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The Real Reason Belgium Sold 1,098 Tonnes Of Gold
Submitted by Koos Jansen via BullionStar.com,
For our global investigation how much physical gold central banks have stored at what location and how much is leased out, I decided to submit the local equivalent of a Freedom Of Information Act (FOIA) request at the central bank of Belgium, de Nationale Bank van België (NBB), to obtain information about the amount of Belgian official gold reserves, the exact location of all gold bars, the type of gold accounts NBB holds at the Bank Of England (BOE) and how much is leased out and to whom. The outcome of this research was not what I had expected.
History Of The Official Gold Reserves Of Belgium
Some of the questions I directed at the NBB I used a stepping stone, as this information is publicly available in part. At the end of August 2015 NBB was holding 227.4 tonnes of gold, down 0.04 tonnes from 227.44 tonnes in July, according to data from the Bundesbank that publishes the gold holdings of 19 European central banks and the ECB in compliance with the IMF’s most recent version of the Balance of Payments and International Investment Position Manual (BPM6). The Bundesbank (BuBa) publishes the fine troy ounces of the official gold reserves in ‘Gold bullion’ and ‘Unallocated gold accounts’. If we add up both categories the outcome for all countries equals the reserves disclosed by the World Gold Council.
From BuBa:
The balance of payments statistics will … be consistent with the framework set out in the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6). The application of the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) is binding for EU member states by virtue of a regulation adopted by the European Commission.
Back in 1965 NBB was holding over 1,300 tonnes of gold. Since 1978 it has sold a whopping 1,098 tonnes, or 83 %.
Belgium was one of the eight participating countries in the London Gold Pool, together with the US, Germany, the UK, France, Italy, the Netherlands and Switzerland, that operated from 1961 until 1968 to stabilize the gold price at $35 an ounce by selling/buying gold in the London bullion market. Eventually the pool collapsed in 1968 because the US had printed too many dollars and France was not willing to sell any more gold to defend the gold price at $35.
Remarkably, Belgian official gold reserves dropped significantly after the Pool collapsed, from 1978 until 1999. Likely, NBB was partially seeking to diversify its reserves into higher yielding assets or to lower the national debt, in addition it could have sold metal to lower the price or to “equalize its holdings relative to other gold holding nations”. Let me explain that last quote. Belgium was not the only European country that has sold vast amounts of gold in the nineties and before. When the Dutch Minister Of Finance in 2011, J.C. De Jager, was questioned about the gold sales of the central bank of the Netherlands in the nineties he answered:
Question 6: Can you confirm that since 1991 DNB [central bank of the Netherlands] has sold 1,100 tonnes of the 1,700 tonnes it owned…
Answer 6: Since 1991 DNB sold 1,100 tonnes. At the time DNB determined that from an international perspective it owned a lot of gold proportionally. It decided to equalize its gold holdings relative to other important gold holding nations.
So, the independent central bank of the Netherlands (DNB) had decided to sell gold because “from an international perspective it owned a lot of gold proportionally”. Clearly DNB was considering the amount of gold reserves of other central banks and weighed these against its own holdings before it decided to make a downward adjustment. Was this a unilateral decision for the sake of balanced gold reserves among central banks? I don’t think so.
In 1999 the Central Bank Gold Agreement (CBGA, also called the Washington Agreement On Gold) was signed by 14 European central banks, inter alia NBB, to jointly manage gold sales. This demonstrates central banks are not unfamiliar with managing their gold reserves in concert. First there was the London Gold Pool, then the Dutch sold gold to equalize their holdings relative to other central banks and then CBGA was signed.
Maybe NBB has sold part of its reserves prior to 1999 for the same reason De Jager mentioned; to equalize the chips. Allegedly this was the idea behind the euro. GoldCore wrote on 28 May 2013:
Belgium announced another sale of 203 tons of gold on March 27, 1996, stating that the sale had reduced the share of gold in total reserves to a level which would facilitate the participation of the National Bank of Belgium [NBB] in the process of European unification and which, corresponded to the proportion of gold in the total reserves of the Member States of the European Union.
More information about the Belgian gold reserves that was perviously known: most of it is stored at the BOE in London, the heart of the global gold lease market, hence my question at the NBB regarding the type of gold accounts it has with the BOE. From searching the internet and the website of NBB I could read Belgium had leased out 84 tonnes of its gold reserves in 2011, this decreased to 37 tonnes in 2012 (lent to 5 commercial banks) and 25 tonnes in 2013 (lent to 5 commercial banks).
Data from the Bundesbank shows Belgium has a steady 17 tonnes of ‘unallocated gold’ since January 2013 and 210 tonnes of ‘gold bullion’. Apparently reserves qualified as ‘gold bullion’ (allocated gold) can be leased out, as in 2013 NBB had leased out more than was unallocated (25 tonnes versus 17 tonnes). This makes me wonder why Belgium still has any unallocated gold. (It also makes me wonder how much of the allocated gold held by other central banks is leased out.)
The Verdict
In response to my FOIA, the NBB notified me it is exempt from any such requests regarding its gold reserves – click here to read the reply from NBB in Dutch. This response was similar to that of a FOIA request I submitted to DNB in 2013 in order to obtain the list of bar numbers of the Dutch official gold reserves, which bounced as well.
NBB wrote me that aside from the rules they aim to be as transparent as possible by disclosing all information to the public about their official gold reserves that is not sensitive. NBB wrote me (my translation):
- Total NBB gold reserves amount to 227.4 tonnes (7,311,955.9 fine ounces).
- The majority of this stock is stored at the Bank or England [BOE]. The remainder is at the Bank of Canada and the Bank for International Settlements. A very tiny amount is stored at the NBB.
- The storage and safekeeping abroad happens according to standards and practices that are common among central banks.
- Against a guarantee covering 101.5 % of the credit NBB had an average of 15.7 tons of gold leased out in 2014. The counterparties are commercial banks with high creditworthiness. The NBB will not enter into any new gold leases and leave the existing book until it’s fully unwound in February 2018.
Because I sensed to be in touch with an employee from NBB that knew all about the Belgian gold, I asked why they had sold 1,098 tonnes of gold since 1978? Was it to diversify reserve assets, reduce the national debt or to be accepted to the Eurosystem. NBB replied (my translation):
The sales in question took place in the context of a more balanced composition of the reserves of NBB with regard to its integration into the European System of Central Banks, although it was not the result of a legal obligation.
Next I asked what the reason was to sell the gold if there was no legal obligation, was there a verbal agreement among central banks? NBB replied (my translation):
The aspects of the management of the foreign reserves that have not been communicated by the NBB through its annual reports and press releases constitute confidential information that can not be disclosed on the grounds of professional secrecy laid down in Article 35 of the law of 22 February 1998 establishing the Statute of the NBB.
So indeed there was a secret agreement among central banks to sell gold and balance reserves, but NBB is not required to disclose this information based on “Article 35 of the law of 22 February 1998 establishing the Statute of the NBB” – a law that was passed right before CBGA was signed and the euro was launched. Actually, the details of the agreement are secondary because NBB’s statement “the sales in question took place in the context of a more balanced composition of the reserves of NBB with regard to its integration into the European System of Central Banks”, is very clear to me. Especially when we add De Jager’s statement from 2011, “DNB determined that from an international perspective it owned a lot of gold proportionally. It decided to equalize its gold holdings relative to other important gold holding nations.”
It can’t be a coincidence both central banks sold gold prior to 1999 for “more balanced reserves” while the sales would not have been executed in conjunction of each other. My conclusion is that the gold sales of European central banks prior to CBGA have been jointly managed in secret.
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They were made an offer they couldn't refuse........
... and "someone" also party to the agreement was a little light, perhaps by a thousand tons. Or several parties, by that amount total. The Belgians were gearing up to be all-in anyway, and took the money at the market price.
However I wonder if the transfer might have been less a sale and more a lease ... or loan. Might have been done 100% in paper on treaty with no actual movement of materials.
Nothing is as it seems, it seems.
I think that if you are buying and selling gold you should buy and sell actual gold AND (and here's the punch line) you should actually have the fucking gold when you sell and get the fucking gold when you buy just like in the real world when you buy and sell something and if you don't have the actual fucking gold you should go to jail!
actual>hypothecated
question is, who bought. During the early naughties there musta been something like 4000 tonnes from northern europe hit the market. How much is in china/india, and how much in private oligrch stashes
THIS is the once in a few generations betrayal, ripe and ready, when the oligarchs throw the govts (who think their relationhip is o so cozy) under the bus. .Gov is divested, now time to send gold to the moon.
They failed to mention that they salted the 1100 tons before they moved them. That is the reason for the secrecy. They still have them, but cannot talk about them. /s (or not?)
It's not just Europe. The RBA sold a massive chunk of Australia's gold reserves in the late 90s as well.
It seems that someone, somewhere, convinced all the central banks of the world to sell their gold holdings for a pittance.
These assholes will be settled in cash for their gold 'loan' just like GLD & CME.
Inflate me to the moon
Let me get this right...,
you think they aren't telling the whole truth...?
No shit?
At least the Dutch repatriated some of their gold (or rather Ukraine's gold to keep silent about MH17 as the rumor goes). Is Belgium going to do that? Or does a Sabena jet has to be shot down above Ukraine beforehand?
Koos is probabaly the most serious voice on these complex issues. He is restrained in his conclusions, and insists on good foundational evidence before opining.
Quite valuable, really.
how sad. all gold traded for bits of paper in this rotten CB world. the Oligarchs OWN the world now. feudal lords 2.0
In the depths of the illusory human world, they might.
Beyond the edges of that reflecting, distorting mirror, they own nothing.
Their vanity will not save them. They will not understand even as reality turns them inside out.
S.A.R.
Sell All Rallies
Beggar thy neighbor. Punk.
Yearss ago, I found and bookmarked an excellent research piece on how our Treasury can liquidate our gold at will and not report it. I suspect that quite a bit of this has occurred which would explain a lot.
Where else do you think Gold Eagles come from? The biggest pile of gold in the world isn't in the West or Europe. A new sun Rises. Welcome to the Machine. 6.06
So when gold was dirt cheap there was a secret and coordinated agreement between CB's to sell their reserves to the US which it has used since the GFC to suppress the price of gold to defend the value of the dollar?
Belgium looks like a captured state according to this.
I've been to Brussels recently and I can tell you that Belgium has been captured by the Caliphate by the looks of downtown Brussels.
E.U. and U.S. cleptocrats have sold out their people. Better teach your grandchildren the direction to Mecca for when they bow, and submit your granddaughters to the sharia approved dress code, because no one in Washington is defending what's left of the Christian west.
(Thanks Barrack *I'm Christian* Hussein Obama, Barraq was muhammed's winged horse)
http://www.qibla.com.br/
http://www.amazon.com/Authentic-Afghan-Ladies-Jilbab-Taliban/dp/B00LI7PA...
Red vs. Blue, White vs. Black, Christian vs. Muslim...starting to see a pattern of manufactured conflict yet? All of them being played.
Yes but it seems the red and white christians are going to be the first and worst losers, in absolute terms.
Money is gold, and nothing else.
and it bought a Union
Who needs those barbarous relics anyway! Where I can get a whole cow for 100 chickens?
The chicken to cow ratio is more like 2000 to one. No one is going to take your deal unless you throw in 100 pecks of pickled peppers.
Well the shoe maker will take my pickled peppers for a new set of wooden clogs, then we'll talk some more. Somebody broke his windows.
Krugman?
Not Krugman himself, but one of his progressive minions in skinny jeans, on his orders
I'm not particularly interested in how much they sold at the advent of the Euro, but would certainly be curious to find out who they sold it to.
Since this all took place against a backdrop of gold equalization, is it possible that the buyers were other Euro Central Banks that needed to up their stash in order to meet the minimum reserve requirements?
And what did they use to pay for all that gold if they had none of their own-- which implies that they had a broke-dick currency that wouldn't buy a bus ride in downtown Dobrudja.
What is your fuckan point?
BoP -the point. I'd say glossing over the fact that it says, in the article, that sales went to commercial banks. Out of public hands, into private hands, out the back door, when no one is looking, at cut-rate prices in magical frns, or something like that.
Since when are CBs public entities? The fact that they have to appear to play along with the politicos means little to nothing.
It's just one big shell game, rehypothetically speaking.
Who needs tangible assets when you have binary digits in a database (LIES)?
Ponzi Pyramid scheme World! When do I get my $6 million tax-free check Janet?
At first, I thought you were speaking of bitcoin.
They don't need gold.
Bruxelles has annexed the whole continent.
Without the gold, let's see how long they can keep the continent.
A continent is nice if you can keep it.
"A continent, ma'am..."
I wouldn't say that Brussel's has annexed the continet. The powers behind the EU certainly did. Unelected Presidents, kind of amazing people fell for that.
Belgium wind turbines need to be replaced.
/sarc
Didn't England sell off most of their gold in the late ninetys at rock bottom prices? IRIC several hundred tons.
Yes, under the "saviour of the world" Gordon Brown.
And he told everyone in advance to make sure he got the lowest prices as well.
But maybe all three had another purpose:
http://www.zerohedge.com/contributed/2012-07-10/gordon-brown-sold-britai...
Yes that event, known everywhere as the Brown Bottom. A brilliant move for the British people, by a great financial mind, still in good standing.
Forward globalism via consent or conquest.
Belgium, and the rest of the eu, and every other country wih a BIS cb.located in their borders, will never know how much if any gold your countries have physicaly.
1913 feederal reserve notes started printing, plan A, federal reserve notes are cb's liabilities, and americans obligations, tbtf, from 1913 til today.
1933 america defaults, part of the settlement all gold, and gold certificates taken out of circulation, gold melted down, and went where? gold cetificates destroyed, americas gold is gone.
ft. knox is full of original default agreements, and iou's which stack up higher , and higher every year.
very few citizens of countries that print thier own currencies, will ever be free, your owned as is america, by the same international bankers, imf, and the world bank, who forced america into default, and the settle ment was you will have our cbs controling your finances in your country forever while draining your assets.
You sell your gold because you own disproportionally more than others??!?!
Here is why gold prices are so low:
http://michaelekelley.com/2015/07/20/dear-fed-plz-raise-gold-price/
http://www.zerohedge.com/news/2015-07-09/are-big-banks-using-derivatives-suppress-bullion-prices/
Gold prices low? Have you ever looked at a 30 year chart
How does that chart compare to a similar chart of FRNs, 1s, and 0s?
Odd how most of the western oil exporting countries of the world dumped thier gold reserves to nil or next to it with the flimsiest of excuses. Much of this happening in the 90's (like Canada for example). However, in the context layed out by ANOTHER and his friend back in the late 1990's there is absolutely no question as to why. For anyone who hasn't spent a few weeks/months fully wrapping your head around statments like "gold and oil can never flow in the same direction" and the implications for keeping the petrodollar in use globally via massive movments of gold at prices reflecting the abundance of currency I highly recommend searching out FOFOAs blog and going all the way back to 1997
Flows. China buys gold and oil.
Tylers! Do a GD article on Freegold already!
In other words, the entire Euro project rests on the pet rocks. In case everything goes to smithereens, everything gets revalued proportionate to the gold held.
No matter which way you look at it, ceterus paribus, the outlook for Europe is shocking.
Another Gold article?
I am not going to buy Gold. I am not even going to steal Gold.
Why do television commercials try to sell me Gold? It seems to me, if Gold was so valuable, the television commercials would be trying to buy Gold from me.
No more Gold on ZH!
Why do you see so many signs everywhere you go that state, "We Buy Gold"?
If nobody bought, sold, or traded gold it wouldn't be worth talking about. Since they do, you are implicitly way off base.