Mark Moss explains how private gold vaults protect against sanctions but create a liquidity problem since the gold sits outside the banking system. The Netherlands repatriated its gold holdings due to geopolitical concerns, signaling a shift in how countries think about where to store their reserves.
IMF reports said that if I hold the gold in my own vaults, I don't have to really worry about sanctions. But the problem is now I have a liquidity problem because now it's not in the banking system. So how do I actually use it? And so what the Netherlands is doing here is they're saying, hey, because of geopolitical unrest, I'm not comfortable with where my gold is in the US and Canada. I'd be much more comfortable if it was closer to home, and it might give me more liquidity protections at the same time. So you can see this is starting to shift the way the world is thinking about the reserve balances, what makes up the reserves, and more importantly, or equally as important, where those reserves are located.
