On the heels of the announcement by the Dutch that they have repatriated 122 tons of physical gold from the U.S. Fed, today it appears that entities owning paper gold are now getting very nervous. So it seems that the Dutch aren’t the only ones who are concerned about the paper gold Ponzi schemes being run by the Federal Reserve and the Bank of England, and it looks like there may be more entities asking for their gold.
Eric King: “We had the news about the Dutch Bank bringing home 122 tons of their gold. Incredibly Egon von Greyerz telegraphed this nearly a month ago. He put out another piece with King World News today and his message was that for these countries looking to repatriate gold from the U.S. Fed, the gold is not there — the gold is gone.”
Turk: “Yes. That was the message that we learned from Germany and the fact that it’s taking so long for Germany to get its gold back from the United States….
Continue reading the James Turk interview below…
Eric King: “James, as you know the Germans simply asked to be let into the vault at the Fed just to inspect their gold, and they were told, ‘No.’ They were denied access. Of course the reason given was that they represented a ‘security risk.’ That’s preposterous.”
Turk: “Absolutely. That is a completely bogus excuse. If the gold is there you should be able to go down and see it. In fact, I’ve been in the vault of the New York Federal Reserve, so I don’t really see how there is any kind of ‘security risk’ associated with it.
But this is not the first time the German gold is missing. No too long ago Hjalmar Schacht, who was the Governor of the Reichsbank back in the 1920s, was visiting New York and he went to see the (German) gold in the New York vault. And when he went down in vault with the Governor of the Federal Reserve at that time, whose name was Strong, the clerks at the vault said, ‘We can’t find the German gold.’
So it’s not just been missing for a few decades, it’s been missing for (almost) 100 years. So one really has to question what’s really going on at the New York Fed. I really doubt whether all of that gold that’s supposed to be there is there. I think a lot of it has (already) been put into play (sold into the market).
The bullion banks for a long, long time, going back to the formation of the Bank of England, they’ve been running a fractional reserve gold system. They make promises that the gold is there but the gold has already been sold into the market. It’s been loaned, it’s been sold, it’s been swapped with other countries, and as a consequence there is a shortage of physical metal and we are seeing that today in London.
And as central banks begin to worry about whether their gold is really properly accounted for or not, you are probably going to see more countries asking for their metal back. And the fact that it’s taking Germany so long to get its metal back, other countries have their gold stored at the New York Fed, the Bank of England, or wherever, so it would seem that they are going to be asking for their gold back too. So I think this is a significant development.”
Eric King: “What happens to the gold market at that point? It creates an enormous short squeeze or at least the need (for the Fed and the Bank of England) to go and procure the gold for these countries in the open market.”
Turk: “You are absolutely right. We could say it’s going to be a short squeeze, or we could say it’s going to be a default (by the Fed and the Bank of England), where the governments say, ‘Look, we don’t have the gold, and therefore we are just going to give you dollars (or pounds) instead.’ But that’s not going to help the poor countries that think they have the gold and it’s not actually being safely stored.
We are in a situation that is not too different than what happened in the late 1960s. Back then we could actually see the gold moving out of central bank vaults because it was accurately reported (as the gold left the vaults). Today we really don’t see those gold movements because central banks aren’t reporting it to the extent that they did in the 1960s. And central bank balance sheets don’t show how much gold they have in the vault and how much they have out on loan.
But we’re starting to sense, Eric, and we are seeing it in terms of the tightness in the metal market here in London, that people are getting nervous about physical gold. And the people (or entities) who own paper gold are getting nervous about not being able to convert their paper gold into physical gold, and that’s (already) resulting in a very tight physical market.
Gold’s main purpose today as far as any country is concerned is if a currency collapses in that country because of too much government debt, mismanagement by the central bank or whatever, they are going to need that gold in order to rebuild the currency system. In fact, there was an important announcement by the Dutch Finance Minister who said, ‘After 2008, the Dutch central bank actually looked at reestablishing the guilder if the euro collapsed — if they couldn’t keep the euro together.
And you’ve got to believe that all of the European countries have these contingency plans. And the key element of any contingency plan is getting control of the gold that you own. That means bringing it back to a safe place where you know the gold really exists and that means putting it back in the vaults of the central bank of the country that owns that gold.
So the fact that the Dutch are doing this announcement today is very bullish. But I think, Eric, you are going to see (even) more countries looking to get their gold back.” The KWN audio interview with Egon von Greyerz, James Turk and Luzi Stamm (architect of Swiss Gold Initiative) discussing the stunning ramifications of the Dutch gold repatriation and much more is available now and you can listen to it by CLICKING HERE.
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IMPORTANT – KWN has many more interviews being released today.
The audio interviews with Ben Davies, Greyerz-Turk-Stamm, Gerald Celente, David Stockman, William Kaye, Dr. Paul Craig Roberts, Andrew Maguire, Eric Sprott, Bill Fleckenstein, Rick Santelli, Michael Pento, John Mauldin and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf — to listen CLICK HERE.