By Bill Holter
To say that events are now taking place at the speed of light is an understatement. It was just last Monday, I wrote a missive entitled “The Mother of all Bank Runs”. In it I wrote about the German and Dutch repatriations of gold which was then followed by the Belgians beginning discussions on the same topic. As a final speculation, I mentioned that “logically the Austrians would be next”. There was no way you could have told me it would be less than one week until the same news would actually come out of Austria! Unlike the Germans, Dutch and Belgians who have gold held in N.Y., Paris, and London, Austria holds 80% of their 280 tons of gold concentrated in London. http://www.zerohedge.com/news/2014-12-12/breaking-austria-considers-repatriating-its-physical-gold This is truly big news for several reasons which we will explore and it certainly brings up a few more questions.
First, “why”? Why is there all of a sudden this rush by Holland, Belgium and Austria to follow Germany’s lead in asking for their gold back. The obvious answer is trust, or better said, lack of trust. For years there have been questions as to whether or not “official gold” has been leased into the markets. These questions have arisen because of the simple math of supply and demand. If China, India and Russia have been gobbling up 100% of current mine supply… then where is the supply coming from to meet the demand from the rest of the world? If there was no trust issue whatsoever, these central banks would not “bother” with where this gold is being held because it brings up questions central banks would prefer you not think about. These questions would obviously include “why” move the gold if it is already “safe”? It also brings up the question of why bother if gold is really not important in today’s financial world …as many central banks will have you believe?