I wonder how much of that are foreign central banks moving their gold reserves out of the USA... France, The Netherlands and Germany have been moving gold.
Germany moved 111t from New York in 2016, and, afaict, nothing since then. There's still 1236t left.
Italy also keeps over 1000t in New York (no plans for repatriation).
This is effectively outsourcing that process to the banks.
If the Banque de France holds physical in New York and sells it to JPMorgan (nothing moves) and then in Paris buys contract for physical from UBS, there will probably need to be physical gold that moves.
In all likelihood, Swiss gold held by e.g. a Gulf customer might be sold to Paris (nothing moves) and JPMorgan may entice Venezuela to take those contracts on its balance sheet (nothing moves). But if it’s a big trade, the price of delivering physical in Paris (or Genève) will go above spot in New York at which point it’s profitable for JPMorgan to take delivery, load up planes and physically ship gold.
[0] https://www.usagold.com/gold-arbitrage-trade-winds-down-amid...
If you actually loaded gold into shipping containers and obeyed the weight restrictions, all the gold in the world would take up less than 8400 TEU, which would be considered a mid size cargo ship.
However, if you made half the copper disappear, you'd have a big problem.
That'd obviously give the US an immense amount of power, so in exchange the US would agree to make the USD convertible to gold at a fixed rate by other countries (as opposed to e.g. individuals). So the whole point here is that if the US tried to print a whole bunch of money to exploit our 'exorbitant privilege', countries would be able to take their now devaluing USD and exchange into a gold at a stable rate and make a whole bunch of money. So it was intended to be a self correcting system.
The problem is that the US did print a whole bunch of money anyhow, and when France and other countries said 'hey we'd like to convert our USD to gold' we just said 'nah' and defaulted on our obligations, bringing Bretton Woods to an end in 1971. That signaled the beginning of the modern completely fiat economic system, and led to some wild quotes from the time. For instance the Secretary of the Treasury under Nixon (who was president in 71) has a great quote of, 'The dollar is our currency, but your problem.'
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It's critical to understand this history to understand what's happening today with countries increasingly seeking to replace the dollar. Many want something akin to Bretton Woods 2.0, but without any country being given a win button. And that's not so easy to devise!
There was a big thing that happened between the Great Depression and Bretton Woods that's pretty critical to why that system emerged.
That seems like wild thing to agree to. Where can I read more about this?
The hard part is getting countries to agree on one system. Coming up with a good one is easy. You can either do EU style governance where countries vote on policy or go hands off and anchor everything to crypto.
To put it bluntly, America ended WWII with a global nuclear monopoly and then only industrial base on the planet that hadn't been bombed into smithereens. That put it in a unique position to set the terms of the peace. The only party that came out with any comparable leverage was the USSR on account of its massive army and willingness to maintain a wartime economy that would have been untenable in the democracies of the West. (Absent the USSR, it's again unlikely Bretton-Woods would have emerged–the Soviet threat created an incentive to coöperate.)
More than that, the end of WWII saw American complete its then priority of decolonization. That meant there were lots of newly created countries, not quite peacefully but not at the level of violence that usually accompanies new-country formation (with obvious exceptions, e.g. Partition and Israel/Palestine), that could be wooed with riches and ideology.
I think most people would suggest the converse..... that gold prices have doubled over the last three years compared to virtually any stable western currency.
At the risk of certain downvote barrage, this is a solved problem, at least at international settlement scale: use cryptocurrency.
It’s typically flown [1].
[1] https://www.independent.co.uk/news/world/americas/us-politic...
> load up planes and physically ship gold.
they would not load planes, they’d load ships, because it’s much cheaper.
I can tell you from first hand experience that moving high value items isn't as exciting as you'd think.
ULDs are the standardized shipping containers of the sky. You can rent ones that have an inner armored layer and tamper evident seals. They fly as commercial cargo, usually on the flag carrier airline if its a government load. No special rituals or armed guards. Shipments are broken up so the loss of a single aircraft is at most $5 or $10 million.
There are some highly specialized aircraft that transport full loads but they tend to be closer to the supply side, moving bulk gold or diamonds from remote mines for processing.
Cash is the interesting exception (most non-US currency is produced by commercial printers) where a country will send its military to go pick up one big shipment.
“In focussing almost exclusively on gold bars, jewellery, and high-grade recycled gold (over 40% purity), all of which generally travel by air, analysts have tended to disregard the maritime space as a significant arena for illicit gold flows (LBMA, 2022[9]).”
https://www.oecd.org/en/publications/illicit-flows-of-gold-c...
The Hong Kong gold vault stores at the airport, not the harbour:
“ Half of the world’s population, including those of China and India, lives and can be reached within five hours if the metal is loaded on a plane and sent from the Hong Kong airport”
https://www.lbma.org.uk/alchemist/issue-67/gold-vault-at-the...
This makes it sound like emergency delivery of gold is important. “Quick, we need to get 20 tons of gold to Nepal, stat! Go go go go go!”
Buying in Europe creates a demand in Europe, and selling in US creates extra supply in US. So, the market takes care of the transfer from high supply to low supply area.
Did the banks export gold then?
The article says the issue is foreign entities buying American gold as a hedge against a volatile, risky dollar as a reserve currency.
The Netherlands physically moved 27 tons of gold from the US and Canada (mostly New York) to the Netherlands this year.
Just to give a small hint: the 1998 "strage del Cermis" [0], in which a US aircraft mistakenly cut a cable supporting a cable car and resulted in the killing of 20 people. The pilot, Captain Richard J. Ashby, and his navigator, Captain Joseph Schweitzer, were put on trial in the United States and were found not guilty.
Try to imagine something different. An Italian military aircraft flies in the US, and mistakenly kills 20 people. What would have happened to the Italian pilot?
[0]: https://en.wikipedia.org/wiki/1998_Cavalese_cable_car_crash
The official story is that the maps they were given were out-dated and led to confusion in their location.
It was painfully obvious that the incident was inspired more by Top Gun than those notoriously bad maps the USAF uses....
But as you say, the USA investigated itself and assured its little buddy Italy that there was nothing improper. So sorry about those dead folks.
Intercontinental Exchange launches trading in gold futures in London - https://giftarticle.ft.com/giftarticle/actions/redeem/e5d7ca...
How many other bank or multiples around the world would be able to support such a sale ?
If the price of gold didn't go up several thousand percent since the Klondike Gold Rush, there would be 0 reason to be up there at all. The Klondike produced -- on the low end of estimates -- 10 million ounces of gold worth in 10's of billions of dollars in today's money.
Also Yukon (and that show) is majority placer, while Nevada looks to be hard rock? Hitting a rich vein means a massive payday, but even if not, the amount of rock they're moving is absolutely bonkers. Look at some of the massive craters they're digging out! 10, 20, 30 feet of topsoil to get to a few feet of pay gravel over a few dozen acres of ground is just not the same thing.
Dunno even what reclaimation looks like for a 1/2 mile deep crater. I'm guessing, "nothing lol deal with it"
You gotta remember, if those miners weren't basically jumped up amateurs they wouldn't be on a tv show.
I remember watching the first couple seasons of that show. Every time it went to commercial break they'd try to hype up the melodrama with "we gotta do X or we're not gonna reach a thousand ounces!"
My wife and I still quote that to each other out of the blue.
Admittedly I live in a state roughly 3x the area of Texas.
Crazy idea go look at a map.
Theres one mine outside a town, that has more gold than all of America.
Half the worlds lithum for example also comes from WA. Most of the worlds treasures that are dug out of the ground can also be found there. Most of it has never seen a person, theres far more there to be found one day in the future.
Although a sibling commenter mentioned that they moved their gold by selling it and rebuying it in Europe. If that gold qualifies as non-reserve gold after sale, and is moved out after sale to (for example) China, then perhaps?
[0]: See the link in https://news.ycombinator.com/item?id=50134172
I don't know. Does it count as export if it's not moved an inch?
Not sure if "The U.S governments gold reserves" also includes the ones from other countries though.