Don't listen to their words, watch what they do. Gold is Important

It's been reported on Zerohedge today and on other news sites that the EU and the rest of the Western central banking world has moved to prevent the Iranian Central Bank from being able to buy and sell Gold. It's a curious move against a central bank when we have been told, officially, that gold is not money. Unofficially we are told that gold is "just a commodity" (some here believe this), gold is a relic of the past, modern society has no use for it. Yet here are the governments of the west moving to prevent gold sales/trades by the central bank of a sovereign country as an official sanction against that country.

I won't get into the ramifications of this move except to state that it's a validation of the fact that central banks do indeed value gold and that it serves as the ultimate hedge against currency debasement and currency wars. It's also an indication, IMO, that gold supplies are tight and getting tighter. Take from this what you like, but my advice is never listen to their words, watch what they do, then do the same.


(now you know why Hugo Chavez got his gold out of London) Get yours while you can.

 

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Im no gold person, I never have and currently dont buy it...(I am a poor college student after all lol) I will however say that looking at gold from a historical standpoint it is a form of currency. Even though in todays market gold is not officially considered a currency it has been in the past going all the way back to the egyptians......for every single country in the world who prints paper money, its value is only related to the trust we put in it. Gold however is a raw resource and as such will always be valued in some way no matter how much economies improve or degrade. Again, gold is a raw resource like spices and tobacco and every other commodity that was used for trade and the like before paper money became the standard. So again looking at it from a historical perspective, Gold will always hold some sort of monetary value reguardless of outside influence where as paper money is based on a form trust.

 

And moved it all to New York apparently, at least from the last article I read about where the world's gold is being held.

 

He moved his physical gold to the central bank building vaults in Venezuela. This has been verified by numerous sources.

I would not be surprised however that there might be Iranian gold in NY. Jimmy Carter froze all Iranian financial assets in the USA in 1979. I might be wrong but I don't think these assets were ever unfrozen. (or at least all of it)

 

Well when it's been officially announced that India has agreed to pay Iran in gold for oil, and I'm sure the Chinese and Russians could follow suit what's America to due to try and keep the world stuck on the 'petro dollar'.

 

You got links to those sources, last article I read which was just a few months ago mentioned all of his gold was still in NY. I'm trying to dig it up now, would be nice to see newer reports though to confirm.

 

http://www.bbc.co.uk/news/world-latin-america-15900885 this is from the BBC awhile ago about the first shipment arriving.

 

Hmm, maybe I remember wrong and it was London instead of NY. But I did find an article from August talking about the dilemma of how he was going to transport 12 billion worth in gold.

http://blogs.reuters.com/felix-salmon/2011/08/23/how-to-get-12-billion-of-gold-to-venezuela/

 

I completely agree with you Fatima. This action highlights just how important gold is for central banking, and it has little to do with 'tradition'.

Only gold and silver are money according to the US Constitution. I think what Bernanke meant to say was that gold is not official government currency. We don't have any government backed money that functions as currency. The closest thing are ASE's and AGE's, but they're not used as currency. People assume that currency is money, because it has been falsely reinforced as such, but that doesn't make it true. None of us have ever earned money from an employer since 1964, except potentially under the table.

 

The central bankers don't let the peons use gold and silver for currency. A litany of legal tender laws legislated into existence have seen to that. However the central bankers must perform currency transactions with each other. They all know the worth of the confetti they produce so they use other currency, including gold. These transactions are not subject to public review as they are protected under the Fed's secret "monetary operations" but occasionally they tip their hand as they have done with the Iranian central bank.

Generally there is honor amongst thieves so when they make these transactions between themselves, there is no physical movement of actual gold. Instead they make ledger changes of allocated gold held in numerous large vaults around the world. These include London, France, NY, Tokyo. Interestingly most of Germany's gold is held in NY. The story was that it was put there to protect it from the Soviets lest they take the gold upon successfully invading W. Germany during the cold war, and it was never returned.

The action against Iran is particularly interesting because I would assume the central bankers didn't want to do it. It highlights exactly why the "honor" system doesn't work and why Chavez got his gold out of London. As bad as this makes things sound, such as war is coming, it's nothing but good for gold holders.

 

I believe that your conclusion is a far leap. Yes, according to the BBC quotes, precious metals are being sanctioned on Iran, not just gold, but any other also. I believe the inclusion was basically to include Iran's major commodities going in or out. Oil of course is the largest export of Iran, with grain being a major one last year, with textiles close behind. Major imports besides Nuclear processing centrifuges and uranium ( for power plants of course ). If the European central banks sanction precious metals, the Iranian currency will probably fall more, as they can't demand payments due in precious metals, and will have to accept paper ( or most likely for humane reasons, food commodities. Yes, there are ways around this and China and others may play a major role, but to equate such political actions to an assumption that it validates a place for gold or any precious metal as "money" is farfetched in my opinion.

Jim

 

Using Iran and Chavez as examples isn't much of a positive advocacy for gold. It tells me , in those two cases, that they saw their currencies spiraling toward extinction due to sanctions caused by their actions as governments, not by a collapse of global currencies. They wanted to hoard gold as leverage against sanctions, nothing more. Chavez, I believe, was using it in international black market deals, but who could know.

I've said it before, but I'll repeat it again, if gold were as valued as some think, there wouldn't be any left for anyone here to buy. The major governments and a few banks would own it all, ending any market for it. The fact that anybody can buy it anywhere at any time says a lot about how little it's valued by those control finance and world monetary systems.
Guy

 

But Central Bankers only hold gold, so they had to agree to these restrictions. It's remarkable they would participate in this move. I'll note they are already making other exceptions to this embargo. For example, it sounds as if the British government has lobbied the congress to exempt BP's oil development interests in Iran.

 

dup

 

If you read my commentary above, then it would have made better sense for them to leave the gold in London where it can be used for settlements, if they trust the system. This is their gold, so they wouldn't be hoarding anything. What changed is the physical location. It can no longer be seized.

 

from Wikipedia, Iran hostage crisis:

"The hostages were released on the day President Carter's term ended. While Carter had an "obsession" with finishing the matter before stepping down, the hostage-takers are thought to have wanted the release delayed as punishment for his perceived support for the Shah.

Iranians insisted on payment in gold rather than US dollars so the U.S. government transferred 50 tonnes of gold to Iran while simultaneously taking ownership of an equivalent quantity of Iranian gold that had been frozen at the New York Federal Reserve Bank."

 

De-linking major commodities from the dollar is the major point in all this. Especially if the Chinese, as rumored, follow suit. Whether they pay for it in yen, rupees or gold, gold will go up because the importance of the dollar goes down. Paying directly in gold will certainly raise the demand for gold.

 

I have to wonder if some of the actions by other nations aren't for the sole purpose of deflating global currencies like the dollar, euro and yen. It would seem counter-productive, as gold isn't valued on it's own merit, but with currency. If those same currencies become worth nothing, what do we base the value of gold on? Chicken? Wheat? Cotton? If that becomes the case, material commodities become the next gold and gold becomes today's declining currencies.
Guy

 

^No that won't happen. Chickens, Wheat, Cotton, etc all fail the basic tests for currency.

 

I didn't say they'd be currencies as we think of them. I asked if gold would be valued based on them. If the dollar went the way of the dodo bird, what would we base the value of gold on? It would no longer be X amount of $'s per oz, but it would have to be something. Say, for example, an oz of gold would be worth 75 chickens. It's never happened, but to say it couldn't is to be blind to a changing world.
Guy