NY Fed Gold Outflows – Coincidence or Signal?

It would be fair to say the thrust of a lot of what we report deals with the various threats of an economic collapse soon and the need to protect your wealth (and indeed profit) through the world’s oldest and most trusted safe havens, physical gold and silver. The main catalyst for the severity of the coming crash is the unprecedented monetary stimulus program the world’s central banks have undertaken trying to kick start the post GFC global economy, preaching ‘gold is dead, hop on board the free currency train’. The irony is they have also been BIG buyers of gold over that same period. Since the world left the gold standard in the early 70’s, central banks were selling their gold; it was all about credit expansion. Since the GFC (the first major glimpse of the implications of debt fuelled expansion) central banks have been big buyers of gold each and every year. Note below the correlation with the gold price until 2013…



What’s more, recently more of them have been removing their gold holdings from the world’s biggest gold vault, the US Federal Reserve in NY and repatriating it. It doesn’t take a genius to figure out why. The chart below shows very clearly the historic context where there were also major withdrawals immediately prior to the GFC. Coincidence or do they know what’s coming and are getting ready?…. again. Also at what point will the price suppressing paper shorting on COMEX fail and the price correlation pictured above resume?

 

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I see Ted Koppel has written a new book on this sort of thing. Every time I have posted something like this, all I get is negative feedback. Several of my well informed friends are stacking silver, gold and MRE's and advising me to do the same. Something is in the wind and it does not smell good. Good luck on this post my friend and expect some to call you a doomsayer. I won't be one of them though.

 

I wonder how many of those MRE's are left over from Y2k?

Stacking gold and silver is always a good part of a retirement strategy.

This is a first world country. We'll see another financial crisis surely, possibly even worse than the last - especially as we keep selling more and more of our future down the road in financed debt. I don't see a zombie apocalypse in our future.

Gold and silver have value world-wide. Even if we do see chaos, there's some place where it's valuable - if you can get there.

Personally, I'm just looking at reality and being able to have my money work for me after the age of 55 so I have the option to retire. After that whatever I make is windfall.

At some point, debt comes due and if you don't have a plan to pay for it - you will take it in the shorts having to sell at a loss.

 

Very good post! I really appreciate it. The graphs are easy to decipher and definitely something worth taking in. Thank you!

 

Central banks still hold gold to settle their debts as they have for a very long time. It's tradition after all according to Bernanke. Of course since they need gold I would never expect them to create competition in the marketplace by advocating that people buy it.

I'm not entirely convinced that the correlation between central bank buying and the gold price is exclusive to its input parameters. These could both be effects of something else, causally related but not co-dependent potentially, and since the chart only goes back to 2005 it's hard to tell if the correlation is due to cherry picking the timeframe or not. I think looking from the start of the bull market would be a more reliable indicator.

Regardless, they are buying gold for a reason, because currencies come and go, but gold is eternal.

 

My take on the coming collapse:

I was a PM hoarder but no longer. If the world economy takes a serious down turn things will be very different from depressions in the past or even worse if economies collapse all together. initially, PM will be marketable as life becomes more difficult ammunition, clothing, food, etc will become the marketable commodities of choice, IMO.

 

Another depressing read.
http://www.cnsnews.com/news/article...l-security-administration-spending-hit-record

 

What happened in 2008 to cause the big bump?

 

2008-Enron!

 

Enron went defunct in 2004 if I'm not mistaken, and it didn't lead to a huge spending increase in Social Security.