Japan, you're next

As expected, Netherlands didn't last very long in the number eight position of the official world gold holdings as tabulated by the World Gold Council and as modified here to include the streetTRACKS Gold Shares ETF (NYSE:GLD).
The combination of recent sales by the Dutch and the steady creation of GLD shares lately (another 10 tonnes in the trust as of the close of business today) made this one all too easy to call, as was done here just a couple weeks ago.

With the gold ETF (a.k.a. the common man's sovereign wealth fund) now 138 tonnes behind the amount of gold reserves held by the central bank in Japan, at first glance you might think it would be some time before GLD moves into the lucky number seven spot, however, it may not take very long at all.

Based on the current rate of growth, as shown in the chart below, it will be only about five more months before the last major Asian central bank with a pitiful percent of reserves held as gold bullion is surpassed by the gold ETF.
You'd think that China and Japan would, at some point, want something more tangible than dollar-denominated treasuries, GSE debt, or stakes in U.S. financial companies in exchange for the U.S. dollars that accumulate after trading with us Americans - we probably would if we were the ones with mounds and mounds of yen and yuan piling up in our vaults.

Full Disclosure: Long GLD at time of writing.



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