A central banker's worst enemy...

 Gold is a central banker's worst enemy...

Central bankers print money and expand the money supply. Gold used to back global currencies, keeping central bankers from easing credit. Today, gold should rise as people lose faith in central bank-debased paper money.

Still, despite allegations of gold being a barbarous relic, central banks want it back...

Just this month, former Federal Reserve Chairman Alan Greenspan said at a meeting sponsored by the Council of Foreign Relations think tank...

Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it. Why do central banks put money into an asset which has no rate of return, but cost of storage and insurance and everything else like that, why are they doing that? If you look at the data, with very few exceptions, all of the developed countries have gold reserves. Why? The reason is, you'll find it fascinating on exactly this issue, because here you have the ultimate test at the Mount Washington Hotel in 1944 of the real intellectual debate between those who wanted to go to an international fiat currency, which was embodied in John Maynard Keynes' construct of a banker, and he was there in 1944, holding forth with all of his prestige, but couldn't counter the fact that the United States dollar was convertible into gold and that was the major draw. Everyone wanted America's gold.

So why do central banks want to hold gold as reserves? Gold provides confidence and credibility... the perception by individuals that their fiat currency is backed by something of value.

 In January 2013, German central bank Bundesbank tried to repatriate 300 tons of the 674 tons of gold it stored outside its borders. The goal was to get the gold back by 2020.

Germany has the second-largest gold reserves in the world after the U.S. (which has 3,386 tons). And Germany holds 80% of its gold domestically. But Germany wanted the foreign gold back home.

After a year of trying, Germany was only able to repatriate 37 tons of gold, five of which came from the New York Federal Reserve and 32 from France. After a while, Germany gave up.

According to Deutsche Bank, Germany's largest commercial bank, "diplomatic difficulties were likely the chief cause."

 Germany wasn't the only country looking to get its gold back. Netherlands' central bank De Nederlandsche Bank (DNB) recently shipped 122.5 tons of gold from New York to Amsterdam.

DNB wanted to change its geographical allocation of gold. Previously, it kept 51% in New York, 20% in Canada, 18% in London, and only 11% in Amsterdam. Now, DNB keeps 31% in Amsterdam, 31% in New York, 20% in Canada, and 18% in London.

According to the Dutch De Telegraaf newspaper...

The DNB expects Dutch citizens to be more confident that enough of our gold is in their own 'home' to guide the country if necessary following major crises.

 And soon, France may be looking to get its gold back, too...

French politician Marine Le Pen sent an open letter to Banque de France (France's central bank) demanding French gold be repatriated.

Le Pen's party, the Front National, came first in May's European parliament elections. She currently leads in the polls to be the next president of France.

Le Pen wants to immediately halt further gold sales and do a complete audit of France's 2,435 tons of gold... both in terms of its quality and who it is leased to.

In addition to repatriation, Le Pen also wants to keep 20% of France's foreign reserves in gold.

France has $145 billion in foreign reserves. If it kept 20% in gold as reserves, it would need another 750 tons of gold... or $29 billion.

Le Pen said the gold reserves are "the ultimate guarantee of public debt and our currency."

 Soon, Switzerland may also be required to keep 20% of its reserves in gold.

On November 30, the Swiss will vote on the topic. If approved, the Swiss National Bank would have to lift its gold holdings by 1,500 tons over the next five years.

Based on recent poll results, we don't think the referendum will pass... But it's a clear trend: Governments around the world are concerned about fiat currency. And they want more gold.

 Western countries aren't the only ones looking to back their balance sheets with gold...

Despite its economic and political problems, Russia continues to stockpile large quantities of gold... It purchased 55 tons in the third quarter alone. Russia now holds nearly 1,200 tons of gold in reserves.

Meanwhile, the Shanghai Gold Exchange is delivering 60 tons of gold per week into China... And India imported 94 tons of gold in September.

 All of the gold in the world would fill around two Olympic-sized swimming pools. With such little supply and increasing demand – coupled with central banks committed to devaluing paper currency and governments spending beyond their means – you have a dangerous situation setting up in gold.

It's not a matter of if... it's a matter of when. Central banks are in unprecedented territory. Eventually, the bubble will burst... and gold will soar.

 As Porter explained in Friday's Digest...

So what should you do? First and foremost, realize that we are in the late innings of an enormous global bubble. The banks have propped it up with a printing press. But it can't go on forever. All around the world, credit structures are in place that can only function as long as the central bank buying continues. The United Kingdom, for example, owes foreign creditors $10 trillion... more than 400% of its GDP. Spain owes foreign creditors $2.3 trillion – 167% of its GDP. Italy owes foreign creditors $2.6 trillion – more than 100% of its GDP. Central banks have proven adept at keeping these ridiculous credit structures in place. But there is a cost. And sooner or later, something will break... because capitalism doesn't work when there's no cost of capital... And there is an abundance of signs of greed all around the market... from electric-car maker Tesla's share price to the nominal yield on junk bonds. Make sure you don't get swept up in the euphoria. Remember how fragile the world's banking system is... And make sure to buy a little physical gold this year.

 Should you be loading up on gold today? That depends on how much you already own. We always recommend holding at least some physical gold as a form of "insurance" that you hope you never have to use.

With gold trading at less than $1,200 an ounce today, we think here is a good entry point for anyone looking to start building a position.

 One of the most frequent questions we receive in our mailbag is where to buy physical gold. We recommend dealing with Van Simmons at David Hall Rare Coins. You can call Van at 1-800-759-7575 or e-mail him at van@davidhall.com.

We also recommend Rich Checkan at Asset Strategies International. You can reach him at 1-800-831-0007 or e-mail at contactus@assetstrategies.com.

We receive no compensation for recommending Van or Rich to our subscribers. But they have given our readers excellent service for years.

 We'll close today's Digest discussing another precious metal – platinum.

Platinum usually trades at a premium to gold... For one, the metal is about 20 times more rare than gold. And around 80% of platinum is used in automobiles (in catalytic converters).

Plus, nearly all of the world's platinum is mined in three countries – Zimbabwe, South Africa, and Russia. As we like to say, going long platinum is like going long political instability in Russia and South Africa – a safe bet.

 Platinum hit a 52-week high of $1,550 an ounce in late August. It has since cratered to less than $1,230 an ounce – almost even with gold, which is around $1,200 an ounce today.

When platinum gets as cheap as gold (or even cheaper), it's usually a good time to consider buying...

 If you want the best explanation of what's happening in our economy today – and what to buy to protect yourself from the global monetary experiment – you should read currency expert Jim Rickards' book, The Death of Money.

Jim is one of the smartest people in the world when it comes to this topic. He has spoken at two events we've hosted... And the audience always wants to hear more.

In his book, Jim spells out the arguments for deflation and inflation... He also explains why inflation will win. We thought this book was so important that we ordered several thousand copies. We even convinced Jim to write a special chapter for Stansberry Research readers telling you the assets he recommends you buy today.

Jim's book can be yours for free. All we ask is that you pay less than $5 to cover the shipping and handling. To get your free copy, click here.

 Have a great Thanksgiving. As we noted earlier this week, we will not publish the Digest tomorrow. But we have a special Digest planned for Friday... to read while you eat your leftover turkey sandwich.

 New 52-week highs (as of 11/25/14): Deutsche X-trackers Harvest China A-Shares Fund (ASHR), Becton Dickinson (BDX), Berkshire Hathaway (BRK), Cisco (CSCO), WisdomTree Japan Hedged Equity Fund (DXJ), Express Scripts (ESRX), Intel (INTC), AllianzGI Equity & Convertible Income Fund (NIE), Pepsico (PEP), PowerShares QQQ Fund (QQQ), and ProShares Ultra Health Care Fund (RXL).

 Nothing much in today's mailbag... We'll pick back up with your questions and concerns again on Monday. Send your thoughts to feedback@stansberryresearch.com.

Regards,

Sean Goldsmith and Bill McGilton

November 26, 2014