Globally, central banks added a net 337 tons of gold in Q3, the second-highest third-quarter total on record behind 2022.

Through the first nine months of the year, central banks bought a net of 800 tons of gold. That’s 14% more than through the same period in 2022.

The People’s Bank of China led the way, adding another 78 tons of gold to its holdings in the quarter. The Chinese central bank has bought gold for 11 straight months. Since the beginning of the year, the People’s Bank of China has increased its reserves by 181 tons, and it has added 232 tons since it resumed official purchases in November 2022. As of the end of September, China officially held 2,192 tons of gold, making up 4% of its total reserves.

China has a history of adding to reserves and then going silent.

The People’s Bank of China accumulated 1,448 tons of gold between 2002 and 2019, and then reported nothing for more than two years before resuming reporting last fall. Many speculate that the Chinese continued to add gold to its holdings off the books during those silent years.

In fact, there has always been speculation that China holds far more gold than it officially reveals. As Jim Rickards pointed out on Mises Daily back in 2015, many people speculate that China keeps several thousand tons of gold “off the books” in a separate entity called the State Administration for Foreign Exchange (SAFE).

Last year, there were large unreported increases in central bank gold holdings.  Central banks that often fail to report purchases include China and Russia. Many analysts believe China is the mystery buyer stockpiling gold to minimize exposure to the dollar.

The National Bank of Poland continued its buying spree in Q3 with a 57-ton increase to its gold reserves. That’s in addition to the 48 tons it bought in the second quarter. Year-to-date, Poland has bought 105 tons of gold, in line with a plan to add 100 tons to its reserves Bank of Poland President Adam Glapiński announced in 2021. The country currently holds about 11% of its reserves in gold. Glapiński recently indicated the buying will likely continue.

“This makes Poland a more credible country, we have a better standing in all ratings, we are a very serious partner and we will continue to buy gold. The dream is to reach 20 percent,” Glapiński said.

When he announced the plan to expand its gold reserves, Glapiński said holding gold was a matter of financial security and stability.

Gold will retain its value even when someone cuts off the power to the global financial system, destroying traditional assets based on electronic accounting records. Of course, we do not assume that this will happen. But as the saying goes – forewarned is always insured. And the central bank is required to be prepared for even the most unfavorable circumstances. That is why we see a special place for gold in our foreign exchange management process.”

Turkey sold 160 tons of gold last spring but returned to buying in the third quarter. The Turkish central bank bought 39 tons of gold in Q3, and its total reserves recovered to 668 tons.

According to the World Gold Council, the big gold sale earlier this year was a specific response to local market dynamics and didn’t likely reflect a change in the Turkish central bank’s long-term gold strategy. Although the Turkish government reinstated gold import quotas in early August, so far we haven’t seen a repeat of sales into the local market to meet elevated demand.

Eight more central banks made purchases of at least a ton during the quarter.

• India – 9 tons
• Uzbekistan – 7 tons
• The Czech Republic – 6 tons
• Singapore – 4 tons
• Qatar – 3 tons
• Russia – 3 tons
• The Philippines – 2 tons
• The Kyrgyz Republic – 1 ton

Russia announced plans to recommence buying foreign currency and gold in early August, but the government did not indicate the size or timing of future gold purchases.

The only seller of note was Kazakhstan. The country’s central bank reported a 4-ton decline in its reserves for the quarter. It is not uncommon for banks that buy from domestic production – such as Uzbekistan and Kazakhstan – to switch between buying and selling.

Looking at the entire year, China, Poland and Singapore bought the most gold.

The World Gold Council said it’s “all but certain that central banks are on course for another colossal year of buying,” after a record-setting 2022.

The strength of buying has, to some degree, exceeded our expectations. While we were confident that central banks would remain net purchasers in 2022, we thought it unlikely that it would match last year’s record buying volume. Should buying continue to be strong in Q4, the full-year total could get closer than we anticipated. Nevertheless, the historically high level of buying in Q4 2022 may be difficult to top.”

Total central bank gold buying in 2022 came in at 1,136 tons. It was the highest level of net purchases on record dating back to 1950, including since the suspension of dollar convertibility into gold in 1971. It was the 13th straight year of net central bank gold purchases.

According to the 2023 Central Bank Gold Reserve Survey recently released by the World Gold Council, 24% of central banks plan to add more gold to their reserves in the next 12 months. Seventy-one percent of central banks surveyed believe the overall level of global reserves will increase in the next 12 months. That was a 10-point increase over last year.

Inflation is already at a 40-year record-high, according to the Department of Labor‘s Consumer Price Index for May. Secretary of the Treasury Janet Yellen is already warning that high inflation is likely to stick with consumers for the rest of the year. This will be combined with a slowdown in American economic activity.

Ross McKitrick, a professor of economics at the University of Guelph in Ontario, Canada, noted that inflation usually comes in several stages – and the next one will make life much worse for everyday Americans. (Related: Expert economist: High inflation could have been avoided if Federal Reserve acted earlier.)

The first stage, according to McKitrick, happens when more and more newly printed money enters the economy.

“It’s at that first stage where you have the money illusion, which means people think they have more money than they do,” said McKitrick, noting that this leads to people spending more. This flood of new money into the market creates a very brief boom in the economy.

“But they don’t actually have more money than when they started,” he added. “What they have is a dilution of the money supply.”

The second stage is when this economic boom slows down and prices start going up due to the increased demand generated by the first stage. People begin to hope that the inflationary period is only short-term.

“People can cope with a lot of things temporarily. If you think, ‘Okay, the price of gas jumped and it will be high for a month or two, and then it will go back to normal,’ nobody’s going to change their behavior in response to that,” said McKitrick.

This, McKitrick noted, is the stage America is currently at. People are starting to relax their previous spending habits, but inflation is still on the rise.

Third stage of inflation to come with massive labor unrest

The third stage occurs when labor markets start adjusting to the new reality. Workers effectively take a massive pay cut due to inflation. This will cause a lot of discomfort among workers, who will start going to their employers demanding relief in the form of higher wages.

Bosses, in turn, will resist demands for higher wages by pointing out that their operating costs have also gone up and their budgets can’t afford to provide higher wages for their workers even if they wanted to.

“And both sides in effect have a genuine case to make that this is not new money, these are not larger profit margins – workers have lost purchasing power.”

As both workers and employers remain at this impasse, workers and unions will start threatening their bosses with strike actions and take very tough stances during bargaining efforts.

“If that kind of ‘wage settlement process’ gets calibrated to the inflation rate, then that becomes a new driver of price increases,” said McKitrick. He called this phenomenon a “wage-price spiral,” and it is similar to what happened during America’s inflation crisis during the 1970s.

If people keep expecting inflation to go up and are able to get pay raises out of their bosses to keep up with the inflation rate, then the inflation crisis won’t actually end. Payroll costs will keep getting taken into account when calculating the final price of products.

“You never get rid of inflation as long as people expect inflation to be there,” said McKitrick.

Learn more about inflation in the United States at Inflation.news.

Watch this episode of “The American Journal” by InfoWars as host Harrison Smith talks about how the economy is collapsing.

This video is from the InfoWars channel on Brighteon.com.

More related articles:

• Yellen proposes temporary federal gas tax “holiday” to combat inflation (why not make it PERMANENT?).
• ANOTHER economic blow: Fed enacts largest rate increase since 1994, markets respond by  collapsing further amid worsening ‘Bidenflation.’
• INFLATION REPORT: Wholesale prices rose 10.8 percent over the past year.
• Surveys: Consumers are saving less and acquiring more debts due to inflation.
• Wall Street analysts: Fed to hike interest rates more aggressively in bid to address soaring inflation.

Sources include:

• TheEpochTimes.com
• WSJ.com
• Bloomberg.com
• Brighteon.com
• NATURAL NEWS