Turkey Repatriates All Gold From The US In Attempt To Ditch The Dollar

After Venezuela, Germany, Austria and the Netherlands prudently repatriated a substantial portion (if not all) of their physical gold held at the NY Fed or other western central banks in recent years, one month ago Turkey announced that it too has decided to repatriate its gold stored in the US Federal Reserve and deliver it to the Istanbul Stock Exchange, according to reports in Turkey's Yeni Safak. As we reported at the time, it wouldn't be the first time Turkey has asked the NY Fed to ship the country's gold back: in recent years, Turkey repatriated 220 tons of gold from abroad, of which 28.7 tons was brought back from the US last year.

And now, according to a report by the Swiss Schweiz am Wochenende, the repatriation is complete with the Turkish central bank withdrawing all of its gold reserves from the U.S. due to the "tense political situation." However, in a strange twist, instead of moving the physical gold to Istanbul as the Turkish press reported in April, the Swiss newspaper notes that around 19 tons of Turkish gold is now stored at the Basel-based Bank for International Settlements.

It was not immediately clear why Turkey would shift its gold from the NY Fed to the BIS, whose historical "gold rehypothecation" tendencies have been well documented over the years.

According to the latest IMF data, Turkey’s total gold reserves are estimated at 596 tons in May, up 5 tons since April, and worth just under $23 billion, rising 40% over the past year. This makes Ankara the 11th largest gold holder, behind the Netherlands and ahead of India.

Turkey's gold repatriation come at a sensitive time for Turkey's currency, the lira, which has been pounded for the past month, and plunged to all time lows against both the dollar last week amid double-digit inflation in Turkey, as the central bank continues to be terrified of President Recep Tayyip Erdogan, and refuses to raise rates.

Meanwhile, Erdogan has taken a tough stance against the US currency, criticizing dollar loans and stating that international loans should be given in gold instead.

“I made a suggestion at a G20 meeting. I asked: Why do we make all loans in dollars? Let’s use another currency. I suggest that the loans should be made based on gold,” Erdoğan said during a speech at the opening ceremony of the Global Entrepreneurship Congress in Istanbul on April 16, Turkey's Hurriyet reported.

In what some saw an appeal for a gold standard by the Turkish president, Erdogan added that “with the dollar the world is always under exchange rate pressure. We should save states and nations from this exchange rate pressure. Gold has never been a tool of oppression throughout history."

In other words, Erdogan's latest excuse for the crashing Turkish Lira was that there was not enough physical gold back home to launch a gold-backed currency. And now that Turkey just repatriated even more gold from New YOrk (even if it mysteriously ended up in Basel), Erdogan will be able to launch a gold-backed currency if he so desires. Unfortunately, as we said last month "all signs point to the gold being repatriated only so it can be raided, pillaged and promptly deposited in offshore vaults by members of the ruling oligarchy."

Seen in this light, one wonders if Erdogan has not cut a deal with the BIS to "deliver" Turkey's gold to Basel, providing some much needed yellow metal in a world in which the ongoing global physical gold shortage prompted banks to scrap reporting the gold forward rate (GOFO) - a benchmark of physical gold scarcity - in January 2015.

* * *

As noted above, Turkey has been one of several countries which have moved their gold from the world's biggest, and allegedly most secure gold vault, that located 95 feet below sea level at 33 Liberty Street in Manhattan, better known as the New York Fed.

The repatriation wave began in 2012, when Venezuela announced it was withdrawing all of its 160 tons of gold at the NY Fed, valued at around $9 billion. Germany’s Bundesbank then demanded 300 tons be returned, with the Fed saying it would take seven years to do so; a scrambling Germany was able to complete the process 3 years ahead of schedule. The Netherlands has also repatriated 122.5 tons of gold.

As a result, according to the latest Fed data, the amount of physical gold stored at the NY Fed has dropped to the lowest on record, or 5,750 tonnes, following a withdrawal scramble that started in 2014 and continued until the end of 2016. After a 15 month hiatus, withdrawals resumed in 2018, with 28 tons of gold repatriated between January and March, an amount which we assume is mostly Turkey.

“The central banks started the repatriation a few years ago, meaning before we had Brexit, Catalonia, Trump, AFD or the rising tensions between the Politburo in Brussels and the nations of Eastern Europe,” Claudio Grass of Precious Metal Advisory in Switzerland said recently.

According to him, the world is becoming less centralized. “If we follow this trend, it should be obvious that the next step should be an even bigger break up into smaller units than the nation state. With such geopolitical fragmentation comes also the decentralization of power."

Perhaps... but until that happens, the NY Fed still hold the world hostage thanks to its custodial holdings of 5,750 thousand tons of foreign-owned gold.


DjangoCat brianshell Sun, 05/20/2018 - 17:42 Permalink

I believe that request happened some time ago and was ignored.  Free Flynn.

In other news "If we follow this trend, it should be obvious that the next step should be an even bigger break up into smaller units than the nation state. With such geopolitical fragmentation comes also the decentralization of power."

Could there be better news than that?

In reply to by brianshell

el buitre Soul Glow Sun, 05/20/2018 - 19:24 Permalink

USA gold is deep storage, several hundred miles deep and in the form of ore.  The IMF numbers are complete bullshit.  China and Russia each have in excess of 30,000 MT.  Why doesn't the ZH article mention just how much German gold purportedly remains in that most secure vault under 33 Liberty Street (connected by an under the street tunnel to the former JP Morgan vault which was sold to China recently)?  If I recall correctly, it is over 1100 MT.  But it was stolen along with the People's Gold by the Bushes, Clinton, and Reuben in the 1990's.  All that remains are a few 90% coins, some plated tungsten bars which China sent back with a "no thank you" note,  and dead cockroaches.  If the world goes back on the gold standard, the USA is totally fucked.  Remember that little kid's game, "I'll show you mine if you show me yours."  Well Team USA is gonna be real shy.

In reply to by Soul Glow

Chris2 BaBaBouy Sun, 05/20/2018 - 13:55 Permalink

The last time Uranus was in the sign of money (Taurus) just about to leave FDR put tanks in front of Fort Knox . Bretton Woods was the outcome of the money change that Uranus brings when it passes through the money sign.

Turkey highly desirable as it has ability to lock Russia out of the Mediterranean. This is why the Russian base in Syria is so important and Putins red line.


In reply to by BaBaBouy

el buitre Urban Roman Sun, 05/20/2018 - 14:43 Permalink

Despite all the brouhaha and fake news to the contrary, Germany was only able to withdraw 20% of its gold purportedly stored under Liberty Street.  When asked to send in their auditors to validate the rest, the Fed told the Bundesbank to fuck off.  The Fed doesn't have any small helpless countries at the moment like Libya, Iraq, and Ukraine from which to still some phys.  The tonnage stolen from under the WTC on 9/11 is long gone.  As to the Erdogan story parking serious tonnage of gold at the BIS, the Prince of Lies never honors his deals.  Erdogan is just a bit too clever for his own good.  If it weren't for Putin tipping him off to the CIA coup, he would be pushing up daisies.

In reply to by Urban Roman

Faeriedust logically possible Sun, 05/20/2018 - 14:40 Permalink

Exactly my thought.  Like all bank runs, those that grab first, get the goods.  From the total "on hand" mentioned in the article, the New York Fed actually has enough gold to cover Germany and EITHER France OR Italy.  Smaller customers can kiss it goodbye unless they manage to get in line first.  If I were Portugal, I'd repatriate it all, pronto.

In reply to by logically possible

a Smudge by an… Manthong Sun, 05/20/2018 - 13:41 Permalink

Gentlemen there has never been a better time or place for They Might Be Giants.


(for the acoustically challenged:)

Istanbul was Constantinople

Now it's Istanbul, not Constantinople

Been a long time gone, Oh Constantinople

Now it's Turkish delight on a moonlit night


Every gal in Constantinople

Lives in Istanbul, not Constantinople

So if you've a date in Constantinople

She'll be waiting in Istanbul


Even old New York was once New Amsterdam

Why they changed it I can't say

People just liked it better that way


So, Take me back to Constantinople

No, you can't go back to Constantinople

Been a long time gone, Oh Constantinople

Why did Constantinople get the works?

That's nobody's business but the Turks!


(edited to include: i didn't know these guys in college. this girl named Shiela certainly did. And I wanted Shiela like nobody's business so officially in the day I HATED THESE GUYS. Only time has taught me that these guys had geopolitics (and Shiela) nailed. Pegged as it were. Spiked like a flounder. OK enough.)


(that's what we call a "nested parenthetical" for anyone who cares. TYLERS. YOU GUYS ARE HORRIBLE WITH PARENTHETICALS.)

In reply to by Manthong