10 tonnes of gold disappear from FRBNY in December 2014

With repatriation of gold in the picture, especially when China is gobbling up all the physical gold, we need to keep an eye on the gold deposits at the Federal Reserve Bank of New York.

Each month they issue this report of gold deposits at the FRBNY.
http://www.federalreserve.gov/econresdata/releases/intlsumm/forassets20141031.htm

The value of the gold deposit is calculated at value $42.22/troy ounce.

Take an example December 2014: 8170 million USD of earmarked gold.

So you first divide 8170 million USD by $42.22/troy ounce and then you convert it to tonnes. You get 6018 tonnes.

Now we chart it out over two years and we see that people are not deposition gold in the U.S. Instead they are pulling out their gold from the U.S. FRBNY at a very fast pace. I expect this to accelerate till there is no gold left in the U.S. or something breaks in the rehypothecation scheme.

In December 2014, we saw 10 tonnes disappear from the vaults. Which mysteriously coincides with the 10 tonnes that the Netherlands supposedly added in December 2014.

This is what it looked like in the past. If you take a good look, you will notice that gold repatriation typically occurs when there is a recession.

Belgium Housing Bubble Starts to Pop

As I predicted a year ago, it is starting to happen. The declining home sales in 2012 are now starting to have its effects. The Belgium housing bubble shows signs of a pop. In Brasschaat (where I live), I indicated that many houses and especially villas were on sale.

Now the reports are out. We are seeing prices drop more than 20% this year around the Antwerp region. Brasschaat and Schilde were most affected.

Could this be the start of a declining housing market in Belgium, just like we saw in our neighbour country the Netherlands?

Case Study on the Housing Market of Belgium and The Netherlands

With the newly discovered correlation between building permits and housing prices, I wanted to put this correlation into practice more at home. Let’s see how The Netherlands is doing. On Chart 1 we see that since 2006, the amount of building permits has dropped and is continuing to drop.

Chart 1: Building Permits in The Netherlands

A similar case is found in Belgium, where we see that the amount of building permits dropped since the top of 2006 (Chart 2). But the decline isn’t as bad as in The Netherlands. 

Chart 2: Building Permits Belgium

If we then look at the housing prices in Belgium and The Netherlands we do see a lag. 2006 marked the top in building permits, while 2008 marked the top in the housing market index in The Netherlands. This suggests that the correlation is true. 

In Belgium though, the housing market is still rising, while building permits are declining. So something is not right here. Considering that building permits are dropping in Belgium, I expect that the Belgium housing market will go lower in the future.

Chart 3: Housing market in Belgium and The Netherlands

Swiss Gold Repatriation Almost Reality

A year ago, 4 Swiss parliament members launched the “Swiss Gold Initiative” to repatriate their gold to Switzerland. Today, almost one year later we have 90000 supporters for this initiative. Once the 100000 supporters is reached, we are certain that the Swiss National Bank will repatriate their gold holdings. I’m sure those 10000 votes will be reached by March 2013.

So not only the Germans want their 3400 tonnes of gold back, now the Swiss want their gold back.

As of September 2012, the SNB had 55591 million CHF gold (Table 1). That’s 59139 million USD gold or 33.4 million ounces of gold or 1040 tonnes of gold. That’s one third of Germany’s gold and is pretty significant.

The SNB hasn’t said where its gold is and also hasn’t said if it will repatriate their gold all at once, but if they were to repatriate it all at once, it would be almost double the amount that Germany is now repatriating over 7 years: namely 674 tonnes of gold.

Table 1: Swiss National Bank Balance Sheet

Other countries who want their gold back are: Ecuador (26 tonnes), The Netherlands (613 tonnes)