because many of the fake gold bars had the marking of US sources, nations began to ask for audits and tests of the gold bullion held in their name by the New York Federal Reserve. To the surprise of many, the New York Federal Reserve refused! Indeed the New York Federal Reserve refused the German government permission to simply look at their bullion! Germany’s private central bank then went public assuring the Germans that they trusted America’s private central bank and did not need to see the gold. That was followed by a bizarre editorial from CNBC’s Senior Editor Jim Carney that it didn’t really matter if the bullion was really there at the New York federal Reserve, as long as the bookkeeping said it was!

That set off everyone’s alarm bells!

The German government started demanding their physical gold to be repatriated back to Germany from both the Bank of France and the New York Federal Reserve. Germany demanded all of the 374 tons of gold held by the Bank of France, but only 300 tons of the 1500 tons of bullion held by the New York Federal Reserve. Both the Bank of France and the New York Federal Reserve have stated that the process of returning the gold will take years, five years for the French gold, and seven for the gold coming from the New York Federal Reserve. The delay makes the situation clear. Neither the Bank of France nor the New York Federal Reserve actually have the gold Germany deposited, sending tungsten fakes back to the very nation that first spotted the fraud is risky, the France and the United States are scrambling to find replacement gold.

So where did the gold go? Certainly some of it was dumped onto the market to keep gold prices low, to discourage investors from pulling their money out of the banks and equities markets and switching to gold. But most of it was likely leased out to settle over-sold gold futures contracts to keep the US commodites market from imploding, and now they cannot get it back.

Which brings us to Mali.

Mali is one of the world’s largest gold producers. Together with neighboring Ghana they account for 7-8% of world gold output. That makes them a rich prize for nations desperate for real physical gold. So, even as Germany started demanding their gold back from the Bank of France and the New York Federal Reserve, France (aided by the US) decided to invade Mali to fight “Islamists” working for “Al Qaeda.” Of course, “Islamists” has become the catch-all label for people that need to ne killed to get them out of the way of the path to riches, and the people being bombed by France (aided by the US) are not “Al Qaeda” but Tawariqs, who have been fighting for their independence for 150 years, long before the CIA created “Al Qaeda”. Left to themselves, the Tawariqs could sell gold to whoever they want for whatever they want, and right now China can outbid the US and France.

So off to war your children must go, to spill their blood for the money-junkies’ gold.

UPDATE: Switzerland has announced their intention to repatriate all of their gold held by the New York Federal Reserve and other central banks. That means the gold mines of Mali may not be enough to cover the shortfall. Nearby Ghana is also a major gold producer. Together with Mali, they account for 7% of world gold production. But even that may not be enough, and I am concerned that the US Government may order US citizens to turn in their gold to save the banking system, as Roosevelt did back in 1933.