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Guest Post: Finland's Gold
Submitted by Alasdair Macleod of GoldMoney.com,
On Wednesday Finland gave in to public pressure and revealed where she stores her gold reserves. The statement followed a press release by the Bank of Sweden on similar lines released on Monday.
The totals (in tonnes) for these two Scandinavian countries are as follows:
| Location | Sweden | Finland |
| Bank of England | 61.4 | 25.0 |
| Swedish Riksbank | 15.1 | 9.8 |
| New York Fed | 13.2 | 8.8 |
| Swiss National Bank | 2.8 | 3.4 |
| Bank of Finland | - | 2.0 |
| Bank of Canada | 33.2 | - |
| Total | 125.7 | 49.0 |
So far, so good. But then the Head of Communications for the Bank of Finland added some more information in Finnish in a blog run on the Bank's website. It is not available in English, so I asked her for a translation, but I am still waiting.
Instead, a Finnish reader of my own blog and a Finnish journalist who has been following this topic have independently given me an English translation of a highly relevant and interesting paragraph, three from the end. This is the journalist's:
"Maximum half of the gold has been within investment activity over the years. Gold has been invested among other things in deposits similar to money market deposits and using gold interest rate swaps. Gold investment activity is common for central banks. The risks associated with gold investments are controlled using limits, investment diversification and limitations concerning duration."
And my reader's translation:
"Throughout these years no more than half of the gold has been invested. Gold has been invested in for example deposits similar to money market deposits and gold interest rate swap agreements. Gold investment activities are common for central banks. Risks related to gold investments are controlled with limits, decentralising investments and limits regarding run times."
Half Finland's gold is stored at the Bank of England, and "no more than half" is "invested". If any "investment" is to take place it would be in London. It is not immediately clear what is meant by invested, but presumably this is a result of translation of what has happened from English into Finnish plus explanation for a non-specialist readership. However if it has been invested, then by definition it is no longer in the possession of the Bank of Finland, and will most probably have been sold into the market in return for a promise to redeliver at a later date. This follows the Austrian National Bank's admission to a parliamentary committee a year ago that it had earned EUR300m by leasing its gold through London.
The evidence is mounting that Western central banks through the Bank of England have been feeding monetary gold into the market through leasing operations. Indeed, the Finnish blog says as much: "Gold investment activities are common for central banks".
This explains in part how the voracious appetite for gold by China, India and South-East Asia is being satisfied, without the gold price rising to reflect this demand. It is also consistent with my disclosure earlier this year of the discrepancy of up to 1,300 tonnes between the gold in custody as recorded in the Bank of England's Annual Report, dated 28th February 2013 and the amount recorded on the virtual tour on the Bank's website the following June.
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More like letting someone else drown them.
The globalists are corporate raiders, only the "corporations" here are Western governments. 1) Hostile takeover, 2) Run it into the ground, 3) liquidate shareholder/citizen assets. Gordon Gekko goes to Washington.
This gold investment sounds like an insurance plan that is great as long as you never collect on it. At which time it evaporates with no recourse except loud noises.
I can't believe how many bearish posts about gold are in this thread. Isn't this ZH, or did I land on a Republican blog by accident? Gold prices to $1000 or $850 or lower? Hasn't anyone checked the cost of mining gold lately? The median breakeven point for producers is about $1200 per oz. That means many companies are already losing money, and if gold went to $1000 or $850, nearly all producers would be losing money.
The fact is the floor for gold prices is about $1200. Any price below that is simply not sustainable without creating massive supply shortages. Why? Because producers will close their mines.
So the risk of much lower prices is pretty slim. Correlate that with the potential for higher prices. Has anyone looked at the charts of available gold at the COMEX and LBMA? They have been in a waterfall this year. Why? Because someone is buying a lot of physical gold. Demand for gold is higher this year than last.
We have physical gold supplies dropping, yet gold prices are also dropping. What does that tell you? That prices are going to keep going lower? Perhaps, but do you really think those lower prices are going to hold? Is the voracious demand going to stop?
At what point does the East have all of the gold and the West decides that they want some too? When do the wealthy in the West wake up and realize what is happening? There is a major move being made for gold right now and no one seems to be noticing, because prices have been dropping.
I'll make a prediction that is easy to make. Once gold prices begin to rise everyone is going to want it. And the higher the prices go, the more they will want it.
www.goldsilverdata.com
Metal prices and commodity prices can go below replacement level and stay there for years but not forever.
In other words the market can stay irrational longer than you can stay solvent.
diogenes,
certainly the market can and shall no doubt stay irrational, yet it doesn't follow i shan't stay solvent. i've gold. with or without gold i shall have to fend and feed and otherwise survive, gold however allows me and those i love the luxury of never having to suffer insolvency.
The price of mining new gold is not a significant factor in how gold is priced, because gold is not consumed.
In Silver, the cost of mining is a significant factor, because Silver is consumed in industry.
Anyone who has done any homework on the sector should understand this simple issue of stocks vs flows.
There is no floor to the price of gold.
There is, however, a floor to the premium payable for physical delivery of the stuff.
The Two most important things I have learned about Gold:
1) Patience
2) Do Not let go of it.
Wow this Finland manipulation scandal will really shake things up--I hear the guys at Kingworldnews now say gold will hit $4000 any day now!!
Before you write off gold, check the surrounding environment; I don't think it would be wise to buy only bikinis in Siberia in mid-January....
Thing is I wonder how many times a single bar has been leased ? If the same bar gets leased 10 times (before the original lease expires) and the final person/country/bank/entity 'owns' it by 9/10 possession, then there is very low chance the original bar will eventually get returned. Unwinding the leases each 'holder' will be the new 'owner' and may try to purchase a new bar to close the lease.
Its fractional gold lending and leads to higher demand when the leases are up.
If China or India has a lot of leased gold how do you get it back in a gold crisis or gold demand surge ?
Who exactly is responsible for the return of germany's gold?
Is it the private fed res. or the US taxpayer.
Gold confiscation on cards fellas.
Whether the Federal Reserve or some other party, it doesn't matter. Either way the people who hold dollars (implicitly the "US tax payer" among them) are gonna pay with devaluation.
Another Possibility Which Always Needs to Be Considered
Ok, China and India's increased appetite for physical has been sated without there being a commensurate increase in price.
Supply has increased? Yield from mining hasn't outstripped demand. So...
...Any chance that TBTB have found a cost-effective alchemical process? Laughing yet? Might want to stop. Other metals have already been turned into gold. The known processes (known to the public at least) are not cost-effective. But, if you developed a cost-effective process...would you tell anyone? ...everyone? Hell no. Much better to somewhat take a page out of DeBeer's book and manufacture the scarcity. Or in this case, allow the illusion of scarcity to continue.
P.S. Isaac Newton - unquestionably one of history's most brilliant minds -spent quite a bit of time in that pursuit. And he didn't have laser-induced plasmas, electron beams, etc at his disposal. Da Vinci did too, but his genius in these matters was orders below Newton's.
The amount of energy required to fuse gold from lesser elements is quite considerable, and the amount of radiation from fissionable activities to split for gold is unconcealable,,and again more expensive than its worth.
The only possibilities are seabed mining of nodules and black smokers, or bacteria.
point taken, but i already addressed that with my use of the phase "known processes (or at least known to the public)", and that's central to the thesis:
You're not aware of one, and neither am i, but you must at least consider the possibilities that 1) we don't know everything and 2) some people know things that we don't, and 3) some fabulously rich and powerful folks definitely know stuff that we do not.
yeah, it's easy to point to a hypothetical, but that's the point of the exercise. contrarian considerations have served me well in many arena. As a scientist who's made a few significant "discoveries" in my dinky obscure field, I assure you that important discoveries are often made by the contrarians. "Conventional" "wisdom" is not usually worth pursuing unless you want to hang your hat on "me too".
so basically we should presume someone might just have done this using what amounts to the most advanced knowledge of particle physics, in secret, to all known civilization.
OR... it's bullshit.
Not more physical Gold and less notional. More notional and less physical Gold.
While I respect Martin Armstrong, lately his gold bashing is out of control. "You will lose half and your wife gets the other half"?
Huh? If you own physical gold, you are buying what China is buying. 2200 tons the past two years.
As you can see from the cover, gold has NEVER exceeded the 1980 high. It has been the WORST hedge against inflation possible.
Those who are already penning hate mail will most likely lose the farm on gold and the wife will take what’s left.
http://armstrongeconomics.com/armstrong_economics_blog/
And he quote's gold's "horror show" because it is down $10.
http://www.mining.com/horror-story-for-gold-investors-continues-friday-6...
How about a hedge against government insanity, overpaid CEOs, confiscation of your 401K? Gold is still uselee Mr Armstrong?
Mr Armstrong, wake me up when China stops buying gold. Better yet, wkae me up when Central Banks agree to full audits of their fantasy gold. Wake me up when new mine discoveries exceed what was being found 10 years ago.
Sometimes paperpushers should just stick to paper.
goldbugs
Man, a nothing story to feed all those who's team lost today. WCPGAF!
So basically Sweden has zero gold and Finland has 2 tonnes.
Well done boys, good work!
After the 'Maguiregate Hoax' I'm surprised anybody still believes the gatagoon nonsense of empty gold vaults, and manipulation.
Get some gorm people.
..._
I thought they stored the gold at the end of the rainbow
We most certainly do not need a gold standard, they do not work. All we need is gold itself. How the hell the bankers ever convinced the people that gold itself was 'too cumbersome' is beyond me. One ounce is $1400. Does that really sound cumbersome to anyone? I don't pack around $1400, but if I did, I am fairly sure it would weigh more than an ounce.
INVEST........ fascinating word...what does it mean? Libs use it in the sense that they/government know better what to do with hard earned money stolen from taxpayers..."were investing in education" "were investing in poverty" "were investing in healthcare" .. AND WHAT DID THE GOVERNMENT OF FINLAND DO WITH THE PROCEEDS OF THEIR INVESTMENT THAT BENEFITTED THEIR CITS??? OR WAS IT A LOSS ???? and WHERE IS THE ACOUNABILITY... when will the USSA governemnt tell us a story about investing "GOLD IN FORT KNOX".... or did it all turn into tungsten by now... WHEN WILL GERMANY GET ITS GOLD...AH BUT IT IS NOTHING BUT A BARBARIC ANACHRONISTIC NON-MONEY COMMODITIY AFTER ALL..
Finland is Nordic, but not Scandinavian. Ask any Finn.
Rhymes with Fool's gold. They'll be just fine, until the day those vault doors are opened. Lending your gold is putting your trust in JPMorgan, HSBC, UBS, Barclays... Not exactly the point in having a gold reserve in the first place, eh?
I've got a winner of an idea!
How about Finland convinces China to sell back gold at current market prices and then re-lend what is repurchased by Finland!
what, no takers?
Thank you, come again!