Where have we heard this story before? Venezuela perhaps? Is there a pattern forming?
In 2011 Venezuela repatriated about 140 tons gold from European banks and the Federal Reserve Bank New York.
As the WSJ reported earlier, “The Bank of England recently received a request from the Venezuelan government about transferring the 99 tons of gold Venezuela holds in the bank back to Venezuela, said a person familiar with the matter. A spokesman from the Bank of England declined to comment whether Venezuela had any gold on deposit at the bank.” That’s great, but not really a gamechanger. After all the BOE should have said gold. What could well be a gamechanger is that according to an update from Bloomberg, Venezuela has gold with, you guessed it, JP Morgan, Barclays, and Bank Of Nova Scotia. As most know, JPM is one of the 5 vault banks. The fun begins if Chavez demands physical delivery of more than 10.6 tons of physical because as today’s CME update of metal depository statistics, JPM only has 338,303 ounces of registered gold in storage. Or roughly 10.6 tons. A modest deposit of this size would cause some serious white hair at JPM as the bank scrambles to find the replacement gold, which has already been pledged about 100 times across the various paper markets. Keep an eye on gold in the illiquid after hour market. The overdue scramble for delivery may be about to begin. Source
As soon as Venezuela took possession of their gold, then President Chavez dies suddenly of a heart attack. This was immediately followed by Venezuela’s currency being devalued and the country sent into monetary chaos that has now morphed into hyperinflation. The country has been absolutely devastated due to what has happened to the Venezuelan bolivar, the national currency. We have covered the unfolding nightmare that is Venezuela since 2011 and our latest piece was published on September 15, 2018. Everything changed in Venezuela when they requested the return of their gold. Everything changed – everything. Remember, the Venezuelan bolivar is tied to the Federal Reserve Note, US dollar and the mechanisms that control how this, and a great many other currencies, function and respond/react to other currencies in the world.
Now we see that Turkey’s currency began having problems in April 2018 the same month that Turkey requested 100% of their gold be returned to Turkey from offshore vaults.
This is about as underreported as it gets. A tiny, almost nonsexist report appeared in Trend.az news service on Thursday April 19 announcing that Turkey’s Central Bank had moved 220 tons of gold out of the Federal Reserve System to take possession in Turkey. Trend is also reporting that an additional 95 tons of gold is being moved out of the Federal Reserve and back to Turkey.
Remember, gold is not money and more akin to a barbarous relic that is only held by Central Banks as a tradition. Right. Then why are some central banks repatriating their gold out of the Federal Reserve as Turkey just did?
In an article by Rufiz Hafizoglu and published at Trend.az, a news service located in Azerbaijan, the Turkish government has reportedly taken possession of 220 tons gold that was repatriated from the Federal Reserve. Trend did not specify a government official nor a government agency simply reporting Turkey’s Central Bank has transferred its gold reserves stored in the US Federal Reserve System to Turkey. Turkey’s total gold reserves was the entire 220 tons Turkey reported to have taken possession of on April 19, 2018. The total current value represents approximately $25.3 billion. Source
Throughout 2018 Turkey’s currency has been having problems, but these problems have gone exponential since April. What happened in August 2018 was breath taking and has most of the western world concerned and watching for a monetary firestorm to breakout.
We haven’t seen emerging market currencies crash like this in over a decade, and analysts are warning that if this continues we could witness a devastating global debt crisis. Over the past decade, there has been an insatiable appetite for cheap loans in emerging market economies, and a very substantial percentage of those loans were denominated in U.S. dollars. When emerging market currencies crash relative to the U.S. dollar, lending dries up and servicing the existing loans becomes extremely oppressive, and that is precisely what we are witnessing right now. This week, most of the top headlines in the financial media have been about the crisis in Turkey. The Turkish lira fell another 8 percent against the U.S. dollar on Monday, and it is now down about 35 percent over the past week. Overall, the lira has fallen 82 percent against the U.S. dollar in 2018, and this is putting an enormous amount of stress on the Turkish financial system… Source
I’m not saying that since these nations have requested a return of their gold that someone is making bad things happen to their currency and, in turn, to their economy. What I am saying is that since these nations requested the return of their gold their currencies have taken a nosedive and ruined their countries economies. How it came about no one can say. Sure, lots of people are spilling ink to give their take, however, they, just like myself, do not really know.
What we know just happened to Turkey’s gold is it is back on the market to pay for a bond obligation – very similar to what happened to the Venezuelan bolivar just a few short years ago.
The currency crisis in Turkey dealt a crushing blow to the banks and are forced to get rid of gold, Paraanaliz reported.
The peak of the Turkish financial crisis came in August, when lira rate was sharply falling. The country’s banking sector was under threat, as banks have a sufficiently large amount of external debt and the devaluation of the national currency complicates the servicing of these debts.
Until the end of 2019, Turkish banks must repay bonds for a total of $ 7.6 billion. Thus, since June 15, gold reserves have fallen by almost 20% to 15.5 million ounces, with the bulk of the reduction occurred at a time when the Central Bank of Turkey reduced the requirements for reserves. Source
Our monetary world is so interconnected and mechanisms like SWIFT, High Frequency Trading, computerized trading and proven rigged monetary markets all point in the same direction – all the analyst are guessing they can not pinpoint what actually happened. I am merely pointing out that two countries requested a return of their gold, the two countries received their gold and as soon as the gold touched down on their home soil really bad things began happening to their national currency and both national currencies were tied to the Federal Reserve Note, US dollar and the bond market. Both countries have returned their national gold back to the open market to appease their odious debt owed to the global banking cabal.
