Before we start with some commentary around the IMF downgrade to Australian GDP last week, let’s deal with something equally as meaningful to investors.
In our last note, we tried to explain the US fed’s solution to a frozen short term lending market, to send fresh money, out of thin air, into said market. And 5 weeks later, they’re still doing it! Hard to get an accurate number on the amount, north of USD250 billion, so far.
But do not call it QE, The Fed said.
Then last week, The said Fed decides to “expand its balance sheet” to buy Govt. debt to the tune of (for now) USD60 Billion per month, out of thin air.
But don’t call this QE, or debt monetization or any other nonsense, the Fed said. “It’s not that”.
Got that? Whatever you think you’ve seen before as far as “temporary” emergency stimulus goes, it’s not that. Definitely not that.
It’s now LSAPP, Large Scale Asset Purchase Program. Got anything you want to sell?
Meanwhile, away from the la-la land of central bank largesse, the reality of the global economic outlook continues to deteriorate, by any metric.
Despite central banks thinking more of the same will work, it has been demonstrated across all Industrialised countries that it won’t.
The massive debt and derivative piles get bigger and riskier by day. Reform has never been an option.
So, they’ll print, and print and print until they wake the dead and change is forced upon markets.
Meanwhile, the noise for Australia to join the QE circus just got a whole lot louder.
The IMF’s World Economic Outlook just cut its growth forecast for the Australian economy from 2.1 per cent to 1.7 per cent — a level below the government’s and the Reserve Bank’s forecasts of about 2.25 per cent.
Looks like this.
And the debt, still looks like this:
The way these winds are blowing and the way your portfolio is positioned for future economic changes is such that, it’s better to be early, than a minute too late!!
Share value/revenue performance of Banks and other financials in long term money printers like Europe and Japan have been a disaster.
Australian investors in these assets should heed the warning wisely.
However, in most Aussie equity ETF’s, Index Funds or Industry Fund Funds, you’ll have no choice. You can still enjoy what’s left of “the dividend”.
One should really seek out assets and currencies that will prove to be some insulation against a weakening domestic outlook.
In the end, most currencies appear to be in a race to the bottom anyway.
Gold, however currently maligned, will help stabilise portfolios with even a small allocation.
Small, for most, is what it is.
Eric Sprott, from Sprott Asset Management recently penned that in North America, the % of investable assets allocated to Gold is between 0.3 and 0.5%.
The multi-decade average is around 1.5%. With a background of shrinking supply, it’s hard to see a resolution, except to create more paper “futures” to manage the price, HA!
“The world” continues its movement out of US Treasuries! Is this below what’s causing “not QE”?
We’ll leave the rest of the gold commentary to The Dutch Central Bank, courtesy of ZH.
It’s not just “tinfoil blogs” who (for the past 11 years) have been warning that a monetary reset is inevitable and the only viable fallback option once trust and faith in fiat is lost, is a gold standard (something which even Mark Carney hinted at recently): central banks are joining the doom parade now too.
An article published by the De Nederlandsche Bank (DNB), or Dutch Central Bank, has shocked many with its claim that “if the system collapses, the gold stock can serve as a basis to build it up again.Gold bolsters confidence in the stability of the central bank’s balance sheet and creates a sense of security.”
While gloomy predictions of a monetary reset are hardly new, they have traditionally been relegated to the fringe of mainstream financial thought – after all, as Mario Draghi stated on several occasions in recent years, the mere contemplation of a “doomsday scenario” is enough to create the self-fulfilling prophecy which materializes it. As such, it is stunning to see a mainstream financial institution open up about the superior value of limited supply, non-fiat, sound moneyassets. It is also hypocritical given the diametrically opposed Keynesian practices regularly engaged in by central banks and official institutions worldwide: after all, just a few months back, the IMF published a paper bashing Germany’s adoption of the gold standard in the 1870s as the catalyst for instability in the global monetary system.
Fast forward to today, when the Dutch Central Bank is admitting not only did gold not destabilize the monetary system, but it will be its only saviour when everything crashes.
The article, titled “DNB’s Gold Stock” states:
“A bar of gold retains its value, even in times of crisis. This makes it the opposite of “shares, bonds and other securities” all of which have inherent risk and prices can go down.
According to the IMF’s latest data, the DNB holds 615 tons (15,000 bars) of gold mainly in Amsterdam, with other stores in the U.K. and North America; the value of this gold reserve is over €6 billion ($6.62 billion). Calling gold the “trust anchor,” the article details briefly why the hard asset is so important to wealth building and the global economy, claiming: “Gold is… the trust anchor for the financial system. If the whole system collapses, the gold stock provides a collateral to start over. Gold gives confidence in the power of the central bank’s balance sheet.”
Why this sudden admission of what goldbugs have been saying for years? Perhaps it has to do with the fact that on October 7, the bank announced it would soon be moving a large part of its gold reserves to “the new DNB CashCenterat military premises in Zeist.”
Almostas if the Netherlands is preparing for the grand reset, and is moving its most valuable asset to a “military” installation just for that purpose.
As bitcoin.com tongue-in-cheek points out, “DNB is no stranger to playing along with the Keynesian, inflationary games of the global monetary system. A system which, according to some, is now more a Ponzi scheme based on force and blind faith than sound economic principle. That notwithstanding, the centralized financial powers of the world know the real score, and that’s why hard assets like gold are hoarded and locked down while every day, individual residents of these geopolitical jurisdictions are encouraged to spend and spend, going further into debt to prop up ultimately unsound national economies.”
It is hardly a coincidence that in its preparation for monetary doomsday, the Deutsch Central Bank is also set to begin cracking down on crypto exchanges and wallets, stating that “firms offering services for the exchange between cryptos and regular money, and crypto wallet providers must register with De Nederlandsche Bank.”
While the push for greater KYC/AML transparency is a growing global trend, and is hardly surprising in a world in which trillions in assets reside in “tax-evading” offshore jurisdiction, the remarkable aspect of this latest crackdown against crypto – which many see as a modern, more efficient form of “gold” – is the fact that invasive regulations and restrictions by central banks can be seen as yet another means of stockpiling precious assets. This time, not gold bars, but bitcoin and crypto.
As for the timing of the “great monetary reset”, which other central banks have already quietly hinted at themselves amid massive repatriation of physical gold from the New York Fed to various European central banks such as Germany and Austria, we are confident that the trust-keepers of the current establishment – such as other central banks and the IMF – will be kind enough to provide ample advance notice to the citizens of the “developed” world to exchange their fiat into hard assets. Or, then again, perhaps not.
And, well done if you got this far, how many tons does Australia have? Not many, if any, check it!
2. Where is the Reserve Bank’s gold stored?
Almost the entirety of the RBA’s physical gold holdings (99.9 per cent) is stored in the United Kingdom at the Bank of England (BoE). The BoE holds the RBA’s gold as bailee; legal and beneficial title to the gold remains with the RBA. A very small amount of gold is stored at the Reserve Bank’s head office in Sydney.
https://www.rba.gov.au/qa/gold-holding.html
平和あれ。
Japanese 
English 