Will The Federal Reserve Be Caught Without Gold in ''Repatriation Rush''?

Gold accumulation is happening at a very astounding rate – and the repatriation of gold by foreign nations, and now states, is setting a tense deadline for the most massive currency war ever seen on a global scale.

A game of musical chairs has begun, and someone will be left standing when the music stops.

Texas has just taken it up a notch, with a high-profile move to keep its gold holdings at home for safe keeping and strong collateral. The state legislature is making moves to allow housing the more than $1 billion investment in bullion gold by UTIMCO (the University of Texas Investment Management Company, whose directors are appointed to represent multiple university systems and other assets.

Texas — long known for cattle, cowboys and oil — could soon be on the map for something much different.

Gold.

State Rep. Giovanni Capriglione asked the Legislature to create a Texas Bullion Depository, where Texas could store its gold, which is now in New York, and where others could keep their precious metals.

[…]

The goal is to create a secure facility that would allow the state to bring home more than $1 billion in gold bars that are owned by the University of Texas Investment Management Co. and are now housed at the Hong Kong and Shanghai Bank in New York. (source)

Texas is just latest in a serious move back towards gold and other “solid” investments. But, symbolically, it signals a shift away from the old line establishment, and a loss of confidence in the fiat petrodollar pumped out by a declining empire.

China’s currency has just been reevaluated for entry into global reserve currency status, signaling enormous changes for the once all-powerful U.S. petrodollar. With China’s rise, it has been stockpiling gold at perhaps the fastest rate ever observed.

Theoretically, China’s gold reserves are swiftly approaching par with the U.S. gold reserves, held by the Federal Reserve.

With the central banks now buying gold… which is quite unique… we haven’t seen that in our lifetimes… they’ve always been sellers of gold and now they’re buyers of gold…

I think there will be a reset of the financial industry…

I think China is being allowed to accumulate gold purposefully by the American government… I believe that the Chinese need to own at least the same amount as the U.S. owns before this reset occurs. I think that there’s some kind of deal that’s being made between all the central banks behind the scenes and that’s why you’re seeing governments accumulating the metal. (source)

Only, everybody knows the gold isn’t there. There are hints and signals as to its whereabouts, but the practical fact remains the the NY Fed isn’t holding what is supposed to, and the Fed will have to obtain the gold before it can return bullion to those for whom it has been safekeeping it.

To compound this issue, China is likely much closer to parity, or at least a significant milestone, than its official holdings would indicate. SGT Report states:

As we note, Bloomberg’s mockingbird journalist Nicholas Larkin recently wrote that if China could obtain 10,000 TONS of gold, it would justify a re-pricing of gold to $64,000 ounce. However, Larkin argues that China has well under 2,000 tons by referencing the nation’s last official report from 2009. Steve and I discuss how it’s far more likely that China already has 10,000 Tons of gold NOW! So… what happens to the gold price once China officially updates its six year old “official” number… huh Bloomberg?!

Essentially, that means a race is on to reclaim gold before it isn’t redeemable, and have something at the table as collateral for its place in the global reserve currency. Though these are enormous moves, the timeframe is one that will not capture the attention of the general public.

Germany, Switzerland, the Netherlands, and numerous other countries in Latin America and the Middle East are all demanding the return of their gold. Which countries will be left holding the bag? And which countries will be at the mercy of the accepted value of the offered reserve currency, perhaps in the form of SDR?

The German’s are demanding that the U.S. return all of the 374 tons of gold held by the Bank of France, and 300 tons of the 1500 tons of bullion held by the New York Federal Reserve.

Some say that Germany is only demanding repatriation of its gold due to internal political pressures, and that no other countries will do so.

But Pimco co-CEO El Erian says:

In the first instance, it could translate into pressures on other countries to also repatriate part of their gold holdings. After all, if you can safely store your gold at home — a big if for some countries — no government would wish to be seen as one of the last to outsource all of this activity to foreign central banks.

German repatriation has taken much longer than anticipated… the Fed calmly says they are accommodating their request at a reasonable pace.

There are even rumors that it is buying gold off the street to meet demands for withdrawal, or that it might have to in the near future.

Some central banks lend out their gold to speculators and gold miners (who borrow the gold to finance mines—basically, a risk-free hedged loan since the borrowed gold can be repaid with newly mined gold, regardless of what happens to the price of gold on the market), which can be a somewhat profitable activity—especially when the alternative is just letting it sit around doing nothing but fluctuating in value with the market price. But, as far as we know, this isn’t something the Bundesbank or the Fed does. (source)

As SHTF reported:

Despite a 2012 decision in Germany to repatriate more than 600 tons of gold being held by the New York Federal Reserve, only 5 tons had actually been transferred across the Atlantic at the start of 2014, with the Bundesbank reassuring the German people that all is well, despite delays in the process.

Was their gold actually there, or have the delays been due to the need to buy back physical gold to meet demands on their ‘call’?

Now Texas wants its gold back, and stands ready to stop accepting bullion deposits of its own for safe keeping.

Before there can be panic, big players are running for the exits.

If all the nations across the world, (and other entities as well) demand return of their gold all at once or in short succession, someone is going to notice that the game is up.

And then what?

Is that how the dollar dies, in a stick-up?

Caught in its own devilish demise…

You can read more from Mac Slavo at his site SHTFplan.com, where this article first appeared.