Brexit Forensics: The gold export illusion

Of all the big Brexit claims we've heard, there's one that has so far gone unchallenged: the notion that Britain now

export

s far more outside the EU than within the EU, but what if this isn't true either? entirely correct? To clarify things, I have traveled. Nevada may be 5,000 miles from London, but there is one important thing that links Britain and this part of the US:

gold

, if we look closely enough, the answer to what's really going on with the numbers UK trade could be found here somewhere underground. This is the Cortez

gold

mine, the largest in North America.

They've been digging in the ground here since the California Gold Rush, but things have moved on a bit since then. This is mining on a scale you can barely imagine. Take a close look at this excavator. I can see it's taller than the three story house, a minibus could easily fit inside that cube, between them, those trucks move rocks and dirt that weigh more than the Empire State Building every day and that's just the mine a open pit that also dig deep. into the earth and that is where my journey took me next, even here it is not exactly as you imagine, there is no elevator or veins of gold, but vast tunnels big enough to walk through, you will not see choice axes that we do not have . the midgets down here, you know, the smallest course we have here is 15 feet by 15 feet, it's a pretty big rig, you know, we're driving 30 ton trucks about 2000 feet below ground level right now ago quite hot, a little sticky, this is where it all begins so this is gold, this is drilled, sent to the surface and turned from what looks like rock into that precious metal we all recognize, that's just the beginning of a journey that takes you around the world after digging, smashing and grinding. these huge mills, by flushing them with a cyanide solution, you heat the product to over 1000 degrees and this is what you get molten gold, this is what all that work on the supreme precious metal was about, but in reality that is just the beginning of our story once these gold bars are finished here, cooled and cleaned, they usually take them on a passenger flight to switzerland, there they refine them further to increase the purity and then transfer them to london, why that?

Because it turns out that Britain is the physical gold trading capital of the world, if you think of Heathrow as a major terminal, airport terminal, people can come take a flight from one place, change flights, go to another place, London is known as a terminal market for physical bullion, it is where the gold rests, have a cup of coffee maybe before it goes somewhere else it goes to another place in the world, so as we follow the journey of our bullion gold, this is where they will end up hidden somewhere inside the m25. Now I'm inside one of those high security facilities.

So high security that I can't tell you precisely where we are, but here's the finished article. These are good delivery gold bars in London. They are small but surprisingly heavy and between them they are worth the best part of a million pounds. That's really the gist of this story. Some of these are enough to distort Britain's trade figures, completely changing our perception of the UK's relationship with Europe and the rest of the world - and here's why most of the gold sold in London is then sold. it flies around the world, some to China, some to India, some to Switzerland, to be melted into smaller bars and then shipped again.

What do these countries have in common? They are all outside the EU, so this constant flow of gold in and out of London makes it look like Britain is doing a lot more trade outside Europe than it actually is Sky News Analysis Reveals the Scale of that distortion official trade figures show that in the last five years only 46 of britain's goods

export

s went to the eu but if we leave aside gold, the story is different: in reality, britain exported half of their physical assets to Europe; In other words, we may not be a great trading nation;

We may think we are food for thought as we consider the post-Brexit world a lot. Of London's gold is found here in the vaults beneath the Bank of England. We asked to take a look inside, but again, for security reasons, they only open their doors to dignitaries like the queen. The point is that Britain doesn't own most of it. This gold is not mined or produced and yet when it leaves the country it looks on the surface like a UK export, that's because Britain is the world leader in looking after other people's gold, but does it?

Could that role also be in doubt? it's bad the last remaining refinery in the capital is a small operation that melts scrap into gold bars that it sells mainly to asian investors its boss suspects that london's preeminence as a world gold center may be under threat the market, like everything global commodity type markets are shifting eastward. If we consider extending a tax to the market from the EU or from the United States, all it seems to do so far is take the business to Asia. It is the same worry the city faces: Brexit will undermine Britain's reputation.

For being a good place to bring your money or store your gold, the great irony is that the vast majority of the gold that is extracted from the ground here in the United States will end its life underground somewhere else in the world, but as it comes through from London and will continue to confuse the picture of how much trade we do with the rest of the world Ed Conway Sky News in Nevada