Koos Jansen
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Koos Jansen
Posted on 26 Nov 2014 by

Analysis Dutch Gold Repatriation: Why, How And When

In the past century nations form across the globe stored their gold at the Federal Reserve Bank of New York (FRBNY) for numerous reasons; (i) during World War II Germany was confiscating as much gold as they could from nations they occupied, surrounding nations anticipated by shipping their gold to the US; (ii) after World War II there was the threat of the USSR to seize sovereign gold reserves in the Cold War; (iii) under the Bretton Woods System (1944 -1971) it was agreed the US dollar was the world reserve currency, backed by gold. Here for it was convenient to store gold in New York for trade settlement, additionally dollars which were converted into gold were credited to FRBNY foreign gold accounts; (iiii) after the Bretton Woods system, when gold was officially removed from the monetary system, gold was often sold or leased by central banks, facilitated from their FRBNY accounts.

In the aftermath of the financial meltdown in 2008 central banks again realized the importance of gold as an anchor in the monetary system; European central banks stopped selling gold; Asian and South-American central banks increased official purchases, and central banks from all continents began to worry if storing gold abroad was wise when the global financial crisis evolved.

To illustrate this trend please read the next quote from Edmund Moy, former Director of the United States Mint (Fort Knox), published June 13, 2014:

Finally, more countries are repatriating their gold. For them, an audit is not enough. They would like their gold back. Azerbaijan, Ecuador, Iran, Libya, Mexico, Romania and Venezuela is a short list of countries that have requests into their custodians to transfer some or all their gold back to their countries.

Requests are also submitted at the FRBNY to kindly return the gold held in foreign accounts. There are rumors the US has sold a portion of this gold to underpin the US dollar hegemony in recent decades. The repatriation of 122.5 tonnes Dutch gold from New York, that recently was made publiccould be explained along these lines. In any case, the Dutch are losing trust in the US as their custodian, I can see no other reason for them to repatriate. Wether this lack of trust is well-founded time will tell.

After the Dutch repatriation stunt was official, a theory-bomb exploded in the blogosphere about why, how and when the Dutch central bank (DNB) repatriated 122.5 tonnes from New York, while the German central bank (De Bundesbank, or BuBa) has been trying to repatriate 300 tonnes from New York since 2012 – but officially got back a mere 5 tonnes in 2013.

Bloomberg published an article on June 23, 2014, that tricked many to believe BuBa had stopped repatriating gold from the US. However, as I wrote on September 7, 2014, the article was misleading, BuBa never ceased its repatriation schedule. 

One theory the Dutch are more successful in repatriating gold from the US, is because DNB is more willing to get it back than BuBa. There has been some public pressure in The Netherlands about repatriating gold, but it has been very little in my opinion; the initiative to repatriate came from DNB. In Germany the repatriation was pushed by the public campaign Repatriate Our Gold. Peter Boehringer, one of the founders of Repatriate Our Gold, told me BuBa was forced to start repatriating in 2012 by the campaign, but is actually slowing down the process, for whatever political reason. Keep in mind gold is a very political commodity. BuBa’s unwillingness is confirmed by their argument that repatriating takes a lot of time, they’ve acted as if it’s not possible to transport hundreds of tonnes across the Atlantic in a few months.

Nevertheless, I’ve written on September 7 the German repatriation was accelerating from the 5 tonnes they got back in 2013, to 59.5 tonnes in July 2014. Every month the FRBNY discloses how much Earmarked gold (the total of all foreign accounts) they store in Manhattan. As I wasn’t aware of any other country repatriating, I figured the 54.5 tonnes drop in Earmarked gold from January to July 2014 had to be gold heading for Germany.

The latest data suggests 77 tonnes have left the FRBNY vaults from January to September.

FRBNY foreign gold deposits table September 2014

From another angle:

FRBNY foreign gold deposits
We know for sure the 5 tonnes drop in 2013 was because of Germany.

Of course the big question is, when did DNB start repatriating? This information would provide more insight in how much the Germans got back year to date, if any.

Because the Dutch repatriation partially took place in my back yard, DNB headquarters is a few blocks form where I live, it led me to do some field work. What came out must be seen as speculation based on little official information from DNB, but more from second hand sources at DNB.

I’ve been told a DNB delegation visited the FRBNY in 2013 to audit the Dutch gold, they found nothing was missing. This summer the preparations started for repatriating 122.5 tonnes, after which in October and November the gold was swiftly transported in multiple batches by airplane to The Netherlands. Eventually it was delivered in Amsterdam by armored trucks.   

This would imply all FRBNY withdrawals before October could be from Germany, or any other country for that matter, and the Dutch withdrawals would only show up in October and November FRBNY data. So we’ll have to wait a few weeks before we know for sure.

UPDATE December 29, 2014: The Netherlands could not have repatriated 122.5 tonnes in October and November, data from the FRBNY has just revealed.

Connecting The Dots

I found some more clues from DNB that tell me it they began to think about repatriating somewhere in 2012.

Early 2012: Dutch TV show Nieuwsuur covered Dutch official gold reserves – which were predominantly stored at the FRBNY. I edited a segment from this video and added subtitles, watch the video below. We can see Jim Rickards, Willem Middelkoop and Ewout Irrgang (Dutch politician) expressing their opinions to repatriate Dutch gold from the US. Governor of DNB, Klaas Knot, stated there was no reason for that. However, listen to Knot at 0:19:

We are regularly confronted with extraterritorial workings of laws from the US, mostly these laws are not happily received in Europe.

A few things are remarkable;

(i) Knot states: “mostly these laws are not happily received in Europe”. Suggesting there was a European awareness, in January 2012, of the threat the US could confiscate foreign gold reserves held at the FRBNY.

(ii) Rickards notes:

Countries such as The Netherlands, they should get their gold back, store it securely and than they are in a position to play in a new monetary system.  

(iii) Watch the sidewalk in front of DNB’s main entrance at 0:09 (and on the picture below).

Screen Shot 2014-11-26 at 5.51.43 PM
DNB 2012 westside (headquarters address: Westeinde 1, Amsterdam, The Netherlands)

Mid 2012: BuBa announced its first schedule to repatriate 150 tonnes from New York.

Late 2012: DNB reinforced its headquarters. A new security barrier was constructed around the building. DNB confirmed to me this was done to prevent any cars or trucks from crashing the building. Let’s have a look at some pictures of before and after the reinforcement.

This is DNB on the map, the red line corresponds with the sidewalk shown on the picture above:

DNB Map

First DNB before, in 2010. Pictures from Google street view.

Screen Shot 2014-11-22 at 11.09.40 PM
DNB 2010, westside. Before the new security barrier, we can only see some planters along the building.
Screen Shot 2014-11-22 at 11.09.08 PM
DNB corner 2010, northside and westside. Before the new security barrier.
Screen Shot 2014-11-22 at 11.03.01 PM
DNB corner 2010, eastside and northside. Before the new security barrier.

And now DNB after, in 2014. Pictures from Google street view and from myself taken on November 24, 2014.

Screen Shot 2014-11-22 at 11.14.34 PM
DNB westside barricaded with heavy planters 2014.
DNB westside barricaded with heavy planters 2014.
DNB westside barricaded with heavy planters November 24, 2014.
IMG_7151
DNB westside. Where it’s not barricaded with planters, there is chunky art. November 24, 2014.
IMG_7131
DNB westside barricaded with rocks November 24, 2014.
IMG_7146
DNB northside and westside barricaded with rocks November 24, 2014.
Screen Shot 2014-11-22 at 11.08.05 PM
DNB northside barricaded with rocks 2014.
Screen Shot 2014-11-22 at 11.03.41 PM
DNB eastside and northside barricaded with rocks 2014.
IMG_7141
DNB eastside barricaded with rocks November 24, 2014.

I think DNB strengthened its fortress in late 2012 because it knew it was going to repatriate and store a lot more gold in the near future. In hindsight Knot was lying in the interview when he was asked if he fully trusted the US as the custodian for the Dutch gold. Of course he couldn’t be honest in public, but the fact he said “…mostly these laws are not happily received in Europe”, and shortly hereafter Germany started repatriating and he began to reinforce his compound, tells me something was brewing.

Jeroen Dijsselbloem said in December 2012:

DNB’s history exposes that in situations where financial assets fall sharply in value, the public and the markets remain confident in gold.

But there’s more. Dutch youth TV show Het Klokhuis visited DNB in March 2014:

For selling official gold reserves there are stringent rules agreed with other countries, to manage the value of gold.

DNB tends to be very honest towards children.

Quoting DNB from their own Youtube channel:

Gold, A Magical Metal

Screen Shot 2014-11-24 at 2.25.14 PM

 

Koos Jansen
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  • http://www.tuks.nl/ Arend Lammertink

    Very interesting interview with Klaas Knot, especially considering the fact that he refers to “that scenario”, which would be the scenario explained by Middelkoop, essentially a return to the gold standard in the US, which may involve the confiscation of foreign gold in the US. Now when you start repatriating your gold based on this information, then you would also at least think about ways how to return to a goldstandard in your own country.

    You would consider “what if?” scenario’s, so to speak, just like the Dutch government (and the DNB) took preparations for a return to the guilder, should that be necessary, in close cooperation with Germany, as revealed last week by former FM De Jager, which was later (to a certain degree) confirmed by FM Dijsselbloem.

    Of course, the timing of the news about the repatriation and that of the existence of an EurExit scenario in NL and DE only strengthens the idea that there is a connection between the repatriation effort and the possibility of returning to a gold standard, be it via a gold back guilder, Deutschmark or some kind of “Nordic Euro”.

  • Sven

    Great work Koos.

  • Joshua Roberts

    build a moat and put up Kanji warning signs

    • KoosJansen

      DNB southside. Moat and docking facility (just in case of traffic jams).

      • jwr_47

        No protection against submarine visitors? No nets?
        Didn’t they learn from the Scapa Flow event (14. Oktober 1939)?

        ;-))

  • Troy Ounce

    Good thinking, Koos.

  • jwr_47

    Many years ago a foreseeing Dutch government already had prepared the “emergency law” (which in emergency cases merely needs to be “activated”) for confiscation of any Dutch gold (even the gold covered tungsten alloys) and “foreign capital of citizens”:

    Hoofdstuk XII. Financieel verkeer met het buitenland –

    Artikel 26 [Treedt in werking op een nader te bepalen tijdstip]Onze Minister is bevoegd – zo nodig in afwijking van andere
    wettelijke regelingen – voorschriften te geven ten aanzien van
    de financiële betrekkingen met het buitenland, alsmede ten
    aanzien van het vorderen van goud en munten, fijn goud, alliages
    van goud (onbewerkt of halffabrikaat) en buitenlandse activa van
    ingezetenen.

  • Guy Christopher

    Whether the referendum passes or not, it is causing a lot of people
    to talk about gold who have not given gold much thought before. And this
    debate is convincing quite a few people of the foolish and destructive
    path the Swiss government has taken. Without doubt, it has brought
    many to make a personal decision to buy their own gold…..as James Turk
    has said, to be their own central bankers.

    If it passes, the Swiss would be forced to buy many tonnes of gold over the
    next few years. If it doesn’t pass, individuals and financial companies
    will be adding to their gold positions in numbers that won’t
    necessarily equal that same tonnage, but which will certainly put dents all
    around in gold stocks for sale. From the projected, estimated voting
    trends for Sunday’s referendum, we know that 38% of Swiss voters
    actually see the value of owning gold, and another 15% are studying the
    question. Importantly, that 15% has not yet been convinced that the
    Swiss government knows what it’s doing where gold and money are
    concerned, or else, they would be solidly in the ‘no’ camp. That’s 53%
    of the Swiss population showing they have some serious doubts about
    Swiss monetary policy. And 53% of Swiss residents who are potentially
    gold buyers. So whether that gold is sopped up by the central bank or
    by individuals and financial concerns, Switzerland has a huge percentage
    of people showing an interest in gold. And they won’t drop that
    interest in gold just because their fellow citizens vote ‘no.’

    I doubt 2 of every 100 citizens in the U-S even know about this debate
    ongoing in Switzerland, since the lapdog, bought-and-paid-for
    state-owned media in the U-S continues its biased, unprofessional,
    cowardly, ignorant anti-gold fervor, but the subject has not escaped
    Europeans. Suddenly, the ‘yes’ camp has had to deal with the Dutch
    repatriation of 122 tonnes, made public in the past few days. And a day
    or so ago, a major poltiical party in France has made demands that
    French gold be brought back to France. And Europe is aware that
    industrial powerhouse Germany has been impotent and feckless in
    retrieving its gold from the U-S and elsewhere, leaving clear evidence
    that gold is long gone. Europeans are aware Russia and China are
    gobbling up gold like no tomorrow. If I were a Swiss citizen, I’d be
    paying close attention to being left behind and out in the cold.

    So, I wouldn’t write off Switzerland just yet. As they say back in my home
    state in the U-S, there are two things kids learn before entering
    kindergarten: Always incorporate before you cash that winning lottery
    ticket, and always lie to pollsters.

  • lepax

    I ran across this note from I believe 2002

    I may be relevant to the DBN action:

    The report ( RBC’s John Embry) takes a potshot at competitor Deutsche Bank as a culprit in the suppression mechanism: “There are strong rumors that Deutschebank has borrowed an enormous amount of gold (more than $10 billion worth) from the Bundesbank over the years to facilitate the carry trade, producer hedging, etc. and it is becoming apparent that there is no way they will be able to pay it back. Perhaps, to make good on their gold loans, they will reimburse the Bundesbank with stocks and bonds and Mr. Welteke [Bundesbank boss] is readying the German public for this with his statements.”

    ($10b @ $350 = 28,571,429 oz = 888.9 tons)

  • DameEdnasPossum

    Great work Koos. Excellent hypothesis. Highly legitimate and justifiable. This just goes to show that the pieces of the jigsaw are all readily available to those willing to open their minds.

    I for one am not that bithered that the Swiss referendum failed as it keeps the window of opportunity open for longer for the little guys to increase their stack of precious metals.

    I am amazed though by the number of ‘bullion trolls’ on other sites doing their utmost to descredit the merit of protecting oneself with bullion.

    It is important that we do not lose faith and that we are not discouraged…and Koos, many people have you and other similar advocates to thank for keeping us informed.

    Thank you.

    • KoosJansen

      Thanks for your encouraging words.

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