China's Demand for Gold Has Trapped The West's Central Banks

[Peter Presland]

Riffing off of the famous line from Jaws, I'm going to need a bigger brain, AND listen to it again.

Peter, if Germany can't get their physical gold from the US, how can China keep accumulating it? I know, listen to it again. And how did the US get so short on gold?

It does repay listening to again carefully - and yes, it does answer the above questions.

Short answer to why Germany can't have it's gold back: It's all been leased to bullion banks and others who have sold it as good members-in-standing of a 30+ year gold price suppression program. Where has it gone (the physical stuff)? - China, India and points East.

Paper promises are pretty much all that's left - a bit of an exaggeration maybe but (barring the wild-card of 'black-gold' on which DG is something of an expert) the Fed and the major bullion banks certainly have vastly greater physical gold obligations than physical gold in their vaults to meet them.

Why go to such lengths to keep the price down? to maintain the notional value of fiat currency

Here's a hilarious satire on the German gold repatriation debacle

Bottom line: The Fed may still effectively control the Dollar markets, but China seems to have more or less cornered the physical gold market and the implications of that are vast.