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Central Banks Buying Gold In Stead Of Treasuries

Central banks are buying gold everywhere

Central Banks , became net buyers of gold in 2009. In 2011 they bought 440 tons. Central banks continued to buy gold; net purchases recorded during the first quarter, 2012 amounted to 80.8 tons, accounting for around 7% of global gold demand. Central banks from a diverse group of countries added to the overall holdings of the official sector, with a number of banks making sizable purchases.

After having already purchased ten tons of gold so far this year, the National Bank of Kazakhstan said it plans to purchase an additional fifteen tons this year and as much as seventy tons per year in 2013 and beyond.

"Nineteen fifty-eight marked the first year in which foreign central banks exercised their convertibility rights in significant amounts and returned their dollars for gold. US gold reserves fell 10% from 20,312 metric tons to 18,290 that year. The US made it abundantly clear stopping the drain of its gold reserves, and the depreciation of its currency against gold, was a huge priority. Ultimately ir removed the right to exchange dollars for Gold

Since 1913 the US dollar has lost over 95% of its purchasing power while gold has gone from US$20 an ounce to currently over US$1600.00 per ounce in the same time frame When people catch onto the fact that all government statistics are so massaged as to be useless, and actually start to think about how much more they are paying today over yesterday for the necessary everyday items they need to get by, than they will start to understand why gold is so important to a sound monetary system Continuing low interest rates, combined with higher inflation rates will equal low to negative real rates of return causing continued demand for gold which is being bought with dollars. The world's continues to dispose of dollars and buy gold. China has imported more gold in six months than the entire gold reserves of Portugal

China continues to do one thing. Buy. Because while earlier today we were wondering (rhetorically, of course) what China is doing with all that excess trade surplus if it is not recycling it back into Treasury's, now we once again find out that instead of purchasing US paper, Beijing continues to buy non-US gold, in the form of 68 tons in imports from Hong Kong in the month of June. The year to date total (6 months)? 383 tons. ( at current prices a ton is about $51.78 million dollars In other words, in half a year China, whose official total tally is still a massively underrepresented 1054 tons, has imported more gold than the official gold reserves of Portugal, Venezuela, Saudi Arabia, the UK, and so on, and whose YTD imports alone make it the 14th largest holder of gold in the world. Realistically, by now China, which hasn't provided an honest gold reserve holdings update to the IMF in years, most certainly has more gold than the IMF, and its 2814 tons, itself. Of course, the moment the PBOC does announce its official updated gold stash, a gold price in the mid-$1000 range will be a long gone memory.

Here is the latest breakdown of gold reserves by Top 20 countries via the WGC:

World Official Gold Holding

1 United States ( down from 18,290 metric tons in 1958) to 8,135.5 tons

2 German 3,395.5

4 Italy 2,814.0

5 China 1,054.1

6Switzerland 1,040.1

7 Russia 918.0

9 Japan 765.2

10 Netherlands 612.5

11 India 557.7

12 ECB 502.1

13 Taiwan 422.7

14 Portugal 382.5

15 Venezuela 365.8

16 Saudi Arabia 322.9

17 United Kingdom 310.3

18 Lebanon 286.8

19 Spain 281.6

20 Austria 280.0

The traditional unit of weight for precious metals and gems.

1 troy ounce = 31.1034768 grams.

32.15 troy ounces = 1 kilogram (Kilo)

32,150 troy ounces = 1 metric ton (1,000 kilos) at $1,600 per troy ounce =

51,780,000

1000 troy ounces = 31.1 kilograms

The world continues to sell Dollars and convert them into gold to escape the inflation caused by QE

Total US debt as of 2010 when all liabilities are included $202 trillion dollars

Existing US Gold about 152 billion dollars

If a new gold backed currency were issued. Each $206 dollars of outstanding Federal Reserve Notes would buy one new gold backed dollar.

If Congress won't abolish the Fed. The world might abolish the dollar

The traditional unit of weight for precious metals and gems.
1 troy ounce = 31.1034768 grams.

32.15 troy ounces = 1 kilogram (Kilo)

1000 troy ounces = 31.1 kilograms

The world continues to sell Dollars and convert them into gold to escape the inflation caused by QE

Total US debt as of 2010 when all liabilities are included $202 trillion dollars

Existing US Gold about 152 billion dollars

If a new gold backed currency were issued. Each $206 dollars of outstanding FRN's would buy one new gold backed dollar.

If Congress won't abolish the Fed. The world might abolish the dollar

.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.