Ukraine Bank Runs Could Soon Be Seen In EU And U.S.

GoldCore's picture

Today’s AM fix was USD 1,327.75, EUR 961.65 and GBP 793.21 per ounce.
Yesterday’s AM fix was USD 1,331.00, EUR 974.81 and GBP 799.88 per ounce.    

Gold climbed $1.50 or 0.11% yesterday to $1,330.50/oz. Silver rose $0.04 or 0.19% at $21.28/oz.

Gold in U.S. Dollars, 5 Days - (Bloomberg)

Gold headed for its first back to back monthly gain since August as concern that the U.S. recovery may be losing momentum, concerns about the Chinese economy and turmoil in emerging markets is leading to haven demand. Assets in gold exchange-traded products are set for the first monthly increase in 14 months. Gold ETF holdings climbed 0.4% this month through yesterday and are set for their first monthly gain since December 2012.

China's economy may exert an important influence on markets again next week. A poor PMI number on Saturday could lead to a renewed bout of 'risk off' in markets next week.

Gold in U.S. Dollars, Year To Date - (Bloomberg)

A two-week slide in China's yuan accelerated today when it had its biggest tumble since 2005 on speculation the the central bank is stepping up efforts to push it lower. A 0.9% drop against the U.S. dollar Friday brought the week's losses to 1.2%, more than twice the 0.5% loss that spooked the market last week, coming as it did after years of steady gains.

The weakness in the yuan is likely to be temporary as longer term the yuan looks set to appreciate against major currencies - intervention or no manipulation by the PBOC. Were there to be further weakness in the yuan and a prolonged bout of weakness, currency wars will likely rear their ugly heads again as other nations seek to devalue their currencies in order to maintain export competitiveness.

Ukrainian Hryvnia in Gold, 5 Days - (Bloomberg)

The plunge in the Ukrainian hryvnia this week and the risk of bank runs, not to mention the risk of contagion for European banks exposed to Ukraine should support gold. The Ukrainian currency has collapsed 22% versus gold this week - from 11,684 hryvnia per ounce on Monday to 14,235 hryvnia per ounce at 11:30 GMT today.

Rising geopolitical tensions between Russia and the West over developments in the Ukraine should also be supportive. This morning Ukraine has accused Russia of invading Ukraine and is considering a state of emergency after masked gunmen occupied two Crimean airports.

Other geopolitical flash points include Thailand, Venezuela and the Middle East which continue to quietly simmer in the background. Tail-risks have increased and could lead to a renewed safety bid for gold in the coming weeks.

The increasing scrutiny by regulators and the media on the manipulation of the gold price should also support gold. The FT’s story regarding manipulation and the likelihood of lawsuits against banks engaged in manipulation was withdrawn from the internet earlier in the week and overnight Bloomberg has again covered the possible manipulation of gold at the London A.M. fix. This story has been bubbling under the surface for years and may blow up in the coming weeks leading to higher gold prices.  

However, in the short term there are technical risks and a lower weekly close this week - below $1,324.35/oz - could lead to a quick and sharp retreat to support at $1,307/oz, $1,300/oz and $1,280/oz.

Gold in U.S. Dollars, 1 Year - (Bloomberg)

On balance, we are bullish for next week. However, a lower close today and for this week - could cause short term jitters and retracement. Gold analysts surveyed by Bloomberg are divided in their outlook for next week. Fourteen participants were bullish, sixteen were bearish and six were neutral.

Chinese Gold Imports Surge as Yuan Falls Most in Three Years
Chinese net gold imports surged in January and the 83,638 kilograms were more than the first two months of 2013 combined, when just 80,527 kg was imported. Strong Chinese demand may be fueled by concerns by the Chinese about their banking system, the value of the yuan and the risk of inflation.

Gold in Yuan, Yuan in USD and HK Net Gold Exports to China - (Bloomberg)

China’s gold imports from Hong Kong fell month on month in January from December as some jewelers and fabricators in the world’s largest consumer of the precious metal reduced purchases from the record levels of demand seen in December, and indeed in full year 2013.

Hong Kong Total Gold Net Exports to China - (Bloomberg)

Net imports totaled 83.6 metric tons last month, compared with 91.9 tons in December and 19.6 tons a year earlier, according to calculations by Bloomberg News based on data from the Hong Kong Census and Statistics Department today. Exports to Hong Kong from China declined to 19 tons in January from 34.8 tons in December, the Statistics Department said in a separate statement. Mainland China doesn’t publish such data.

IMF Data Shows Turkey Joined Russia In Reducing Gold Reserves Marginally in January
Turkey’s holdings dropped to 15.708 million ounces versus 16.71 million ounces in December, data on the IMF website shows.
   *Russia’s bullion reserves fall to 33.266M oz vs. 33.283M oz in Dec.: IMF
   *Mexico’s gold holdings decline to 3.955M oz vs. 3.958M oz in Dec.: IMF
   *Latvia also reduced bullion reserves in Dec.: IMF
   *Kazakhstan’s gold assets expand to 4.67M oz vs. 4.62M oz in Dec.: IMF

Given increasing geopolitical tensions and monetary risk, we would expect the Russian central bank to continue allocating foreign exchange reserves to gold bullion in the coming months and indeed this trend could accelerate.
Ukraine Bank Runs Could Soon Be Seen In EU and U.S.
Bank runs in the Ukraine and Thailand today and Venezuela earlier this year, show the very fragile nature of our modern fractional reserve banking system. If just a small percentage of depositors withdraw some or all of their cash from the bank, there is not enough cash available.

The newly appointed governor of Ukraine’s central bank, Stepan Kubiv, said last Monday that as much as 7% of total bank deposits were withdrawn from February 18th to February 20th. The $2.9 billion (30 billion hryvnias) in cash was gobbled up by anxious depositors during a time of intense fighting between protesters and government forces in Kiev.

The plunge in the currency this week is likely to have exacerbated that trend and much more Ukrainian bank deposits were likely to have been withdrawn this week.

People line up to withdraw money from an ATM in the western Ukrainian city of Lviv, Feb. 20. (Yuriy Dyachyshn/AFP/Getty Images)

In a fractional reserve banking system, if too many depositors withdraw their cash, banks are forced to either shutdown or declare bankruptcy. Typically, they don’t have enough vault cash to pay their depositors. Ordinarily banks in Western countries have just 10% of deposits in cash, although figures in emerging markets may be higher.

But the modern version of a bank run often involves capital flight. Depositors aren’t only going for their cash, they are also wiring their savings out of the country in record numbers through electronic wire transfers. This is a form of silent or stealth bank run, as it is not visible in terms of angry depositors queuing up outside banks as was seen with Northern Rock in the UK and elsewhere in recent years.

On Wednesday evening, we interviewed the publisher of the Trends Journal, Mr. Gerald Celente. 

Celente is a contrarian commentator whose opinions are sometimes controversial but always thought provoking. He has a great track record at predicting many of the key financial, economic and geopolitical events of the last 30 years.

In an interesting question and answer session Celente addressed concerns about terrorism, a World War, financial meltdown, the risks of bank runs and difficulties in accessing savings in Europe and the U.S. in the coming months.

He pointed out how Cypriot depositors lost savings in bail-ins and that in the Ukraine today “massive bank withdrawals are going on.”

Celente said that the 9/11 attack and subsequent restrictions on access to bank deposits in New York , when Wall Street was closed down for a few days, may be seen again. He warned of the risk that “ATM machines are not working anymore” and the authorities are “putting restrictions on what you can draw out.”

He advised owning physical gold and silver in your possession and said that the precious metals are like a “cash cow when you have the real deal”.

“If you have gold or silver, you are in a golden position,” Celente said.

Despite the many risks of today, Celente saw light at the end of the tunnel. He said that there are opportunities in “clean food”, breakthrough alternative energy, alternative medicine and in digital education and internet learning.

The video of the question and answer webinar with Gerald Celente can be watched here.

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elwind45's picture

Sells Ukraine's gold to itself? Or you got a love the value store in between dollar strength doesn't U

elwind45's picture

Gold should be in demand well until Russia sells Ukraine gold or yuan continues to fall and private citizens sell their personal for food. O course you can believe what you want but when media convincingly portrays all three parties were caught off guard and gold falls. So mucha for der dead cat bounce?

Pinche Caballero's picture

All of you, don't lose hope! each of you are making a difference, slowly getting the word out. The onus is on those who are willing to listen to take it upon themselves to act. The folks here at ZH are making a difference. I have been learning much, taking the advice of some here, wrapping up loose ends in my personal life. I am middle-aged, and am excited to learn and prepare for the future. What you are asking is that many like myself toss away the model for living life that we grew up with, and was in place even before our time. That is a hard sell for many. All of you young studs who rant about old farts not being willing to learn new shit...

Based on a recommendation by others here, I have recently finished reading When Money Dies. My take away is that most segments of the post-WWI population of Germany suffered tremendously during the inflationary and deflationary periods of the Mark. What is not generally commented on is that the various population groups suffered at different points along the way during this period. First it was those on fixed incomes, then government, then labor, then industry, and so forth along the timeline.

Those who suffered least were the farmers. At first, during the inflationary period, they were able to pay off property mortgages and equipment relatively quickly. During the deflationary period the farmers were still able to support themselves, and in many instances, were financially in a stronger position to do so due to their reduced personal debt. They neither needed nor accepted the worthless currency for what they produced and had plenty of, foodstuffs. They did, however, accumulate many of the tangible assets previously hoarded by others in Germany in exchange for food. The biggest threat to the Farmers were roving bands of starving people from the towns and cities.

Am I mistaken in all of this? Help me out here., feel free to correct me.

I have not been burying buckets of food, but rather, have been learning gardening and keeping some small animals. I own the means to food production. I have been paying down debt, and have been converting cash to tangible assets. I have purchased gold for wealth preservation, and silver for a means of exchange. I have worked to minimize my reliance on the infra-structure, and started slowly weaning myself from a consumer oriented society. I have become more involved with others in my local community, and have established some great relationships based on what we each bring to the table in the form of practical matters.

Just a few years ago I would not have understood much of what was posted on ZH, much less recognized the need for acting on what I learned.

Recently, based in part on my understanding of things, I have even started posting here myself, hopefully in a meaningful and constructive way. This also would not have been previously possible for me. Here is an example, below, of where I am at in my world views, much in part due to all of you.

For what it's worth, my post on another thread from this a.m.:

All that needs to happen is either Putin just keeps sayin' fuck you, U.S., or China just lets its debts-ridden economy collapse. Either one leads to the final undoing of the U.S., without a shot having been fired.

When the other countries of the world also begin to believe the U.S. is just an empty shell of its former self, and no longer carries the biggest stick, then they are free to determine amongst themselves what basket of currencies will become the international reserve currencies. The U.S not only won't have a seat at the table, but won't even be allowed in the room during the discussions. The flood of $s back into the U.S. will be in such staggering amounts, QE will appear as nothing, and the only perceived salvation will be the issuance of a new U.S. currency.

All that Russia and China will have to do then is throw open the vault doors and allow the Western media to openly report to the world on the gold to be used to back their respective currencies. Oh, and tell the U.S., "The world has seen our gold, let us see how much you have to back your currency with."

IMO, we have already put ourselves into just such a position, and the U.S. has no room to maneuver at this point. We are fucked, and doubly fucked.

elwind45's picture

Spray paint on tungsten SO what you gone do? The same time you see the paint a stormtropper is at the door? At every door and not just looking for gold either. By being a part of this community makes you a gold bug and a lot more above average than the rest and NICK FUCKIN DANGER to the.......

elwind45's picture

We have already put ourselves in position for what a collapse? The only collapse you are seeing is EM(emerging market). America has the industry the banks and fed? What you got a pan and pen get with the program buy a Myra and split ZH. Money is crap and gold is king than prince then knave or China sells gold to eat? Gold at 700 seven hundred

Pinche Caballero's picture

As soon as this old fart figures out how to get his replies to show up where he thinks they were going to, I'll quit fucking up the threads. Fucking computers and damned intranets. And all you kids who grew up with this boondoggle... Fuck you you too for laughing.

satoshi123's picture

If I had a nickel that I didn't want, then I would subscribe to a "Celente Newsletter", that said, I don't have a nickel I'm willing to toss in the garbage.


Please folks, this is a country, that was 'running on empty', and along comes HILLARY/LURCH and spent $5 Billion USD to hire every 2 bit whore and CIA goon to fuck said nation, and now you think their money is worth? What shit? Even Fonestar is worth more than the UKRAINE.

zipit's picture

WTF is "clean food"?  That's a new one to me.  Also, Bitcoin is more transportable than gold.  Sel lUkraine currency.  Put half in Bitcoin and half in gold.  Carry on.

fedupwhiteguy's picture

I would say that "clean food" is the alternative to the food that China will be selling us from now on.

The Final Straw's picture

I propose that the dollar be backed by bread. $1= 1 "standard loaf".

Donewidit's picture

Rev 6:6 Then I heard what sounded like a voice among the four living creatures, saying, "Two pounds of wheat for a day's wages, and six pounds of barley for a day's wages, and do not damage the oil and the wine!"

zipit's picture

I think the rate is $1 per slice of bread.

layman_please's picture

ukraine has their own currency and central bank. until they don't run out of paper and printers keep up with the withdrawals, bankruns are least of their problems. inflation, on the other hand...

TPTB_r_TBTF's picture

except they would need helicopters to move the currency from the printer to the ATM.

And with inflation, they need bigger helicopters.

Quaderratic Probing's picture

Has anyone thought if Gold was tied to the dollar gold could not rise?

gtb's picture

But what would be the price (in dollars) of gold?

SilverIsMoney's picture

Sometimes, when you're wrong over and over and over and over and over... you just gotta shut up for a while - take Jim Sinclair for instance - kinda shut up after he claimed the metals bottom was in March 2013 didn't he? Now he's trying to build a Singapore exchange to break the COMEX. Sometimes I wish these people like Celente would use their influence to ACTUALLY FIGHT, because a lot of us don't have the ability to. Them just riling us up, who already agree with them, isn't doing anything to help the situation. Most of us have real jobs, these people don't seem too, so why aren't they doing more? Stop talking about it Celente and do something - He's totally right, and he was right on KWN in 2010 peddling the same shit but the timing makes you look like a fool trying to make a buck off of us - you never see a guy like Ron Paul state anything on a timetable or work in absolutes when it comes to the metals. He understands the game like the rest of us and that's enough. These people who never shut up need to start acting...

UselessEater's picture

because a lot of us don't have the ability to

well that hits a nerve!

Its frustrating as hell especially because we know that if do start a movement of any sort it'll get hijacked or if we go against the system we'll be picked off and tormented via the police/legal/tax/family services etc agencies.

But we obviously do have some kind of ability to disrupt the system and their game plan or they would not be investing so much energy in intimidating us, spying on us, poisoning us or infiltrating our protest movements etc. I've watched a few people mount legal cases to challenge constitutional changes and lose their jobs, house, reputation as one example.

Rosa Koire and Sibel Edmonds are kinda inspiring, they and others put alot of unpaid-sweat into fighting in their own ways. Inspiration is good and I just try to do my bit:

1) prepare for me and mine; 2) talk to others, do little write ups and research/chat on local alt media; 3) write into local papers, MPs; 4) watch where I spend/put my money; 5) random bits when the opportunity presents e.g. help distribute glass-steagall-type-legis-needed info

My efforts are miniscule & probably totally ineffectual by themself but I need to know I have some ability to influence or atleast protect a few souls while this fuck up in play and, personally, I need to know that I don't have to rely on Celente, A Jones, etc to 'lead' or 'save' me.... though it sure would be nice if they could consistently punch and drive and action the message that demanding something like glass-stegall be put in place in the US, Aust, Canada, NZ, UK, etc would shut the bastards down on many fronts as Kotegawa points out....

Sometimes I wonder 'how do we actually fight' against all this? That bothers me, losing the idea of what a fight actually is and what it looks like; feels like the conditioning-forces are working on me. To me we've almost lost the fight if we have to resort to 'militia' tactics - that's pure survival and critical defence stage.

Maybe we need action boot camp for Celente, Koire, Edmonds, Kotegawa........and ZH'rs ;)



spinone's picture

You get to fight when they draft you and send you halfway around the world to kill some innocent brown skinned person.

Lets Buy The Dip's picture

probably tied to bitcoin...everyone everyhwere is blaming this on bitcoin! haha LOL > Read this --

JustUsChickensHere's picture

Yep - a proper laugh.

This lot are selling advice... and they dont even understand that MtGox is an exchange (aka brokerage) - for Bitcoins, USD, AUD, JPY, EUR, GPB and so on.

Are they suggesting that the shutdown of MtGox also means the shutdown of USD, AUD, JPY, EUR, GPB etc ... after all, those are also virtual currencies... no different to Bitcoin, except they are central 'managed' (rather badly for most people, and very nicely for some).

Cpl Hicks's picture

Bank runs...ha ha!

That's so 1929!

Cap Matifou's picture

The laughing will cease, when there is no food to buy for electronic blips.

Fuh Querada's picture

"may" "likely" "could" "should" ...this is all BS
and Celente said all that on KWN in 2010

WhiteHose's picture

What a asshole! Celente is not a soothsayer! Why dont you learn about the man and what he does before you trash him! Should be duh, not fuh

PR Guy's picture



Yulia Tymoshenko talks about economics.... Ukraine style... I don't suppose she's going to be affected by any bank runs or defaults. Especially if she gets back into power.....