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January
27
2014

The Next System
belangp

The real intent of the video was not to suggest that the Euro would be taking the dollar's place as the world currency but rather the Euro system architecture would be adopted by many major world trading blocks. The Euro experiment was an attempt to weaken the dollar and show the rest of the world how currencies could be structured to be strong in gold without being exchangeable in gold. And that experiment was successful. Despite the current disaster that is the European economy as a result of tying a bunch of weak states to a bunch of strong states, the Euro is still quite strong compared to the dollar. The Chinese have noted this. The Russians have noted this. I believe both are getting ready to emulate this.

Yes, you are correct that Germany does not have as much gold in custody as they show on their books; however they still have title. The slow pace of repatriation is because of the years of leasing operations which resulted in the gold becoming encumbered. They are getting slow delivery back with bars that have different serial numbers than those deposited in the FED. This is a sign that the gold is coming from the mines. Ultimately, if Germany does not get their gold back then they will most likely hold title to the mines that engaged in forward selling.

Europe is content allowing the new world to unfold slowly. It's taken decades to get to where we are now and what they've done is proving to be successful. The dollar is losing its world reserve status. They publicly withdrew political support from it in 1999 with their Washington Agreement. In that agreement they stated they would not be continuing to add new gold leases. Last year they went a step further and started calling in the gold. I think things will continue to progress toward a world economic system where gold will play a major role. There will be many major players, but none of them supremely dominant.

 

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