WHY ARE CENTRAL BANKS BUYING GOLD
A journey into the possible and the weird
enjoy
Let me "set the stage" first. There is an estimated 5.8 billion ounces of Gold above ground. Those are not Troy ounces so multiply by 28 and divide by 31 not that it matters much. Even at say $1100 per troy ounce we are talking about 5.2 billion troy ounces times $1100 or 5.7 Trillion dollars. This obviously isn't enough to cover a country like America's debts and who would they sell it too anyway? Even if during a Greater Depression Americans were some how generating only 2 Trillion or less in tax revenue and deficits went to say 2 trillion this would cover America for 3 years. The rest of the world be damned of course. j/k
Of course you adjust all these numbers higher based on what the SHTF rate might be.
Now you spread that Gold out around the world. America supposedly has 8100 tonnes with the next country being Germany. And a small side note here America is holding a large part of the Gold for the rest of the world and the odds they would get it back when the SHTF is pretty slim since they can't even get it back right now. But I digress.
So lets do that calculation. 2,200 pounds per tonne times 16 ounces times 28 divide by 31 to convert to Troy ounces times 8100 times 1100 equals roughly 280 billion. Big whoopty Doo. That wont pay the interest on our National Debt for half a year. Actually instead of doing long calculations like this you can multiply a "regular ounce" by a factor of .911 to convert to troy ounces when doing rough estimates. All you numerology trolls just got excited with .911 being the conversion factor didn't you?
So Gold isn't going to help most governments but it will help the owners of the banks. Not the depositors. They are screwed.
There are lots of factors to consider of course. If your Gold is worth $11,000 an ounce US when a US Dollar is worth 10 cents and you bought at $1100 then you do okay. Break even in buying power. There are other considerations even when figuring this out. Buying Power is shifty. If hyperinflation kicks in a loaf of bread might cost $10 and most likely people now making $10 an hour won't see their pay rise by the same factor. On the other hand lets say that if you had an index based on bread, which at my local store at its cheapest is sometimes $1.00 a loaf and If I had $2.00 I could buy two loaves of bread or a gallon of gas which is about $1.80 right now. But when things start to move and in the previous paradigm I laid out with Iran pumping more oil into the system I would not expect gas to rise by the same amount as bread. I need bread but if I don't have a job or my job is close and the profiteers went to $10 a gallon for gas I would walk to the store and buy bread instead of spend it on gas. And so on. Now there are other considerations. My mortgage is set. I am not one of the idiots who took an adjustable rate mortgage. Mine is fixed. My payment is fixed so if I saved some dollars and dollars aren't totally abolished then I can pay my old mortgage with old dollars regardless of what they are worth now. If I have Gold and it goes to $10,000 an ounce that would be awesome in terms of my mortgage. A person with say $50k left on their mortgage could spend $5500 right now on 5 ounces of gold, and if it went to $5,000 an ounce, sell it and pay off their mortgage effectively for $5500.
On the other hand if I have a credit card which can change my rate as they like then they can adjust my payments to cover their problems. You already pay for all the dead beats they hand out credit too. That's why you pay loan shark rates of 20% and higher.
The guys at the banks have done these calculations and when they start to fail they have only one concern. Themselves. While the banks might be acquiring Gold, Real Estate, etc with their depositors money they are private businesses and when they close their doors and everything goes into litigation for years they will have the cash in the vault and the Gold and other assets to fight in court, leave the country, etc.
And I don't think it is anymore complicated than that because they certainly don't hold enough gold at any likely price to cover their debts, investments, interest, leveraged debt out the whazoo, etc. It is literally a Golden Parachute for the owners and top co-conspirators. (only kind of joking on that last part)
I could write a book on any one aspect of this whole thing and still not come even close to covering the scope for that one thing. Just like the book writers like Dent, Schiff, Rickards, etc. That's why you have to BOIL THINGS DOWN FOR YOURSELF and POSITION YOURSELF. But even then you may boil it down wrong. It is like trying to tell someone after the fact what happened on the field during the last play of a Football Game (American). The Quarterback dropped back into the pocket, the line stood up and did a pass guard, a Back found an opening in the middle, the QB threw the ball, the Back had room to run and TOUCHDOWN. But inside all that Right Guard Joe Schmoe could have slipped and fallen down allowing the Defensive Guard in a bit, the Center sees this and pushes sideways and knocks the penetrating Guard toward the Tackle, and the next Defensive Guard sees the hole vacated by the Center and rushes in causing the QB to step back but at the same time the people trying to rush in the hole that originally began with the Offensive Guard slipping all shift like water down a drain trying to get into that hole and that winds up leaving the middle open for the Receiver. So in essence a slip by the Guard created a sack opportunity that in the end created a scoring opportunity for the Offense.
Financial stuff and life in general is like that times a million. It is currently obvious that more oil from Iran will drop prices even further but if I were a conspiracy theory guy I would be watching for sabotage of Iran's now aging pumping capacity. Some might think you could sabotage a refinery and raise prices of gas because you temporarily hurt the supply. And that is true of gasoline but when you take out a refinery you also create a choke point for the movement of supply. With one less refinery to supply those stockpiling OIL have no place to send it so at some point they can't buy anymore because they can't store it and Saudi Arabia could have 10 million extra barrels and if no one can store 1 million more it sits in the harbor with no where to go. I wouldn't be surprised to see oil tankers sitting off the coasts of countries like the US and China with no where to unload. Another hurricane in the American Gulf like Katrina and we have a problem.
You could sell future contracts if you are Saudi Arabia or all the other OPEC countries to keep the cash flowing. You could sell your entire output for the next year up front and in fact that's what happens now. Buy now deliver later. The problem with that is what we are seeing play out. People bought futures all the way down the tumbling price of oil. Someone paid $100 a barrel and by the time that contract got fulfilled oil was down to $90, then again at $80, etc. That's why it didn't totally collapse the system. It's those people with contracts so far out in the future that bought in at $100 and the price is now down to $30 that are screwed. The others just lost increments of $10 or whatever each cycle. And that's what makes FUTURES buying risky and now even riskier in an unstable unpredictable market. It is also how you can go from a modest buy to wealthy very quickly. It can work both ways obviously. Of course this is an over simplification. I'm only pushing ideas here not sound financial advice.
This is also where someone willing to play rough with the means to play rough can effect the direction of a market. It is also how someone watching from the outside might spot "a play" in the works. In the before mentioned scenario where a refinery is damaged or Iran's infrastructure is damaged a person might position themselves to benefit from that. This is played out on very very large scales such as destroying the economy of an entire country like Russia. Saudi Arabia pumps like mad to drive the price down and those dependent on mostly oil revenue like Russia suffer. It would not be a surprise to me to see ISIS, which is either a true independent actor being aided by outside forces, or a totally artificial construct meant to cause problems, either way they can be steered toward Iran. Or even a small "faction" sent in to suicide bomb some of Iran's infrastructure. Which would be the cheapest and most plausible scenario. If I were Iran right now I would be posting everyone I possibly could around my borders and around my oil fields.
How would you spot this particular play? Keep your eyes out on the news. The corporate news is a tool like everything else. Do we really need to know that a bus load of nuns went off a cliff in Peru? Does that really effect my life in Illinois? No. But you fire off twenty stories per day of death and despair around the world and you have a psychological tool used to keep people off balance. The news is also used as a tool to psychologically set the stage for the acceptance of something to come. If you wish to hit a target like Iran's oil fields to shut down part of the supply you start putting out stories about ISIS having a grudge against Iran. Every now and then you have a story about supposed exposed plots against the same. You run this for awhile in varying different angles and then when it happens no one is surprised.
Sounds like Conspiracy Theory doesn't it? Anyone reading my blog from the beginning will see how I like to craft Conspiracy Theories and Mysteries. But ask yourself do you really need to know 20 people died in Peru? Do you really need to know about some dude in Norway keeping girls locked up in a basement for 5 years? Do you really need to know any of the hundreds of horrible things you read about per year in the news? Then ask yourselves what did you really need to know? Did you need to know that a Bush was working for the Saudi company in charge of security for the twin towers? Did you need to know that a list was made prior to the 2000 election by Jeb Bush and Katherine Harris of felons and people with names similar to felons in light of the fact that George Bush won the presidency in his brother's state by a mere 573 votes in an election where the other guy got 500,000 more votes nationwide? And knowing that does it cause you to reflect on why the United States has such a provision in its election process to subvert the will of the people? Electing the son of a previous president whose cabinet members wanted to take over a large portion of the Middle Eastern Oil fields in the early 90s but didn't get the opportunity. The creation of fake intelligence to facilitate the attack on a target under the pretense of a War On Terror when 15 of the 911 attackers were Saudi not Iraqi? And would this knowledge explain why Saudis are now taking a huge pay cut in their oil to help destroy Russia? Does any of that figure into your thinking? And are they actually taking a pay cut? Are the stories of US Treasury plates for $100 bills and presses being given to Saudi Arabia years ago have any truth? And who audits these people to see if they really are only getting $30 a barrel for oil? Do their accounts reflect that?
But what if I spun this back the other direction and let history exonerate these would be conspirators? That can be done too. What if you looked off in the distance as the member of the NWO, ILLUMINATI, G7, OR WHOEVER and knew something was coming. What if you did the math and realized that you have 70 million people about to retire over a span of 20 or so years and they would be sucking up more benefits than you can pay? Or any of a number of other "perfect storm scenarios" you can envision. And you run the country that owns the most powerful military on the planet and has the most influence and you believe that any weakness in that country would cause an unbelievable amount of suffering in the world in general if you aren't THE ONE ON THE WALL. And in this scenario it doesn't matter if this is true or if it is just what you believe to be true. If you are standing up to your knees in gas and your enemy lights a match do you wait until they are close to blow it out or pull your 9mm and shoot them before they enter the room? A poor example perhaps of preemptive action but you get the point.
Or lets go way off into Conspiracy land. Let's go back to the words of Ronald Reagan who suddenly decided Russia wasn't our enemy and that we both may some day face an enemy "not of this world". A speech he gave incidentally. Would it then seem understandable why we stop building a "Star Wars" defense shield and shared the technology against a possible common enemy? And what about the recent buried story of Hilary Clinton and John Podesta wanting to open the documents on UFOs? Does that figure in? What about Eisenhower who we know warned us about the rise of the "Military Industrial Complex" this is a matter of fact. You can watch the speech yourself. But did he also threaten to invade Area 51 because they wouldn't tell him their secrets? In fact you can watch any number of videos of people who "would know" talking both up front and in circumspect about what they know.
https://www.youtube.com/watch?v=Ag44dRO8LEA - Reagan speech to UN.
https://www.youtube.com/watch?v=8y06NSBBRtY - Eisenhower MIC speech
https://www.youtube.com/watch?v=y7XbJiymbM0 - John Podesta
https://www.youtube.com/watch?v=wsEd_b1C8DY - Gordon Cooper Astronaut
https://www.youtube.com/watch?v=9tKWElDHhY4 - Edgar Mitchell Apollo Astronaut
https://www.youtube.com/watch?v=ZsjmK5BFAqc - Buzz Aldrin UFOs and Phobos Monolith
Does the government and people who are close to the government have special knowledge that we don't. I think the answer to that is a no brainer. Obviously they do. Does this have anything to do with the lunacy that is our current society and our current state of affairs? You can approach this idea from several viewpoints. Is it a scenario like Independence Day where Judd Hirsch points out you don't pay thousands for a toilet seat. You buy a $30 toilet seat and put the rest in a black fund. Or like Morgan Freeman in Deep Impact where money is siphoned off to prepare for an asteroid impact.
Crazy stuff right? Is it simply the super wealthy, who don't even appear in the Forbes Fortune lists because their wealth is so vast that it doesn't even matter anymore, manipulating the world for their own ends or for the ends of humanity in general. I mean how petty would you have to be when you are wealthy enough that money doesn't even matter anymore to attempt to move the worlds economy around to suit yourself. Making money doesn't matter anymore. You absolutely can have anything you want on the planet earth and even nearby in space if you wanted it bad enough. What does another billion here or there mean? Is it the money they want? The digits in a computer? The numbers on cloth bills? Or are those just means to an end. What if you needed tons of gold for a radiation shield and silver for electrical contacts. Platinum for catalysts. Diamonds for drills. If you can print or create all the money you want but what you wanted were materials what better way to acquire all of it you can than to make it all dirt cheap and buy it up? Why not buy it up at any price if you could print all the money you want? If I bought ten tons of gold when it was $1900 then someone is going to ask where I got that money. But if I buy ten tons over a decade as it slides down to $1100 it isn't as noticeable. Is a piece of land integral to your plan? Bust the market and buy it up. Are you building a DNA ark for future survival of the species? Use the healthcare and justice systems to DNA sample everyone you can.
It all looks like rampant and possibly failing capitalism. But is it something else?
That's the bigger question isn't it?
I will edit this later for grammar and spelling. Going to watch UFO videos for awhile. LOL
