$600 Billion Hidden at Home: Massive Gold Stash Revealed!
One of the most deep-rooted savings habits of the Turkish people has been put under the microscope once again. It has been revealed that the amount of gold, mostly stored in homes outside the banking system, has reached 5,000 tons, with a monetary equivalent of 600 billion dollars. Experts are proposing new models to inject this colossal wealth into the economy.
The amount of gold stashed away under the mattresses by the Turkish public has reached 600 billion dollars.
Decades of persistent high inflation, the depreciation of the Turkish Lira, and occasional banking crises have only reinforced the Turkish society's affinity for gold. Beyond being a traditional item gifted on special occasions like weddings and birthdays, gold has transformed into a primary safety net for families, serving as a savings tool.
Today, the magnitude of this accumulation has been laid bare with official data. It has been reported that the total weight of gold held outside the banking system, in drawers, safes, and under mattresses, has reached 5,000 tons, which equates to approximately 600 billion dollars at current market value. This figure represents a significant portion of Turkey's annual national income, bringing the issue to the forefront of the economic administration's agenda.
Selva Demiralp, a faculty member at Koç University, states: "This gold does not convert into credit."
Selva Demiralp, a former official of the Central Bank and current faculty member at Koç University, highlighted that gold stashed under the mattress remains outside the economic system. According to Demiralp, this accumulation does not contribute to the economic cycle as it does not enter the banking system and hence, cannot be converted into loans for businesses.
Another dimension of the problem emerges on the import side. It has been reported that the annual gold requirement of the jewelry industry varies between 170 and 200 tons, with 40 to 50 percent of the imported gold being directly used in jewelry production. This situation continues to enlarge the current account deficit as long as the stockpile under the mattress is not depleted.
Public trust in banks has dropped below 40 percent, prompting a suggestion for a solution: the establishment of a Gold Bank.
A recent study revealed that 40% of participants rated their trust in commercial banks as near zero on a scale of 0-10, and gold remains the preferred choice for future savings. This paints a clear picture of the underlying reason why people trust in keeping their gold at home rather than in banks.
Two different models are on the table to address this issue. The first is the YAYSIS model, where physical gold held by citizens is valued through jewelers and the equivalent amount in pure gold is transferred to their bank accounts. The second is a proposal by Mustafa Atayık, the president of the Istanbul Jewelers Association (IJA), for a banking institution specifically for the jewelry industry, dubbed the 'Goldbank'. It is reported that legal, technical, and sectoral preparations are ongoing in collaboration with banking regulators.
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