Bank of Mexico Admits 96% of Gold Reserves Held in US & London

After months of dragging their feat and claiming it was necessary for national security reasons to keep the info classified (sounds like an freedom of information request to the Fed) The Bank of Mexico has been forced to comply with the Federal Transparency Law and release information revealing where the Central Bank’s gold reserves are held.

In what will not be a surprise to any SD reader, the report reveals that The Bank of Mexico holds less than 5% of it’s gold reserves within Mexico, while the remaining 95% of it’s ‘physical’ gold reserves are held in the US and London (translation- nearly the entirety of Mexico’s gold reserves are held at the Bank of England and the NY Fed basement, and have likely been rehypothecated more times than an MFG client’s assets).

Our friend Eric Sprott recently pointed out in his monthly newsletter Do Western Central Banks Have Any Gold Left? the likelihood that the Western Central banks have largely leased out the gold they are supposedly holding as reserves.
In effect, Mexico just admitted that their actual, tangible gold reserves are 1/20th of the stated total.  Perhaps Mexico should consider hiring Hugo Chavez as their gold reserves consultant.

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Last year the story went around the world: Banco de México (Banxico) refused to reveal in what country its reserves of gold were stored. Mexico was on the world stage as regards gold, after it purchased 93 tonnes, and rose in the global ranking of gold reserves calculated by the World Gold Council.
Today, thanks to the Federal Transparency Law, Banxico has become perhaps the first central bank to reveal in writing the amounts of its gold holdings as well as the names of its custodians and the locations where it s gold holdings are supposedly held.
It was quite difficult to obtain this information, for the Bank refused again and again to hand over the information until compelled to do so by a ruling of its own “Department of Management for Rules Control”, which is the entity in charge of dealing with appeals presented as “Appeals for Revision”.
The wrangling went on for four months, during which Banxico insisted that it was necessary to classify as “Reserved” all information referring to its gold position; it claimed that revelations might “harm the financial, economic or monetary stability of the country”.
Once the four cases were resolved favorably, the Liaison Unit of the central bank notified this journalist  through the following documents: REF.: 22.25.2012, I22.27.2012, I22.28.2012 y REF.:I22.29.2012, as follows:
  •    “At month’s end, April 2012, Banco de Mexico maintained a position in fine gold of 4,034,802 ounces, of which only 194,539 ounces are located in the territory of the United Mexican States.”  [Our emphasis]    
  •  Banxico “has been informed and knows the specific location of the gold position that forms part of its reserve of International assets”
  • The countries where these reserves are located are “United States of America, England and Mexico.”  And also, “the acquisitions of gold during March and April 2012 are under custody in England”. 
  • And besides, it is precisely there in “the city of London, England, where more than 99% of the  gold which the Bank of Mexico maintains outside the country is presently under custody…
The distribution would be: in England ˃94.23%; México, 4.82%; United States ˂1% Voilá.

Though the figures refer to past April, they are still current.

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