November 12, 2019

Jan Nieuwenhuijs Joins Voima Gold: A First Interview

For long, we only knew him as “Koos Jansen.” Over the years that alias would, among other things, uncover the true nature and extent of China’s physical gold market. It was such reporting that earned “Mr. Jansen” worldwide preeminence in the gold community. As an introduction, in this interview, you will get to know the man behind “Koos Jansen,” Jan Nieuwenhuijs, and below, you will find a glimpse of what to expect from him. Starting in November, Jan Nieuwenhuijs will join Voima Gold as a resear

So, Jan, could you tell us a little bit about your background? It’s my understanding that you have not always been in the gold. I’ve heard that you use to work in the Dutch movie industry. Is that true? What did you do? How was it like?

That’s correct. After high school, I studied Film and TV Science for a couple of months at the University of Amsterdam but soon realized that theorizing about movies was not for me. I decided to do a course in sound engineering at the School for Audio Engineering. I was DJ-ing at the time, and I wanted to become a music producer.

At the same time, I was working in the movie industry as a production assistant. One day the assistant of the sound mixer (head of the sound department on set) got sick, and I was asked to replace him because I was studying sound engineering. For his next movie, this sound mixer asked me as his assistant again. After a few years of assisting, I got a loan from the bank, bought my own equipment and became a sound mixer myself.

The job is a lot of fun. It’s mostly about problem-solving: the director of photography decides on the frame and what lens he uses, and the sound mixer has to record—or, say, create—the sound that corresponds to the picture, while thinking of all sorts of possibilities to hide boom-mics and radio-mics for dialogue, and sometimes extra mics for ambient sounds.

Recording sound can be easy, for example, a close-up of one actor on a set where there’s no background noise and perfect acoustics. Alternatively, it’s extremely difficult, for example, if the camera operator walks through a set shooting multiple actors that wear clothes unsuited for radio mics, and windows showing reflections of the boom-mic surround the place. What do you do? Where to hide mics that record the dialogue in the right quality so it can be played on large speakers in cinemas? I liked these challenges; it was very technically creative. It was also very divers: I traveled the world and I met new people every day.

At some point, you stopped working as a sound mixer in the movie industry? What happened?

In 2013 I got a surgery for my knee due to an old windsurf accident. After the surgery, a rare form of chronic pain developed. Basically, I couldn’t do my job as a sound mixer anymore. A long and painful period started in which I had to learn what chronic pain was and how to cope with it. I started to practice Vipassana meditation, which helped, among other things, I never did before, like yin yoga. I mention this because it made me open-minded.

A few years earlier, the Great Financial Crisis (GFC) had revived my interest in economics. The benefit of having chronic pain and not being able to walk was that I could read more financial blogs and books while sitting at home.

I can recall that in the early 1990s, the US dollar kept sliding against the Dutch guilder. I must have been ten years old but told my dad I wanted to exchange my savings into dollars. And so he took me to an exchange office, and I got $170 for my guilders. Of course, a year later, I wanted to buy new roller-skates and had to sell my dollars at a loss. Finally, in 1998—a couple of years later but a lifetime for a kid—the dollar strengthened again. That was my first lesson in economics.

But it certainly wasn’t your last lesson in economics. After all, you soon discovered the writings of Ludwig von Mises and other so-called Austrian economists. How did that happen? Did someone recommend some literature? Or was it a coincidence?

I was fascinated by the damage and impact the GFC was causing, and now having some spare time, I started searching for answers. I wanted to know what exactly money is, how fiat money is created, how banks work, how the economy works.

It was a very inefficient quest at first as I had no idea where to find the information I was looking for. Through blogs, I started reading about Austrian economics. This school of thought attracted me because it rests on the idea that the value of a product derives from its utility, and this utility is different for every human being. Value, therefore, is completely subjective. Second, what resonates with my logic is that the free market should have the biggest say in the pricing of all goods and services. That is not to say I’m against governments, I just think “endless” interventionism by central banks, even though implemented with the best intentions, distorts the price mechanism (which causes misallocation of capital), and eventually damages the economy. If one doesn’t allow the market to correct itself, underlying distortions in the market will keep increasing.

What more specifically made you interested in gold?

After reading into it, I found that fiduciary money, often referred to as fiat money, loses its purchases over time, but gold doesn’t. Although gold’s purchasing power isn’t perfectly constant (nothing is) and can be volatile in the short term, fiduciary money is designed to lose its real value over time. And it’s prone to be abused by authorities, which ultimately can lead to a total collapse in real value.

Gold is immutable, has no counterparty risk, cannot be “printed” by governments, and is universally accepted. The GFC looked to me like a systemic crisis. I was wondering what type of money could protect people’s purchasing power and—more importantly—could serve as an anchor for a new, more sustainable monetary system. Throughout history, gold has always been a store of value or used as official money. I’m not under the pretense that I know how exactly a future monetary system should look like, but as an individual, it made sense to me to put a portion of my savings into physical gold stored outside the banking system.

You gained some notoriety for your articles on the Chinese gold trade. How did those articles come about? What made you interested in the Chinese gold exchange?

In 2013 I came in contact with a gentleman from Hong Kong on Twitter. At the time, some analysts were publishing the “delivery” numbers from the Shanghai Gold Exchange (SGE), which seemed incredibly high. My Hong Kong source told me that the data on the Chinese website of the SGE was not only showing “delivery” numbers (which actually are not that important) but also “withdrawals from the vault.” I couldn’t believe the numbers so the next day I called the SGE. To my very surprise, they confirmed the numbers.

And what was it that you uncovered about the Chinese gold exchange?

Due to how the People’s Bank of China designed the Chinese gold market, I discovered that the gold amount withdrawn from the SGE vaults equaled Chinese wholesale demand. By cooperating with sources in the mainland, I was able to analyze the mechanics of the Chinese gold market, including cross-border trade rules and the central role the PBOC gave the SGE. Additionally, from customs data, I could trace thousands of tonnes of physical gold being exported from London to Switzerland, to Hong Kong, and eventually to the mainland. The amounts matched the volumes of metal withdrawn from the SGE vaults. I proved that SGE withdrawals equaled Chinese wholesale gold demand. For quite a few years, my work was fiercely countered by commercial entities that had simply missed these developments in the Chinese gold market. But it was all just politics. Currently, everyone agrees on the workings of the Chinese gold market, with my initial analysis that is.

That analysis gave me a job in the gold industry and quite some exposure, after which I could also research and write about other segments of the gold market for a wide audience. For years, I wrote my reports under the alias “Koos Jansen.”  

How would you describe your methods?

Common sense and logic combined with flexibility. I start with facts, not assumptions or ideologies. When researching, my attitude is always that I’m indifferent to the outcome, instead of seeking confirmation bias. I go to the source itself. In the case of the Chinese gold market that involved, inter alia, me hooking up with sources on the ground and translating laws by the State Council to complete a full circle analysis. Whenever I bump into new evidence, I’m always willing to throw out any previous theories. In my mind, this flexible approach has stopped me from having a limited and biased understating of the gold market in 2010 to a thorough and more objective understanding of gold in 2019. Einstein spoke about this when he said, “intelligence is the ability to change your mind.”

I spend a lot of time on Twitter, where I like to debate. For me, that’s just a way to learn and progress. In any debate, it’s not my goal to be right, but letting our best arguments compete and jointly come to a better understanding of the world around us. If someone presents an argument against mine that makes sense, I don’t restrict myself from embracing it and adjusting my views.

So now, you’re a researcher and investigative journalist for Voima. How did that happen? What brought you to Voima?

Sam Laakso, Voima’s sales manager, approached me on Twitter. He said he liked to have a Skype chat about the gold market. During that conversation, he told me he worked for a Finnish gold dealer, and the idea surfaced that I would write for Voima.

So what are you working on now?

I’m working on a full circle analysis of the mechanics of the global gold market, including supply and demand dynamics, the physical markets, derivatives markets, ETFs, and cultural differences. I want to show how all this relates to the price of gold. It will be similar to my analysis of the Chinese gold market but now global. I think there are many misunderstandings about certain elements of the gold market. This research will reveal an at least 80-year-old pattern I found in the gold market, which will be very valuable for the future as well. Having a foundation, I can and will write many other analyses about the gold market, the price of gold, and economics.

I say full circle because, in the real world, everything is connected. So all my articles about certain segments of the market have to be compatible with each other.

Other research will be about Special Drawing Rights (SDRs) and if these could potentially serve as the new world reserve currency (spoiler: no), the Turkish gold banking system, the history of gold and the origins of money, the roots of Modern Monetary Theory, and the audits of Fort Knox—among other topics.

The audits of Fort Knox? Could you tell us more about the background to this article?

For many years, I’ve researched the audits of the US official gold reserves, and I’ve written several posts on it in the past. Currently, I have some new evidence that puts these audits in a very shaky position. I won’t comment on if I think Fort Knox carries less metal than is disclosed by the US Treasury, my focus at this stage is solely on the audits. According to my analysis these have been executed with, let’s say, an inadequate degree of integrity, and are thus invalid.

Fascinating stuff. Thanks! When can we expect your next article?

November 22, and I’ll kick off with a post on central banks and Exter’s Pyramid, under my real name. Henceforth I will only publish under my real name, Jan Nieuwenhuijs.

Addendum: Jan Nieuwenhuijs’s first article on central banks and Exter’s Pyramid will be published on November 25.

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