Written by Bryan Lutz, Editor at Dollarcollapse.com:
Little by little Central Banks in developing countries are phasing out the US dollar.
One small purchase at a time, they’ve developed their own way to opt-out of the dollar’s global financial dominance…
Only with one small problem.
CNBC reports:
Central banks are increasingly buying gold from local mines as prices surge
“Central banks are increasingly looking to bolster their gold reserves. And they are turning to mines in their backyard to source the yellow metal.
Besides being cheaper, securing gold directly from mines helps support local industry and bolsters reserves without weighing on foreign exchange reserves, experts said.
While countries such as the Philippines and Ecuador have been doing this for years, more central banks with access to domestic gold mines have started, increased, or are considering direct local purchases, according to the World Gold Council.
Nineteen out of 36 respondents in the World Gold Council’s latest central bank survey said they are buying gold directly from domestic artisanal and small-scale gold miners in local currency.
Four are thinking of following suit. This is a slightly higher figure than last year’s survey, when around 14 central banks out of 57 said they were buying directly from domestic sources.
“One trend that we’re seeing is that some central banks, especially in Africa, Latin America, are starting to buy gold directly from domestic, small-scale gold mines, which have really proliferated because of the higher price,” said Shaokai Fan, global head of central Banks at WGC.
Central banks of Colombia, Tanzania, Ghana, Zambia, Mongolia and the Philippines are relying on domestically mined gold to build up reserves, according to the industry body.”
While developing countries slowly opt-out of the dollar there is a bigger competition for gold reserves going on.
The competition between East and West.
China continues to mine, smelt, and buy more gold than the United States. Russia too…
With the United States suffering from the same problem as many developing countries.
Even though a country can mine gold from their own soil, they must still be able to process it.
If they can’t process it, they have to engage in foreign exchange buying another currency to pay for smeltering services.
And that means, it costs more to buy the gold you mined out of your own soil.
So, right now…
China is winning that race with 50 more smelters than the rest of the biggest refined metal producers, combined.
Whether in developing countries, or east vs. west, little by little…
The United States is slowly falling behind.
