Even the Money Printers Are Loading Up On Gold

Phoenix Capital Research's picture


Anyone who wants to get to the truth behind the inflationary threats to their wealth should ignore everything the Central Banks say about inflation and look instead at their actions.


Worldwide gold demand in 2012 was another record high of $236.4 billion in the World Gold Council’s latest report. This was up 6% in value terms in the fourth quarter to $66.2 billion, the highest fourth quarter on record. Global gold demand in the fourth quarter of 2012 was up 4% to 1,195.9 tonnes.


Central bank buying for 2012 rose by 17% over 2011 to some 534.6 tonnes. As far as central bank gold buying, this was the highest level since 1964. Central bank purchases stood at 145 tonnes in the fourth quarter. That is up 9% from the fourth quarter of 2011, and the eighth consecutive quarter in which central banks were net purchasers of gol




Note… Central Banks, while talking down money printing and denying the presence of inflation, bought more Gold in 2012 that any year dating back to 1964. Indeed, However, since becoming net buyers of Gold in 2010, the Central Banks have been increasing their Gold purchases rapidly.


In 2010, Governments worldwide bought 77 tonnes of Gold. In 2011 it was 457 tonnes. And last year it was a whopping 535 tonnes. All told, they’ve accumulated  1,000 tonnes of Gold since 2Q09. At today’s price of $1600 per ounce, this stash is valued at over $56 billion.


The key issue here is not the amount ($56 billion in Gold purchases is nothing compared to the over $10 trillion in new money Central banks have printed since 2007), but the trend: Central Banks were net sellers of Gold for decades until 2010.


Other major investors are looking to get their hands on Gold… not the promise of Gold, but the actual metal.


Germany has the second largest Gold reserves in the world behind the US. Since the early ‘80s, it has stored the majority of these reserves with the NY Fed (45% vs. 13% in London, 11% in Paris and the remaining 31% in Frankfurt).


With that in mind, everyone needs to be aware that last Monday Germany’s Bundesbank announced it will be moving a major portion of its reserves from the US and all of its reserves from France back to Frankfurt.


Nearly half of Germany’s gold reserves are held in a vault at the Federal Reserve Bank of New York — billions of dollars worth of postwar geopolitical history squirreled away for safe keeping below the streets of Lower Manhattan.


Now the German central bank wants to make a big withdrawal — 300 tons in all.


On Wednesday, the Bundesbank said that it would begin moving some of the reserves, the second-largest stock in the world after that of the United States. The goal is to house more than 50 percent of German gold in Bundesbank vaults in Frankfurt by 2020, up from a little less than a third today, the bank said…


The new policy will include the complete withdrawal of 374 tons of German gold stored at the Banque de France in Paris, about 11 percent of the total. Bundesbank officials were quick to note that the decision was not a reflection of French trustworthiness. Rather, because France and Germany now share the euro, there is no need for reserves as insurance against currency crises.




This announcement came with the usual political statements that the decision had nothing to do with a lack of trust between the Bundesbank and the US Fed or Bank of France, but the message is obvious: Germany sees the writing on the wall and is moving to secure its Gold reserves.


The same goes for Texas:


Texas Republican State Representative Giovanni Capriglione authored the bill demanding state owned gold bars be returned to the Lone Star State. The legislation to pull $1 billion in gold reserves from a Federal Reserve vault in New York is supported by Governor Rick Perry.


The financial crisis in Cyprus which prompted a run on the bank and ultimately a closure of the financial institutions reportedly bolstered support for the Texas gold bar return bill. State Representative Capriglione had this to say about why he penned the bill:


“For us to have our own gold, a lot of the runs on the bank and those types of things, they happen because people are worried that there’s nothing there to back it up.”


Governor Perry stated that if Texas owns the gold, then no one else should be able to determine if the state can reclaim possession of the bars of precious metal. Representative Capriglione also noted that Texas is not interested in implementing its own gold standard. According to the Republican’s statements about the gold bars bill, he simply wants to bolster the state’s fiscally secure reputation. The Texas public servant also feels that such a solid financial persona would be beneficial in case an international of national fiscal crisis occurred.


The legislation notes the state does not merely want gold certificates from the Federal Reserve, they want the actual gold bars to store inside a planned Texas Bullion Depository. Moving $1 billion in gold bars from New York to Texas would be a huge task, one some are calling impractical. State Representative Capriglione suggested selling the gold currently housed inside the New York vault and then repurchasing the same amount in Texas.




Investors forget that the single most important role played by Central Banks is to maintain confidence in the system. For that reason they will NEVER admit inflation is a problem. But if inflation isn’t a problem, WHY ARE CENTRAL BANKS LOADING UP ON GOLD?


With that in mind, now is the time to be preparing for inflationary disaster.


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Best Regards,

Graham Summers


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Yancey Ward's picture

Moving $1 billion in gold bars from New York to Texas would be a huge task, one some are calling impractical. 

Seen this stated many times with respect to the Texas gold and the German gold, but why "impractical"?  In the case of Texas, it is about 20 tons of gold- basically a semi-truck's load.  Surely providing security for the transfer and the insurance isn't that daunting a task??

RaceToTheBottom's picture

China is buying up all the manipulated low price western gold.  It knows in order to become a world currency, it will need gold backing it up.  The US is getting scared how dumb it will look if people recognise that the US made China a world currency by selling it discounted gold, so the US will stop manipulating gold prices.  Or something like that....  Read that somewhere...

luckylongshot's picture

So Germany tells France it wants its gold back, France negotiates to deliver it back over 7 years at 50 tons a year and a few weeks later France invades Mali, which as luck would have it produces 50 tons of gold a year....and this guy actually thinks France still has Germany's gold!!!!....

The Heart's picture

So ah, is this what cause the deaths of the pigs, swans, ducks, and fish in those china rivers?


strannick's picture

"Moving $1 billion in gold bars from New York to Texas would be a huge task"

-nothing a couple of good ole boys with an F350 a gas card and a gun rack couldnt manage..

Sudden Debt's picture

1900 insured Fedex packages.

Vooter's picture

Yeah, really--$1 billion in gold at current prices is around 39,000 pounds, or 19 tons. That's about a quarter of the capacity of a single 50-foot railroad boxcar. It wouldn't be that hard...

Dick Gazinia's picture

i think more like 52,000 lbs.   There are 12 Troy ounces in a pound, not 16.

TrumpXVI's picture

There are 12 troy ounces in a TROY pound, not in one pound avoirdupois.  I believe that there are 14.58 troy ounces in one pound avoirdupois; 480 grains per troy ounce/437.5 grains per avoirdupois ounce.  But I'm horrible at math so somebody better check this out.

andyupnorth's picture

What are these units that you're using?

My car gets fourty rods to the hog's head and that's the way I likes it!

Abe Simpson

pbppbp's picture

Shit, the whole article was an ad.

Fuh Querada's picture

and the "news" is as stale as Kim Jong Un's jockstrap.

strannick's picture

Welcome to Phoneix Capital. The stuff that isnt an ad is usually wrong, ie. there will be no QE4

Watson's picture

If, _on bebalf of their country_, Central Bankers/Politicians are doing anything, it is probably best to go the other way.

But if you can find out what's in their _personal_ accounts...

In any event, it is simply a historical fact that gold is a lousy inflation hedge.

But, held in small physical units directly by the owner, a great hedge against massive social unrest/foreign invasion...

dunce's picture

The Germans aren't not worried about the French banks because they both use the the euro, but they have both used the euro for many years and now they want that gold in the country. No one should be curious.

Loucleve's picture

me thinks that after they've bought it all up, it will be back to the gold standard.  if we still exist.

what i wonder is, how the hell do they keep the price suppressed?  I know why.  if it traded freely, it would be screaming, then we'd have panic, then they would lose control.

contrary to the opinion in the article, ags and metals are cratering and inflation is not now an issue.  even if prices have risen more than published.

surf0766's picture

They are using your fiat tax dollars to buy and then it will come up missing. Just like always


andrewp111's picture

Don't Central Banks always sell at the bottom and buy at the top?

angel_of_joy's picture

Only the dumb ones... like BoE.

StarTedStackin''s picture

Gold and Silver are not money and never were. Real money grows on trees and is printed ............Channeling Dr KrudBonerz

Mototard at Large's picture

Except for that Austalian Polymer fiat currency which does not grow on trees but it made out of polymer plastic (oil!)

Spectre's picture

I guess the various central banks accumulating gold is no different thatn the DEA hoarding cocaine, they all know where the value & vehicle is for trading purposes, but cannot openly brag about it.


This is one particularly Fucdup world we live in.

diogeneslaertius's picture

central bankers would never ever all print more money than ever before at the same time while stacking and telling the slaves to buy securities via the hijacked fourth estate - BLASPHEMER!


this is very al-qaeda and i think i might have to forward your article to janet napolitano for thoughtcrimes and potential domestic terrorism

musket's picture

It's been a rough ride since August of 2011.  Every dollar loving talking head has been talking down precious metals since and will probably refuse to stop.  Even George Soros is piling on the invective while simultaneously buying with both hands.  Cheers to all....and hold on.

e-recep's picture

jews always hoard gold. it's been like this for the last 5000 years. why? coz it holds its value even when countries and kingdoms disappear. it is easy to carry. it is easy to hide.

spdrdr's picture

Yes, this is why the Jews were stripped naked (remember the photos?) at the end of their rail journeys to the various camps - yet again, the Nazis wanted the gold.

Today, it is a little more polite.

You neo-nazis should just rot in Hell.  We have defeated you once, and we shall do so again.  FOAD.


e-recep's picture

chill dude. what are you smoking?

spdrdr's picture

Peace, Bro, I'm just kind of sick and tired of the recent anti-Jew commentary on ZH. 

I'm not Jewish, nor do I even have any Jewish friends.

It just gives me the shits.



e-recep's picture

my comment was in no way anti-jewish. i merely state a fact. yes, jews always hoard gold and it's a wise thing to do. i commend them for their wisdom.

spdrdr's picture

By the way, all of you fucking Nazis can down-ping me to your heart's content.

Fuck you all, and I will fight you to extinction.  Yours. 

jeff montanye's picture

the ride in bullion has been nothing like the over the falls waimea bay style the miners have taken but it may be turning.  check out the chart below (and, while there is dispute over the absolute low of the miners vs. gold now vs. the 2008 low, xau vs. the longer existing barron's index, there is no controversy (re: barron's index) about years prior to 1984 back to 1964):


not that the development isn't very important but the piece by summers above treats the german grab for gold as breaking news when in fact (see link in piece) it is three months old.  as they say, what's with that?