It shouldn’t take a genius to see where this is going. They’re jumping ship before it sinks.
In what could definitely be called a stunning move, the Netherlands has announced it has repatriated in excess of 120 tonnes of gold from the vaults of the Federal Reserve in New York to the Dutch Central Bank in Amsterdam. Officially a move made to rebalance the locations where the gold is being stored, one cannot ignore the fact that the Netherlands only repatriated a large part of the gold which was stored in New York and it did not touch the gold stored in Canada and London.
Additionally, it’s not just ‘some’ gold being brought back home, no, the total amount is 122.47 tonnes or almost 4 million ounces with a market value of $5B. This will reduce the exposure of the Dutch Central Bank to the US financial system as now just 31% of its gold is being stored in the vault of the Fed, coming down from 51%. We have the impression this won’t be the last repatriation as the Dutch Central Bank is keeping its shipping route secret ‘in case more gold needs to be repatriated’.
So what was the main reason why the Netherlands brought the shiny precious metal back home? The central bank wants you to believe it’s just an ordinary decision, but believe it or not, the only reason for this move was to restore the confidence of the public in the Central Bank. By publishing this statement, the Dutch Central Bank basically admits that holding gold increases the public trust in the central bank as an institution, and that’s an statement which should not and cannot be underestimated as it basically means that only physical gold can be trusted and that the gold should be stored inside the country. ‘He who owns the gold makes the rules’ once again seems to be up-and-coming again.
The best place to store your gold is obviously in your own back yard, and it looks like the Netherlands aren’t agreeing with the Germans which also wanted to repatriate most of its gold which was stored in the vaults of the Federal Reserve. However, after bringing just a fraction of its gold back to Berlin, Germany publicly stated it would not repatriate any more gold as it ‘fully trusts the Federal Reserve as an institution’ and ‘the Americans are taking good care of their gold’. That’s obviously a bogus reason as the Fed obviously wasn’t suddenly taking better care of the gold than a year before. It’s also interesting to notice that the Netherlands and Germany used a different approach. Whilst Germany was boasting about its attempt to repatriate the gold, the Netherlands chose the ‘stealth’ way and repatriated it first before announcing it.
Keeping the German repatriation story in mind, the Netherlands are basically giving the Federal Reserve the finger. Unlike Germany, it does not trust the Federal Reserve more than its own central bank and it prefers to ‘sit’ on the gold in Amsterdam rather than store it in a foreign nation. This is a huge policy shift which cannot be underestimated, especially not if you look at all pieces of the puzzle.
This gold repatriation isn’t an isolated case. All signs are pointing in the direction that several central banks are now getting increasingly interested to increase their gold holdings and to have the gold inside the country instead of somewhere else. The Dutch repatriation is the first step, but we expect more pieces of the puzzle to fall into place soon. Very soon.
Full article: The Real Reason Why The Netherlands Repatriated Its Gold (Zero Hedge)