00:00Gold, the symbol of wealth, power, and stability, has fascinated people for thousands of years.
00:08Did you know that a very small country in the middle of Europe plays a key role in the gold trade?
00:14You're talking about Switzerland, known for watches, chocolate and gold.
00:19So, welcome back. Today I'll take you on a journey through the world of gold.
00:24I will discuss how Switzerland came to this dominant position, what role it plays today, and what would happen if it were to exit the gold business.
00:35This also makes it clear what an incredible position of power Switzerland holds here.
00:39First of all, without Switzerland, the global gold market as we know it today would be hard to imagine.
00:45But what would happen if this small country closed its doors?
00:49Stick with it, because you will hardly be able to imagine the effects.
00:52Switzerland is the hub of the global gold trade.
00:56But how did such a small country manage to play such an enormous role?
01:01The answer lies in a combination of historical tradition, technical know-how and an incredible financial system.
01:09Switzerland is not only one of the largest importers of raw gold, but also the largest exporter of processed gold.
01:16More than 80% of the gold refined in Swiss refineries is subsequently exported.
01:23Let me illustrate this with some numbers so you can better understand it.
01:28In 2022 alone, Switzerland exported gold worth 100 billion US dollars.
01:34This is an increase of 13.5 billion compared to the previous year and shows the power and influence Switzerland has on the global gold market.
01:43And Switzerland really does export globally.
01:47The most important buyers of Swiss gold include Singapore, Turkey and China.
01:52Last year alone, Switzerland exported over 500 tons of gold to China and Hong Kong.
01:59These are record highs that have not been seen for years.
02:02Turkey has also dramatically increased its imports of Swiss gold.
02:07From 11 tonnes in 2021 to 188 tonnes in 2022.
02:14So more than 17 times.
02:16But gold plays a role in Switzerland not only as an export commodity.
02:19It is also imported in large quantities.
02:22In January 2023 alone, Switzerland imported over 200 tons of gold.
02:28Mainly from the USA, Uzbekistan and Kazakhstan.
02:31This is then refined in Swiss refineries and exported all over the world.
02:36To give you a more precise idea, let's take a look at the historical development of Switzerland's gold exports.
02:42We begin 2019.
02:44Here, gold exports were only 62 billion US dollars.
02:49In 2020, the value already rose to 71.7 billion.
02:552021 to 86.8 billion.
02:58In 2022, it finally reached the incredible high of over 100 billion US dollars.
03:05Just imagine this impressive number.
03:08This is an incredible increase in demand, which shows that Swiss gold has been in extremely high demand, especially in recent years.
03:15And it shows the enormous power that Switzerland holds here.
03:18However, the driving force behind the gold industry in Switzerland is the refineries.
03:22Four of the world’s most important gold refineries are located in Switzerland.
03:26These are known not only for their quality but also for their precision.
03:30The gold refined in Switzerland has a purity of 99.9.
03:35This is the highest possible quality.
03:37A gold coin from Swiss refineries is considered a commitment to quality worldwide.
03:42But let us take a closer look at Switzerland’s enormous power.
03:46According to estimates, approximately 70% of all gold is processed in Switzerland.
03:51This means that Switzerland is responsible for two-thirds of global gold exports.
03:57The absolute majority of all gold has passed through Switzerland.
04:01But that’s not all.
04:03Now comes the most exciting part.
04:04Switzerland is not only one of the most important players in the gold market, it also serves as an arbitrator.
04:10Three of only five refineries accredited by the London Bullion Market Association, or LBMA,
04:16recognized as arbitrators for quality control are located in Switzerland.
04:20This means that Switzerland has an absolute majority here too.
04:23This shows how powerful she is in this situation.
04:27Some even go so far as to claim that Switzerland controls or manipulates the global gold market.
04:33Indeed, one could argue that Switzerland is not only an important and powerful player in the gold market,
04:38but actually controls or even manipulates the gold market and its course.
04:43We have already discussed that Switzerland controls the vast majority of the gold.
04:48Through their refineries and their financial system, they have the ability to manipulate the price of gold.
04:53For example, if Switzerland decides not to export anything for a year, the price will rise enormously,
04:58because they are the largest supplier. If they export more, the price drops.
05:03And that has already happened.
05:04An example.
05:05In 2022, the price of gold rose massively due to changes in gold exports from Switzerland to China and India.
05:13These countries depend on gold to stabilize their own currencies.
05:16Switzerland not only has the power to influence the price of gold,
05:20but also the power to shape the economic policies of other countries.
05:24And the power goes even further.
05:26Through its refineries, it also controls the quality of the gold that goes to the global market.
05:30If Switzerland decides to raise quality standards even further,
05:34all other countries must adapt to this,
05:36that it provides three of the five arbitration refineries.
05:39If it decides instead to lower standards,
05:41This could lead to a loss of confidence in the global gold market and a fall in the price of gold.
05:46Now you understand why some people think
05:49Switzerland would have the power to control the global gold market.
05:52But what do you think about the topic?
05:55Do you understand the power of Switzerland in this situation?
05:58Write it to me in the comments.
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