Why Are Central Banks Buying So Much Gold What Do They Know That We Don t

Monday, July 6, 2026, Maneco 64, Home of Alternative Economics and Contrarian Views. So I hope all of you had a great weekend and in particular my viewers in the U.S. with the 4th of July weekend. Today we're going to look at gold and the fact that central banks are buying a lot of gold. And we're going to look at what happened in the past during some other gold bull markets. And we're going to ask a question that we're going to explore today. And that question is, what do central banks know that we don't? And I'm going to give you my two cents on why this is happening. Before I start, I'd just like to thank all of you again for your interest in the channel. If you enjoy watching my videos but haven't subscribed yet, make sure you do. Make sure you check as well if you haven't been deleted from the subscriber list on my channel. I've heard that some people have. Anyway, so this chart here may be one of the most important charts in the entire gold market. Yes, because for decades, central banks, they've been selling thousands of tons of gold. But today, well, today they're buying nearly a thousand tons every year. And that started in 2022. And these aren't hedge funds. They're not gold bugs. They're literally institutions that issue the world's paper currencies. They are the guardians of your currency. And yet they're buying a lot of gold. So the obvious question, of course, is what do they know that the rest of us don't? Well, I have some ideas about that. And we're going to explore that, of course. So historically, as you can see, in the 1970s, central banks sold roughly a thousand tons overall. Even the U.S. was selling gold back in the 70s. Throughout the 1990s and 2000s, central banks sold over three and a half thousand tons of gold. There was the so-called Washington Gold Agreement. There's, of course, the Gordon Brown bottom. He sold half the U.K.'s gold reserves. And he also had the Swiss National Bank. They sold a lot of gold, even more than Gordon Brown. They sold a thousand tons. And they still hold a thousand tons, though. So the Swiss used to have a lot more gold. And, of course, I'll bring up the old editorial. Back then, economists and publications like the FT, back in 04, they're telling us that gold was finished and it was worth not holding it. The pointlessness of holding a building continues to sink in. Basically, it was a barber's relic, like Keynes had said many decades before. So there was confidence in fiat currencies, in globalization. Inflation, as they call it per the CPI, was fairly low and under control. And also government debt wasn't growing as it has grown since 08. So gold looked unnecessary. And despite that, the gold price went up, of course, during the 2000s. But everything now has reversed. So the question we need to ask is, what happened? And the reason I'm doing this exercise is because many of you might be concerned about the price action. But we need to look at the underlying fundamentals of gold. But several major shifts have occurred. And the first one, of course, is the debt explosion. Not just government debt, but corporate debt, private equity debt, and I consider derivatives a kind of debt. And that we don't even know at what level it is. So U.S. debt has gone through the roof. European debt, especially since 08 and also since 2020 and the COVID crisis. Japanese debt, of course, as well. Global debt. The central banks know that debt cannot grow forever and faster than GDP. And I think that's one of the problems they're facing. The other reason why central banks are buying a lot more gold now is because the United States and even Europe, the EU, they've weaponized reserves. And this changed everything, of course, when Russia's reserves were frozen back in 2022. So countries asked the question, if dollars can be frozen, how safe are our reserves? That's a reasonable question. It's the same thing that people might be asking if banks are closing accounts for people for no reason whatsoever. How safe is my money in a bank? So gold cannot be sanctioned, of course. You've got a gold coin here. It's yours. It's in your hand. No one can take it away from you. They might try to take it away from you, but at least you've got a hold of it. And so, yeah, gold has no counterparty risk. Unlike this international German loan or bond from 1930 that was issued by JP Morgan, 5.5% gold bond. So this bond was defaulted in 1933 in that they stopped paying in gold. They just paid in paper dollars. And then in 1945, after Germany lost the war, it was completely defaulted upon. You can see that they stopped clipping the coupons in, yeah, in 1945. So there you go. That's paper. That's real money. A third factor that is impacting central banks. Well, I think that's got all to do with the debt and inflation. Most people think inflation is something that pops out of nowhere because of greedy capitalists, because of oil prices. But the underlying reason, of course, is the growth of credit and currency. And the central bankers know that because they're the ones enabling that. So for 20 years, inflation was pretty much under control. Up until 2020, it was around 2%. Even though they were doing a lot of QE and low rates, that currency and credit stayed within the financial system. But after 2020, this has all changed. And the genie is out of the box. So central banks witnessed firsthand that creating trillions of dollars eventually has consequences. And of course, I've been warning about this for many years on this channel. So who's buying this gold? Central banks are buying this gold. It's from all over the world, actually. We've got China, Poland, India, Turkey, the Czech Republic, Kazakhstan, Uzbekistan, Singapore, Qatar. Brazil has been buying as well. Many others. And this isn't just one country. It's a worldwide phenomenon. And it's also in developed markets, emerging markets, east, west. So the question we need to ask is, when institutions with very different political systems all make the same investment, it's worth paying attention to, I would say. The ultimate question we need to ask is, why gold and why not bonds? Well, it's easy, right? Unlike treasuries, gilts, or European government bonds, bank deposits, or currencies, gold isn't anyone else's liability. So as I've said before, no default risk, no counterparty risk. It's globally accepted as well. It's liquid. And it's scarce. It is scarce. You don't find gold lying around anywhere ready to be picked up, despite what some people say. So central banks already own a lot of fiat dollars, euros, yens, pounds, and yet they continue adding gold. Well, I think it's because gold diversifies away from paper promises. And I think, as Jim Sinclair used to say, you need to be your own central bank. And that means having gold. Could they also be preparing for something that we don't know about? I mean, these people meet secretly every two months at the BIS. Well, these are not predictions, of course. This is speculation, just like speculation that me and others have made about the revaluation on the 4th of July. And I said, you know, there's a chance that it might happen, and it hasn't happened. So maybe central banks see a higher inflation for many years. And I think that's valid, because the only way to keep the debt going and growing is, well, that creates inflation. So you inflate away the debt. The second possibility is that there's going to be a multipolar monetary system. And I think that's already evolving with the BRICS. And there will be less dependence on the dollar, on the fiat currency, as a reserve asset. So the only neutral reserve asset that has worked for millennia is gold. Well, there's also another possibility that they see they're working on a monetary reset. And that usually happens when the debt becomes excessive, when the system breaks down, because there's too much debt. Economies break down as well. And gold is frequently a part of this reset. So a few examples are 1933 to 1934 with the gold revaluation. You've got Bretton Woods in 1944 and 1971 as well, with the end of gold convertibility and the Bretton Woods Agreement. Gold became a major thing. Central banks, they appear to believe that gold should play an important role. And they're right. They're not silly. They know that paper promises, at the end of the day, are just that. So my conclusion is that the institutions that create fiat money aren't reducing their gold holdings. They're increasing them year after year, record purchases, record demand. So if gold were truly a relic, why are the world's monetary authorities buying so much of it? And I think even the US might be buying some of it with USA Tether as a proxy. So perhaps the most important question investors should ask isn't where the price of gold is going today, tomorrow, next week, or next year. I think the most important question is, why are the people who run this fiat system buying the asset that was supposed to replace fiat? Well, maybe they're simply diversifying. Maybe they're preparing for a more uncertain world. Or maybe they're quietly positioning for a monetary system that looks very different from today's. So only time will tell. I don't have a crystal ball. And with that, I'm going to wish you all a very good day. Take care. Bye.