Why Is the Netherlands Moving Its Gold Out of America? | The Palki Sharma Show | India Global Review

Our next story is about gold, more than 78 tons of it in gold bars. This gold is worth more than $10 billion. It was sitting in a vault in New York, but now it has been shipped to London. Why? Because of Donald Trump's policies. Central banks are struggling to keep up with the U.S. president. In this case, it is the Dutch Central Bank. The gold in New York belongs to them, and they're moving it citing crisis preparedness. That's the reason they're given, crisis preparedness. And why are they taking it to London? Because London is the world's biggest trading hub for physical gold. More than $900 billion worth of gold is traded here every week. $900 billion every week in London. So the Dutch believe that London is a better market for them. A better market for emergency transactions in case the need arises. Which is why they've pulled their gold out of the United States. In fact, they've done the same with Canada. Their reserve in Canada was not that large, just 7 tons of gold. It has now been taken out from a vault in Ottawa. But it's enough to be noticed, because gold is unlike any other asset. You rarely move it. Even for individuals, when people buy gold, they put it away. In lockers, or in a safe, or in a bank. And the same logic applies to a central bank. When a central bank moves its gold, it is not moving metal. It is moving trust. And the Dutch statement does not help. They call it crisis preparedness. They say they want their gold to spread more evenly in different countries, under different governments. But that raises an obvious question. Which crisis are they preparing for? The Dutch have not spelled it out. But they are not the only ones doing this. Last year, France took a similar decision. France pulled out all of their gold from New York. It was kept at a very safe location, at the New York Federal Reserve. It's a regional bank under the US Federal Reserve, which is America's central bank. So the French gold was quite safe. It was secure. But they removed it nonetheless. And just like the Dutch, they did not really give a reason. Their central bank governor gave a statement. All he said was that this move was not politically motivated. But soon after that, contrary reports emerged. They said Europe was wary of storing its gold in the US. The reason? The Trump administration and its unpredictable policies. The Europeans fear that their gold could be seized. I know it sounds far-fetched, but honestly, far-fetched is also the new normal. So it's best to be safe than sorry. Perhaps that is why central banks are taking precautions. They're diversifying their reserves and reducing risk. And there are numbers to back this up. More central banks are using gold to store their assets. Earlier, they preferred American government debt. It was the world's biggest reserve asset, US government debt. But last year, gold surpassed it. 27% of the world's reserve is now in gold, 27%. American government debt is down to 22%, and this is followed by the euro, which held steady at 15%. These numbers are from the European Central Bank. They confirm the trajectory. And this is a big shift. The reserve bank of any nation is like a rainy day fund. There are limited investments to store that wealth. You have foreign currencies, you have loans that you give to other governments, and you have gold. And out of all these assets, gold stands out. It's a safe haven asset. You cannot print it like currency. And once you have gold, you can use it to buy anything. That is why central banks still keep gold. It is the last resort. And they've turned to gold every time there's a crisis. Time for a back story. Let's take you to the 1960s. Back then, the dollar was tied to the gold. One ounce was priced at around $35. One ounce is about 30 grams of gold. So 30 grams of gold was at $35. Any central bank could walk up to the U.S., hand over the dollars, and get gold in return. But France did not trust this system. They believed that the U.S. did not have enough gold to honor every exchange. Charles de Gaulle was the president of France at that time. He came up with a radical plan, a plan to bring back all the French gold held overseas, including the gold held in places like New York. This operation was given a name, Vide Gouste. In French, that means empty pockets. It began in September 1963. The gold was brought back by ships and aircraft. After 44 boat trips and 129 flights, France brought back over 3,000 tons of gold. More than 60 years later, gold is on the move again. And once again, the question is not where gold is the safest. The question is who can be trusted to hold it.