Germany, France and Italy also prepared for new gold-backed currencies.
In a recent interview with Aerdt Houben, Director of Financial Markets for the Dutch Central Bank (DNB), enlightening details were shared about the Netherlands’ readiness to introduce a new gold-backed currency if the current fiat financial system were to collapse.
The DNB currently holds a substantial amount of gold, totaling 612 tonnes valued at around €35 billion, securely stored in four locations worldwide.
In times of extreme financial instability, the value of gold reserves would rise significantly relative to fiat currencies, providing a robust safety net for the country’s financial system.
This gold reserve plays a crucial role in ensuring the stability and confidence of the nation’s currency. Historically, the Netherlands had its currency backed by gold, allowing people to exchange banknotes for physical gold, a practice that provided a solid foundation for financial security.
Under previous monetary systems, such as the Bretton Woods agreement, the Dutch guilder’s value was tied to gold through the US dollar, contributing to the accumulation of surplus gold reserves.
Gold is considered a stable and valuable asset compared to traditional paper money, making it the appropriate choice for central banks as a safeguard against financial crises.
The DNB regularly evaluates and adjusts its gold reserves to align with global trends, striking a balance between protecting against systemic fiat system risks and maintaining an appropriate level of reserves.
Despite reducing its gold stocks in the past to match levels of other European countries, the Netherlands’ gold holdings remain at about 4% of its GDP, similar to countries like France, Germany, and Italy.
Also see: Europe’s Gold Agreement and Plans for a Gold Standard Currency (Part 1)
In times of extreme financial instability, the value of gold reserves would rise significantly relative to fiat currencies, providing a robust safety net for the country’s financial system without requiring full coverage.
The decision-making process regarding gold reserves is a collaborative effort between the DNB and the Ministry of Finance, ensuring a coordinated approach to managing risks and maintaining financial stability.
By carefully managing its gold reserves and learning from global experiences, the Netherlands is well-prepared to face a fiat financial system collapse with confidence.
When the need arises, the country is equipped with a solid foundation of gold reserves to support the issuance of a new gold-backed currency, ensuring financial stability and security in a fiat currency collapse.
Supporting article: Dutch Central Bank Admits It Has Prepared for a New Gold Standard
