The great gold exodus continues.
Even as the pundits continue to claim gold’s day in the sun is done, countries continue to call their gold home. For February, the Federal Reserve reported that another 13 tons left its vault. That comes after 27 tons exited in January. In all, gold has fled the Fed in two of the last four months (and in the other two months, nothing changed).
And what all of this says is that the central bankers of the world — absent the gold-abhorring Federal Reserve, of course — are worried about the future. You should be, too — because the world is making very clear the fact that you should be buying gold right now.
Earlier this year, I reported on countries such as France, Belgium, Austria, Ecuador, Finland, Switzerland, Venezuela, Romania and Poland that are either talking about repatriating national gold or have already done so. In addition, Turkey recently reported that it exported 13.5 tons of gold bars to the U.K. in January and February, while the Swiss imported $2 billion in Turkish gold during the same time period.
In most cases, they say nothing of their motivation. But in some instances, as with the Dutch, there are overarching concerns that the U.S. and the United Kingdom — where the Dutch keep much of their gold — face a financial crisis … and that in such a crisis the U.S, in particular, might not be so eager to return the gold quickly.
“It is no longer wise,” the Dutch said publicly, “to keep half of our gold in one part of the world.”
In short, all these countries suddenly repatriating gold from American vaults is a physical manifestation of the greatest threat to the world today: a dollar-centric global financial system that has the structural integrity of a sand castle … and the tide’s moving quickly. Better to have your stockpile of gold back on home turf than secreted away inside the very country that will be the eye of the coming storm.
The Dominoes Are Set
I understand the tired arguments insisting that dollar hegemony will remain. But those arguments are blind to the dots that are connecting. I told you Wednesday about China’s efforts to build new iterations of the International Monetary Fund and the World Bank, and how, with the new version of the World Bank, China is attracting scads of U.S. allies.
Those arguments are also blind to the fear that is clear inside U.S. government. Those at the highest levels of government and monetary authority realize that the King Dollar faces serious existential risks with the power to dethrone the greenback, throwing America into disarray, since the lifestyle we have come to know here at home is entirely dependent upon the world’s demand for dollars in global trade.
When that goes away — and I guarantee with 100% assurance that day is coming — a currency crisis like the world has never seen will rip through your life with the ferocity of a lion taking down a gazelle. In fact, if you’re not prepared for that day, you might come to wish you were that gazelle.
This crisis is exactly what central bankers around the world are guarding against in repatriating their gold.
In a dollar crisis, gold is the invisible shield keeping the slings and arrows from killing you. Your dollars will get crushed. Your dollar-based assets will get crushed. Your cost of living will soar since so much of what we buy today is made overseas.
But as the dollar collapses, gold will soar. More important is the great likelihood that to rectify the problem the Federal Reserve will revalue the dollar relative to gold, putting America on a modified gold standard.
To narrow-minded Keynesians who look upon gold as a “barbarous relic,” the idea of any kind of gold standard is laughable and anger-inducing. But the solution to every previous currency crisis has involved gold in some fashion. And even in modern times, nothing is ever really different … and it will be no different this time.
The One Global Insurance Policy
As I routinely write, gold is the only insurance policy that will protect your lifestyle from the fiscal reckonings that are necessary to right the Keynesian-inspired, debt-fueled wrongs that have brought the world to this point.
It’s impossible to know when the reckoning will happen. It’s only possible to know that it will happen. It has to happen. Nothing that any Western central banker, monetary official or politician can do will prevent the reckoning. They can delay … but they cannot avoid.
So take your clue from all those countries recalling their gold. They are preparing for the storm ahead. You must, too, if you hope to protect your lifestyle and your assets.
That’s why I’m telling you: Buy gold now.
Until next time, stay Sovereign…
Jeff D. Opdyke
Editor, Profit Seeker