Hundreds of Billions in Gold and Cash are Quietly Disappearing
The comments below are an edited and abridged synopsis of an article by Tyler Durden
At the same time as central banks are injecting $100 billion each month in electronic money to crush volatility and ramp markets, a similar amount in hard physical currency and precious metals is literally disappearing.
Take gold: Goldman Sachs recently laid out the case for gold. One reason is that the same central banks that are printing money are also buying gold, and as a result of geopolitical uncertainty, there has been a record surge in gold demand by central banks themselves.
Goldman also pointed out that ,over the past three years, there have been tens of billions in gold flows that have mysteriously disappeared from the official record, yet which are taking place behind the scenes as the world’s top 1% brace for a major shock. And it’s not just gold that is disappearing; so is the world’s cash.
Meanwhile, with a financial crisis looming, for some countries, such as New Zealand, making money disappear is becoming a national pastime.
Around a third of New Zealand’s new bank notes headed overseas in 2017, up from 6% four years earlier. That happened around the time that tourism became the country’s main export money-spinner, leading officials to speculate on the role played by currency exchanges, especially in Asia.
The trail mostly ran cold after that. The bank could only identify the whereabouts of around 25% of New Zealand’s cash. The rest, about 75%, has disappeared.
“Our sense is that we’re in the same boat as a lot of other central banks out there,” said Christian Hawkesby, assistant governor at the RBNZ. “We can’t fully explain why holdings of cash are rising and where they are going.”