I admit. My response to a recent interview is overdue. Last year, the Dutch financial newspaper Financieel Dagblad (FD) published an interview with Aerdt Houben, director of Financial Markets at the Dutch central bank, De Nederlandsche Bank (DNB), discussing that beautiful shiny precious metal we are so interested in: gold. Of course, there has been enough commotion about DNB and its gold reserves. DNB repatriated, for instance, in utmost secrecy over €4 billion euro worth of gold from New

In less than two weeks, the Dutch will go to the ballot box. Just a month later, on April 23, the French will follow suit. They will have to vote in a first round who their new president will be to, later, on May 7, during the rather likely second round make their final decision on who will become the new president of the French Republic. After two months of ballot box peace, the French will then go on June 4 and 11 again, but now to vote for parliament. Late September it will be the Germans;

The central banks of the three developed economies – the U.S., the Eurozone and Japan – have expanded their balance sheets tremendously over the past decade. More than $12.2 trillion of financial assets now sit idle on their balance sheets. One of the consequences is that the central bank’s traditional toolkit has become obsolete. Central bankers count on one tool and one tool only. However, the effectiveness of this tool, especially in times of high and increasing inflation, is completely shrouded in mystery. Balance sheet reduction is one possible way to shrink the balance sheet so that traditional tools might be used, but how? And what are the consequences?