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Another U.S. precious metals miner goes foreign

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 By Michael Miller

05/15/2018  12:47PM

ARE US DOLLARS AND GOLD CLOSELY RELATED? Turkey is making a statement.

Turkish Gold Imports Triple As Central Bank Diversifies Out Of Dollars
Turkish gold imports surged due to a sharp increase in investment demand as well as renewed Central bank purchases. Turkey added 86 metric tons to its official holdings in the last seven months of 2017.

According to the 2018 World Gold Survey, Turkish official gold holdings reached a new record high of 565 metric tons (mt) last year as the government decided to replace a significant amount of its Dollar reserves with gold.

Turkish gold imports more than tripled from 106 mt in 2016 to 361 mt in 2017. Again, the large increase in Turkish gold imports was due to a 60% increase in investment demand and the 86 mt purchase by the Central bank.

What is quite interesting about the increase in Turkish gold demand and imports is how it compares to the United States. In 2017, Turkey imported 361 mt of gold versus 255 mt for the United States. Thus, Turkey, whose population is one-quarter of the United States, imported 100+ mt more gold. Look at the major foreign holders of U.S. Treasury securities, Turkey has been liquidating its Dollar holdings by $16 billion since its peak in October 2017.

Russia has also been liquidating U.S. Treasuries by approximately $11 billion since its peak in November 2017. However, Russia wasn’t selling U.S. treasuries to purchase gold; rather they were diversifying out of Dollars and into IMF Bonds.

While there are countless reasons why Russia is adding gold to its official holdings, the most important reason is quite simply, because IT CAN. The majority of countries is running massive trade and balance account deficits and cannot purchase gold. Russia is one of the few countries that export a great deal more oil than it uses domestically which is part of the reason it enjoyed a $115 billion trade surplus last year.

U.S. Government could print money to purchase gold. There are no western central banks buying gold. They just can’t. Most of the Central Bank sold into the market has come from the IMF and western central banks. Second, for a western central bank to start purchasing gold, it would be seen as a huge red flag to western fiat currencies.

Gold is a barometer for the U.S. Dollar. If the U.S. Government started printing money to buy gold, think about how that would not only impact the price but market sentiment. Western central banks will continue to liquidate gold until the financial markets and the fiat monetary system disintegrate. When more countries like Turkey add to their gold reserves, it’s a clear sign that all is not well in the global financial markets.
World Gold Council Edit.
May 14, 2018
 By Michael Miller

12/07/2017  2:03PM

This date stands strong with me for two reasons: Pearl Harbor and my father’s birthday, December 7, 1906. Now it also stands with September 11 as 9/11, as infamous days of terror.

The Japanese, with few natural resources, sought to copy the pattern of European colonialism in Asia. The Japanese military faced a particular tactical problem in that certain critical raw materials — especially oil and rubber were not available in Japan or their colonies. The intensification of Chinese resistance to the pressure of the Japanese military drew Japan into a draining war in the vast reaches of China proper. Japan was not militarily or economically powerful enough to fight a long war against the United States, and the Japanese military knew this. Its attack on Pearl Harbor was a tremendous gamble.

Our country and today my state home, California, must reform its understanding of our own natural resources. Our public service industries lead the nation in economic and scientific ignorance regarding its value and development. Let’s begin meaningful reformation today.
 By Michael Miller

10/19/2017  8:59AM

Scotiabank will sell its gold trading unit following a scandal involving a US refinery and smuggled gold from South America.

The Canadian bank’s ScotiaMocatta business is one of London’s main gold-trading banks, and was acquired by Scotiabank almost two decades ago., Chinese buyers are the key targets of the sale, which is being led by JPMorgan. What prompted the sale was Scotiabank’s lending to Elemetal, a precious metal refinery in Dallas.

Earlier this year, US prosecutors accused workers at NTR Metals, a subsidiary of Elemetal, of a money-laundering scheme using “billions of dollars of criminally derived gold,” mostly from Peru: “knowingly conspired to purchase gold with the intent to promote the carrying on of organized criminal activity, including illegal gold mining, gold smuggling and the entry of goods into the US by false means and statements to US Customs, and narcotics trafficking.”

Of course the whole issue has layers of responsible entities downstream from the bank. NTR Metals is said to have imported more than $3.6 billion worth of gold from Latin America between 2012 and 2015. Scotiabank and ScotiaMocatta have not been accused of any wrongdoing.
Scotiabank has been seeking a buyer for the unit for up to a year, and is likely to shrink the business if a sale is not completed. Scotiabank has the biggest foreign presence of any Canadian bank, and is focusing its international strategy on the Pacific Alliance, a Latin American trade bloc comprised of Mexico, Peru, Chile and Colombia.

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