Jan Nieuwenhuijs: Central Banks Hoarding Gold
Tom welcomes Jan Nieuwenhuijs onto the show to discuss the commodity markets, gold, and the problems within central banking.
Jan explains how many issues with the Comex are due to misinterpretations of the data, and so far, he doesn’t see any fraud. There are only unsubstantiated rumors that the Comex has failed to deliver.
Futures markets act as a hedge for many players, and it is normal for open interest to be concentrated in the near month. This year’s deliveries are higher than in the past, but it’s quite normal to see large open interest positions. Jan discusses how speculation on these markets work and why there were many lucrative arbitrage plays early this year.
He discusses central bank’s activity and why inflation has yet to appear in the financial system. QE is creating imbalances in the system, and eventually, inflation will appear because central banks are in a dead-end street and can’t reverse. Deflation is like kryptonite for central bankers because lower prices result in lower wages, making it more difficult for people to repay debts.
Jan discusses how gold is fairly evenly distributed amongst the world’s nations, and why the trend may be toward a new multi-currency system where gold becomes the benchmark standard.
Lastly, Jan explains the strategic secrecy around gold by governments and central banks and the risks to the financial system if they discuss gold openly.
Time Stamp References:
1:25 – Problems in the Comex?
2:20 – Open interest and delivery.
3:30 – No evidence of failure to deliver.
6:15 – Reasons for large open interest.
8:00 – Arbitrage and bullion banks.
11:40 – Optimal gold in your portfolio.
12:20 – Recommends holding some physical.
15:10 – Bitcoin being better than gold.
17:20 – Inflation and currency creation.
20:40 – Why the Fed can’t have deflation.
22:50 – ZIRP, NIRP and Bond Bubbles.
25:10 – China, world gold reserves, and treasuries.
28:30 – Europe and a global gold standard.
30:30 – Secrecy of central banks around gold.
36:35 – Could gold go lower?
Talking Points From This Episode
- The Comex and rumors regarding these markets.
- Why gold will become the standard.
- Benefits of bitcoin, but comparing it to gold may be a mistake.
- Central banks cornered, inflation, interest rates and bonds.
Jan Nieuwenhuijs is a financial researcher and gold analyst. He started his career in the Dutch movie industry, but become fascinated by economics after the Great Financial Crisis. In 2013 he began researching the Chinese gold market, which he found was three times larger than what was widely assumed in the West. His work on the Chinese gold market gained him global recognition. After researching the Chinese gold market, he studied international economics, financial markets, and the global monetary system. He has worked at a BullionStar in Singapore, Voima Gold, and does consultancy work in Finland.