Tuesday, January 7, 2014

The River of Affirmation

It is amazing the staying power of this "German repatriation" phenomenon which so many have attempted to draw far reaching conclusions from, based upon pure conjecture.

At the risk of giving the topic far more weight than it deserves by even addressing it, I will nonetheless "springboard" from it, into a related stream of awareness which may help assuage the irrepressible angst which appears to blanket this issue like a rather odiferous fog.

Try to think of the FLOW of gold in Heraclitian terms, as in "No man ever steps in the same river twice". And in this context, one can appreciate that the Bundesbank has ZERO interest in this quaint idea that its gold must be frozen in time, in the form of the same 50+ year old numbered bars, sitting on the same pallet, in the same dark corner, collecting dust in the same vaults of it's American "stewards". The German people may have this notion in their minds, but the Bundesbank surely does not.

Neither central, nor bullion banks have any such thought of gold as being a demobilized, non-financial commodity that earns dust alone by lying very still until the time when it is called upon to execute its historic function. Certainly not since before the 90's at least, but probably a good deal longer.

For Central and Bullion banks, gold is a means to an end, and the end is far divorced from the historic function of gold, and in the execution of this means gold is constantly on the move. But always secretly, and neither you nor I can truly know who owns or possesses what physical or paper title to gold in large amounts beyond pure speculation.

Suffice it to say that some of the gold in those original bars exists from re-melted stocks of ancient gold which are co-mingled with freshly mined gold, and as long as the purity of the metal holds to monetary standards it makes no difference whatsoever as to what form one party's gold takes today versus what form it had been composed of even a year ago. All gold is an ancient material in the earth, some was extracted thousands of years ago and some yesterday, but it is ALL many thousands of years in the making.

So to reach this momentous conclusion that Germany's gold "isn't there" is akin to reaching this fantastic conclusion that the price of gold is being manipulated. Of course it is, and whether gold exists where monetary authorities say it exists, or not, does not matter one iota.

We live in a world where "if you can dream it, you can do it." And all the Pollyanna fairie tales of your childhood that you see resurrected as "Mottoes of Affirmation" on Facebook and in the offices of Tony Robbins are the reality we prefer. The "government statistics" we absorb on inflation data, unemployment and GDP are "whatever we want to believe" and so why should the whereabouts or constitution of a nation's gold reserves be in any way different?

They are whatever you believe them to be, wherever you believe them to be. For some people there is no gold, and for others it was always there. It makes no matter to the Bundesbank, the NYFR, or the governments or sovereigns as to the physical whereabouts or constitution of the German people's gold, because they have "confidence" that "such matters are well in hand".

As with student and master, when the system is ready, the gold will appear.

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