Countries are increasingly using gold for trade rather than dollars, euros or any other currency. Both India and China has recently been trading gold to Iran for oil and various moves away from the old system of trade have been observed world-wide.
Aside from the collapsing value of the dollar and Euro on reason countries are heading into gold is to avoid sanctions by the U.S. and Europe and have money on hand to by arms and supplies for military actions that the West might try to stop. India and China using gold for oil is also a stealth attack on the dollar, increasing both the value of gold and the pressure on the dollar.
Twelve other countries are noticeably increasing gold reserves in a move that is clearly a preparation for eventual global financial turmoil. From Mineweb.com:
According to the latest IMF statistics at least 12 countries are known to have increased their gold reserves in March indicating the continuation of a trend now going back more than two years, and one which has been on its own a substantial supporter of the higher gold prices seen over the period. Overall Central Banks appear to have purchased no less than 58 tonnes in the month, which could suggest an acceleration in their increases in holdings if buying at this rate continues throughout the year.
While the majority of these countries only raised their reserves by a very small amount, there were indeed some quite significant purchases – notably from Mexico, which increased its holdings by 16.81 tonnes to a total of 122.58 tonnes; Russia with purchases of 16.55 tonnes giving it total reserves now of 895.75 tonnes; Turkey with 11.48 tonnes taking it to 209.6 tonnes in its reserves. Argentina bought 7 tonnes taking its holdings to 61.74 tonnes, Kazakhstan with 4.3 tonnes – up to 96.16 tonnes and Ukraine with 1.18 tonnes bringing its holding to 29.21 tonnes. A further half dozen countries raised their holdings by increments of less than a tonne.
This, of course, only shows the figures for those nations which are, one assumes, wholly transparent in reporting their gold holdings. There have been some quite sharp ‘upwards adjustments’ in the past from some countries which have been less open in their reporting – notably China which is assumed by most observers to be building its gold reserves strongly over the three years since it last announced an upgrade in its holdings.
The continuing upwards trend in Central Bank purchasing is yet another indicator of unease in the sector about the prospects for those currencies – notably the dollar, the euro, the pound sterling and the Japanese yen – which provide the bulk of their monetary reserves.
European Parliament member Nigel Farage has just warned that the politicians there know Europe will collapse but are unable to figure out a way to tell the public:
There are going to be some serious banking collapses and the impact of that on some sovereign states, will be serious. I’m afraid we’ve gotten to a point where we really can’t stop this now. We’re beginning to reach a stage where however much false money you create, the problem becomes bigger than the people trying to solve it. We are very close to that point.
When I talk about the threats and the risk that this thing could wind up in some kind of rebellion, some sort of awful social cataclysm, they (other European politicians) are now very worried indeed. They will talk to you in private, but in public, nobody dares utter a word.
I think the deterioration, in the last two or three weeks, in the eurozone is very serious indeed. It’s the bond spreads in Italy and Spain. It’s the fact that youth unemployment is now over 50% in some of these Mediterranean countries.
It’s riot and disorder on the streets. And yet a month ago I was here and there was Herman Van Rumpuy telling us, ‘We’ve turned the corner. Everything is solved. There are no more problems with the eurozone.’ What a pack of jokers they look like.”
So hoarding gold or other commodities is a good idea for any country and especially any citizen who realizes the government can’t take care of them.
