Central banks

The Bank of France has partnered with U.S. banking group JPMorgan to expand its range of gold bullion services for central banks.

Where the gold is going is certainly no secret. Whilst the West has not got a clue of the strategic significance of physical gold, the East’s accumulation of the yellow metal continues unabated.

Gold demand was 964.3t in Q3, just 6.2t higher y-o-y. Robust central bank buying and a 13% rise in consumer demand offset large ETF outflows.

Stock markets in Europe and the United States are markedly turning south, although they’re not headed for a crash, at least for the moment. Is this the beginning of a long journey to Hell or just a temporary bump?

Last month we saw imports of gold into Switzerland and then exports to Asia and India. Last month, over 70% of the gold import figures (into Switzerland) came from London and the United States.

The world economy and global stock markets are at the end of the biggest bubble in history. A bubble fuelled by unprecedented stimulus from central banks and governments to prevent the financial system from imploding.

The time of easy gains in markets is now over. With the Fed and other central banks tightening and with the 35 year interest cycle having turned up, the party is over.

In a recently published article, Nouriel Roubini, one of the most trusted economists on the planet, predicts: “By 2020, the conditions will be ripe for a financial crisis, followed by a global recession.” He states ten reasons for his prediction.

The end of an empire is a dramatic but also drawn out event with very few willing to face the facts. As the end is getting closer, denial is at its peak. We can probably figure out how it will end but not quite when. Looking at the facts, the beginning of the end is here.

Hungary’s central bank increased its gold reserves 10-fold, citing the need to improve its holdings’ safety, joining regional peers with relatively high ownership in the European Union’s east.