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Central Banks & Gold

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QUESTION: “You wrote ‘Some central banks appear poised to sell gold to raise money given they have no intent to return to a gold standard.’ Which ones are the sellers and the buyers?”

ANSWER: Those who are thinking about selling are the ones in financial trouble. This is being discussed among Euro members. Germany is not likely and Switzerland is not part of that group. Mainly it is Southern Europe as the North does not wish to bailout any of them anymore.. Of course the gold promoters want to point only to the buyers as if this somehow supports their position. Yet on the other hand, they claim there is no gold in the vaults and that is why it will soar. This is very contradictory. The nations that have been the buyers are typically the ones who abandoned capitalism previously who have the lowest tax rates today and the potential sellers are in the Western block with the highest tax rates killing their economies. They are talking about selling behind the curtain only because they think they still have to pay the bondholders and are desperately trying to save the Euro. Some sell coins out of reserves which are not being replaced. If the traditional Western nations sell gold trying to hold-off the defaults, then that will be long-term bullish removing the threat of sales, Short-term, it may finish the correction.

This is not really a major issue. It is simply part of the trend. It is the timing that must line up to create the rally. The brain-washing gold supporters cannot stand the thought of ever having a down year and are blind to looking at the world financial markets as a whole. Gold cannot rally until everything is lined up. So yes, “some” nations are considering sales because they are politicians that will do anything to keep things as they are. If the Euro failed, look at all the politicians in Brussels that would be out of a job. They will sell gold reserves to retain those jobs. They could care less about their countries – this is all about federalizing Europe. They will sell the gold reserves if they have to. Make no mistake about that. Nigel Farage made that clear on April 17th that these people are all about retaining power. In their own self-interest, they will do whatever it takes to retain the Euro in their mind. They are predominately lawyers – not financial gurus..