Poland Has 300 Tonnes Of Gold. Getting Ready to Invade Western Ukraine?

We follow the gold market closely. It’s not always a matter of price; often our focus is on who’s buying and who’s selling. This applies especially to central banks and finance ministries, since those official institutions collectively own 35,700 metric tonnes of gold or about 18% of all the above-ground gold in the world.

From 1974 (when the IMF demonetized gold following the 1971 collapse of the Bretton Woods gold standard) until 2010, central banks were net sellers of gold. The biggest sellers in this period were the U.S. (about 1,000 metric tonnes from 1974-1980), the UK (about 300 metric tonnes from 1997-1999), Switzerland (about 1,000 metric tonnes from 2000-2010) and the IMF (about 1,500 metric tonnes in stages from 1974-2010).

A major inflection point arose in 2010. That’s when central banks flipped from being net sellers to net buyers.

There were no new sales by the UK, Switzerland, the U.S. or the IMF. Suddenly, China, Russia, Japan and others joined the club of nations adding to their gold reserves. This trend has gained momentum since 2010.

Now we have to add Poland to the list of major buyers. Poland’s acquisition of 300 metric tonnes, as reported in this article, moves it to 20^th place on the list of 100 nations holding some measure of gold in their reserve positions. Poland is the world’s 22^nd largest economy, so its position at 20 on the gold list means it is an important gold power when measured by the gold-to-GDP ratio.

One can applaud Poland’s move as a matter of financial prudence and protection against either dedollarization or dollar-denominated inflation in the years ahead. But is something else going on? ‘

Many readers may not know that Poland was the heart of something called the Polish-Lithuanian Commonwealth, which was ruled by the King of Poland and the Grand Duke of Lithuania from 1569 to 1795. That kingdom included much of what is present day Western Ukraine including the city of L’viv.

Poland has been sliced and diced by invaders including Napoleon, Hitler and Stalin in the centuries since. But they have never lost sight of their ancient claims on Western Ukraine.

Russia now dominates Eastern Ukraine and the seacoast from the Sea of Azov to the Black Sea and Crimea. Ukraine is badly losing the war. Is it possible that Poland and Russia will agree to simply carve up Ukraine between them with Russia taking the east and the seacoast while Poland takes the west?

At most, Zelensky would be left with a landlocked rump state around Kyiv, but more likely he would become a vassal of Poland. This scenario is being taken seriously in European capitals and Russia (although the U.S., as usual, is out to lunch). In any case, building up gold reserves alongside military reserves does facilitate the path to a new Polish federation.

Corporate leaders and institutional fiduciaries looking to incorporate state of the art predictive analytics to their risk mitigation and strategic analysis should click the link to learn more about Raven Predictive Analytics®.