SMM: the Polish central bank is shipping back 100 tons of gold from the London vault to China. The move turned out to be painstaking, and foreign media pointed out that the 100 tons of gold had not been fully shipped home until eight times. Looking back over the years, the process of cash shipments by other central banks has also been fraught with resistance. Why are central banks taking so much trouble? We might as well review the "gold" of the Polish Central Bank first.
01. The arduous journey of "gold"
In the early hours of November 22, four Jeffers high-tech armored trucks escorted by SWAT officers set off from a secret base in northwest London to the edge of a parked Boeing 747 freighter. Staff carefully unloaded the "cargo" of the four trucks and carried them into the cabin. This is a flight to Poland, there are no other passengers on board, there are and only these 20 heavy wooden cases. Paul Holt, head of Jeffries Europe, said:
"the goods are very important and must be carried out in secret. This is the eighth time that it has been transferred late at night, and it is also the last time. "
"this is the largest amount of gold transportation between banks in the world."
02. The tide of freight has also hit the "dam", but the trend has become a foregone conclusion.
In fact, the wave of gold shipments from the Federal Reserve and the Bank of England has intensified in recent years. Since the mid-1940s, the Federal Reserve and the Bank of England (Bank of England) have kept gold for at least 60 countries and international organizations around the world, accounting for nearly 1/4 of the world's gold reserves, but that proportion is now declining.
The tide of "gold worship" that spread to Europe
Germany, France, Turkey, Italy, Romania, Switzerland, Austria, Belgium, Hungary, Venezuela and other countries have also returned or announced that they will return gold. Poland is already the 13th country to return overseas gold. Ole Hansen, commodities analyst at Shengbao Bank, said bluntly that the return of gold by the Polish central bank could be the beginning of a new trend in Europe.
A few days after the Polish Central Bank announced the return of gold, Slovakia also announced the return of gold reserves from the Bank of England. King 10 also reported earlier that not only the Polish Central Bank, but also the Bundesbank, the Bank of Finland, the Bank of France, the Bank of Sweden, the Hungarian Central Bank and so on are increasing their holdings of central bank gold.
A long and obstructed journey of money
It seems surprising to many that the Polish central bank has worked so hard to ship gold back home. In fact, the Polish central bank is not alone, other central banks are also "blocked and long", frustrated.
The Bank of France began announcing the return of gold in 1966, the first country in the world to announce the return of gold from the Federal Reserve. Although the return of gold has not been interrupted for six decades, sources say some of the gold in France is still deposited with the Federal Reserve.
Germany is by far the country that has shipped back the most gold from the Federal Reserve. It took the Bundesbank four and a half years to recall 674 tonnes of gold from New York and Paris, respectively. And this speed is already ahead of the original progress. At the time of delivery of the last shipment of gold, it was once rejected by the Federal Reserve on the grounds that it had no intention to do so.
In January, Venezuela offered to retrieve 14 tons of gold deposited with the Bank of England, but the Bank of England said it would "withhold" the gold and reject Venezuela's application on the grounds of anti-money laundering.
The Fed's wishful thinking may fail
Of course, the Fed's repeated obstructions are not hard to understand-the Fed is trying to maintain its position as the dollar by covering up gold around the world.
03. Behind the ordeal revolves around this ultimate goal
Why, despite the difficulties and dangers, central banks are still struggling to compete with time to ship gold back to China from abroad?
We might as well take a look at the reasons for the German players of the previous gold team. The Bundesbank noted that there were three main reasons for the return of gold reserves: storage efficiency, safety and liquidity.
Polish central bank officials said that the increase in gold holdings is mainly due to two considerations: one is to hedge geopolitical risks, and the other is that gold can act as a buffer for the economy and a strong pillar of government credibility.
As for Slovakia, a new member of the gold team, it also pointed out that the recall of gold reserves is to increase the central bank's holdings of safe haven assets in order to improve the safety of its reserves.
Former Slovak Prime Minister Robert Fico (Robert Fico) pointed out: even if the Munich Agreement is reached, the most trusted international allies may betray, and the lesson of history has taught us that our allies cannot be trusted. Gold, on the other hand, is the most trusted friend.
To sum up, the most fundamental reason behind the central bank's return of gold is risk aversion-to hedge against dollar risk and to counter macroeconomic risk.
First, the return of gold by central banks is an important move in the de-dollarization of countries around the world. The move appears to be a public declaration of mistrust of the dollar, as countries scramble to return gold to regain control and custody of gold reserves, enrich the types of foreign exchange reserves and prevent the collapse of the dollar-dominated global monetary credit system.
Claudio Borrio, an economist at the Bank of China, has said that the existing international monetary and financial system dominated by the US dollar cannot avoid and defuse the risk of financial imbalances and amplify the weaknesses of various countries. At this point, the global monetary and financial system dominated by the dollar may collapse.
Second, gold, as a typical safe haven asset, the global economic situation tends to be weak and geopolitical uncertainty is greater in the short term, and increasing the central bank's holdings of gold reserves will effectively hedge the risk of dollar fluctuations. In an environment of negative interest rates, gold has a unique advantage.
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