Here’s a piece of underreported news that will have a major impact on gold investors.
Over the last few weeks, Turkey had repatriated a total of 220 tons of gold from the US Federal Reserve back into Turkey.
Trend.az, an Azerbaijan news service, reported that the Turkish government repatriated 220 tons (worth $25.3 Billion) from the Fed. In the same report, Trend cited an additional 95 tons of gold repatriated, though whether this is in addition to or part of the 220 is not clear.
Russia’s Sputnik News released a similar report, but with slightly different figures and sources:
Local media cited government sources as saying that the Central Bank of the Republic of Turkey (CBRT) has transferred its gold reserves from the US Federal Reserve System to Ankara. In March 2018, the CBRT’s gold reserves were worth 25.3 billion dollars; 220 tons of Turkish gold was stored in the US, according to the sources. The largest private Turkish banks also withdrew their gold reserves from abroad, responding to President Recep Tayyip Erdogan’s call “to get rid of exchange rate’s pressure and to use gold against the dollar.” In particular, the Halk Bankasi bank transferred 29 tons of gold to Turkey, according to the Turkish newspaper Milliyet. Source
Sadly, this news went under-reported because most people in the US don’t look at gold as money. Gold is far from being a hot topic.
But here’s the important question: Why is Turkey repatriating their gold from the Fed?
The answer to this question lay in the under-reported history of gold repatriation from the US.
- Venezuela retrieved its gold from US vaults in 2012.
- The Netherlands did the same in 2014, repatriating 122 tonnes.
- Germany brought back 300 metric tonnes in 2017.
- Austria and Belgium are looking to do the same.
The Fed supposedly has 261 million ounces stored in Fort Knox and other vaults. But here’s the thing: no “independent” third party has ever audited the Fed.
In other words, we can’t even be certain as to how much gold the Fed actually has; or if it has any stored in its vaults!
But let’s get back to the main point: gold repatriation from the US Fed is part of a larger trend.
The US dollar’s reserve currency status is under fire and is about to face stiff competition.
Meanwhile, China and Russia are importing gold at record levels in order to create a gold-back currency system.
For instance, the Chinese Yuan is proving to be favorable among China’s trading partners.
Russia, Turkey, and Iran are considering making payments in their own (or other) currencies.
China and Russia have an agreement to avoid settlements in US dollars.
In light of the tariffs introduced by the US, there looms the possibility of an international currency war.
Investors are looking for other safe haven options besides the dollar.
After all, why invest in the dollar if it’s not backed by gold but by trust in the American economy and worker?
Without gold backing, and with little trust in the US, why should foreign nations trust the US Dollar?
Many countries may not have much trust in the US Dollar.
Many countries may not even trust the currencies of their neighboring countries or trading partners.
But it seems that almost ALL countries have trust in gold.
All except for the US.
So if you are an America holding gold, you are clearly in the minority…the smart minority.