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ARGENTINA’S GOLD IS MISSING
by Joseph P. Farrell, Giza Death Star:
When I read the following article shared with us by T.M. (with our gratitude), my first initial thought was that I was having yet another episode of deja poo. If you don’t know what deja poo is, it’s that sense that you’ve heard all of this crap before. In recent years I’ve blogged about story after story of countries trying to repatriate their gold from big western central banks, like the Bank of England or the New York Fed, only to be told they can’t have it because “we don’t like you,” (England to Venezuela), or that “you can’t have all of it right now” (the USA to Germany), or the nation finds out that maybe all the gold isn’t of assay and reserve quality after they do get their gold back (Germany), or that, “hey, gosh, shucks, seems we misplaced all your gold… sorry about that!” (US New York Fed governor Strong to Reichsbank President Hjalmar Schlacht, 1928).
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We’ve also blogged about the Canadian mint finding gold clad tungsten bars, Chinese loans worth billions of dollars collateralized with more gold-clad tungsten bars, and gobs of missing World War Two Operation Golden Lily Japanese gold. But hey, I’m so glad there are still people that want the gold standard back, because it’s the only sure guarantee of a stable international monetary system, because, you know, gold is real money, those big international and central banksters are the most trustworthy people in the world, and because, well, hey, “too big to fail” and “too big to jail,” or something like that.
So now the latest disappearing gold act seems to have occurred in – big surprise here – Argentina. Get out your favorite Juan Peron beer mug, pour a nice cold cerveza and enjoy this one:
According to the article, it would seem that either the government of Argentina, or its central bank, or perhaps both, were behind a covert very quiet smuggling transfer of Argentina’s gold to hidden unknown places and persons abroad: From the first three paragraphs:
Argentina’s reserves, held by its Central Bank, include almost two million troy ounces of gold, valued at about $4.5 billion. But lately, there’s a question that’s on everybody’s lips: where is it? Was it taken out of the country? Did some of it remain within Argentina, while the rest was transferred abroad? Well, the official information only offers partial answers.
The administration of far-right President Javier Milei admitted to the recent transfer of gold abroad, but didn’t specify quantities, the destination, or the purpose for this measure. Nor did the Central Bank provide any details. In a scenario of financial instability — and with the government facing the need to accumulate reserves — the decision generated suspicions and speculation. There are also fears that the gold could possibly be seized, due to long-standing legal cases that have been filed against Argentina by foreign creditors.
The news about the transfer of the gold was not officially announced by the government or the Central Bank. Rather, the information came from the bank workers’ union, known as La Bancaria. (emphasis added)
The emphasized portion of the previous quotation indicates the nature of the interpretive problem: is the Argentine government paying off creditors with its gold? – recall only the confrontations between that country’s government and its President Kircher a few years ago – or is the country trying to safeguard its assets by hiding them and placing them beyond the legal reach of creditors? There is, possibly, a clue just a little further on; continuing the citation from where we broke off:
Its leader — the left-wing legislator Sergio Palazzo — presented a request within the framework of the Law of Access to Public Information for the Central Bank of the Argentine Republic (BCRA), asking “if there [were any] operations to send gold bars abroad during the month of June.” Specifically, he demanded to know if transfers of gold took place on June 7 and June 28 through Lumil — a private security firm that transports valuables — and British Airways. He also wanted to know the specific amounts, their destination, the administrative procedures taken, as well as the names of the officials involved.
The BCRA has 30 days to respond to the legislator and has not yet done so. But last Friday, Minister of Economy Luis Caputo acknowledged that the operation was indeed carried out. “It’s a very positive move… if you have gold in the BCRA, it’s as if you have [assets] inside that cannot be used for anything. If you have it outside the country, you can get returns,” he argued, in an interview with La Nación+ , an Argentine TV channel. “It’s much better to have it guarded outside, where they pay you something,” he added.
His words suggest that the purpose of the shipment — possibly to London or Basel, according to speculation — was to deposit the gold and earn interest. However, if that’s indeed the case, numerous economists have warned that the logic of the transfer — with the cost of the required insurance — didn’t justify the operation, given that the returns are very low. (Emphasis added)
In other words, it appears that Senor Milei’s administration has decided to use Argentina’s gold reserves as a means of earning “interest”, and that means that the gold reserves have been hypothecated as a part of investments or collateral for a loan, as the article suggests:
Also without giving details, President Milei later hinted that the transfer of the gold is related to the possibility of using it as collateral to take out a bridge loan. The president said that Argentina already has sufficient U.S. dollars available to pay the maturity of interest on foreign debt — a payment of about $1.6 billion — which is due in January 2025. He claims that the bridge loan would be to pay an additional sum of $3 billion to foreign creditors.
If this is the purpose of transferring the gold abroad, the government’s bet would consist of attempting to convey tranquility to the financial markets. This would, in theory, reduce the country’s risk level, which prevents it from taking out new lines of credit. On the other hand, by turning to gold, it suggests that Argentina doesn’t have sufficient liquid assets and is now forced to resort to its most precious treasure.
So what’s going on?
At the beginning of this blog I briefly reviewed all those blogs I’ve written on this site over the years about gold and the attempts of various countries to repatriate their reserves from western vaults in Paris, London, and New York. The countries attempting to do this were Germany, the Netherlands, Austria, and Venezuela, with Germany sparking the round of repatriation, while other stories involving gold-clad tungsten bars popped up in China and Canada, where such bars were used to acquire liquid capital. In the case of the German repatriation, the amount sought, and the amount delivered and repatriated, were two different things, and to add insult to injury, there were questions about the assay purity of the bars that were repatriated among many circles in Germany that had been following the story and raising inconvenient questions that the Bundesbank was in no hurry to answer.
In this case, the article has outlined the conventional interpretive and speculative possibilities adequately. But there are some high octane speculative possibilities that invite us to take the plunge off the end of the speculation twig and into the deep canyon below. Argenina’s gold was not repatriated, but depatriated. But in all other respects it resembles the repatriation stories by having something in common with them: for whatever reason, countries are trying to get their gold reserves out of the central banking system of “the west”, i.e., the central banks of France, Great Britain, and above all, the USA. And that effort appears to have been to try and bring the precious yellow bars to the European continent itself. If that’s the case, then my guess would be that Argentina’s gold is either in the vaults of the Tower of Basel (The Bank of International Swindles Settlements), or in the vaults of some large Swiss investment bank, such as Union Bank of Zurich or Credit Suisse.
