There seems to be a growing trend happening in Europe, one which has previously happened, namely gold bullion confiscation from private owners as a part of a strategy to offset government debt. Deutsche Bank, one of the largest and most respected banks in Europe, recently wrote in their Daily Metals Outlook that the confiscation of gold bullion makes logical sense as the next step that countries in the European Union should take to manage their debt challenges. Deutsche Bank recently wrote this.
Although gold market operators are currently pre-occupied with the prospect of the Swiss National Bank finding itself obliged by referendum to buy large quantities of bullion, another central bank raised the same possibly yesterday: the ECB. As odd as it sounds, given the contentious internal debate this year over asset purchases in general, ECB board member Yves Mersch, reminded journalist that the Bank could in theory buy any assets within a QE program. This could mean government debt, equities, ETF’s, or even gold. Indeed, within an effective asset purchase program it matters not so much with the asset is, then who the seller is. Given that the euro zone banking system still appears to be a bottleneck in the monetary transmission mechanism, there might be some wisdom in bypassing it. Banks do not hold gold. However this ‘theoretical’ possibility would quickly run into practical constraints, not least the volume limitations and the problem of having to quick winners and losers.
This idea of gold purchases has merit because among the possible sellers there is significant in gold that is held in private households especially in countries like Germany. A program that would target these holdings would liberate dormant liquidity being held in gold. The thought is this would free up a tremendous amount of capital to inject into the system and suffice the debt structure.
Making it simple, all the world central banks would have to do is “liberate dormant liquidity”, which is gold that is held by private households making that gold illegal to hold, causing a gold confiscation in Europe just like we saw here in 1933 under FDR.
The gold recall trend keeps snowballing. Since this announcement other countries have followed suit and made similar announcements. Anyone who owns physical gold or is thinking of purchasing cannot ignore this trend. Other countries fear that they might be also at risk for this gold bullion confiscation.
Reports are surfacing now. Austria is taking steps to recall its gold stored in overseas. The Austrian state audit court says the central bank should address concentration risk of storing 80% of its gold reserves outside of the country. Austria’s gold is mainly stored in the United Kingdom with some of it also in Switzerland.
Belgium announced it is looking at repatriating their reserves. Some of Belgium’s gold is in Germany with most of Belgian gold is stored in the United Kingdom, Canada, and Switzerland.
Countries believe now a global gold recall, otherwise known as a gold confiscation, is of vital concern and not to be taken lightly. Many economists believe that this plays a historical role in the master plan to reform government debt in countries and bring stability to their currencies