Guest Post: Germany, Gold & 'Diplomacy', by Ned Naylor-Leyland

Our pal, Ned Naylor-Leyland, starts the year off with a bang with this terrific essay.

Thanks, Ned, for sharing this with us!


Germany, Gold & 'Diplomacy',

by Ned Naylor-Leyland

In 2012 the ‘German Gold’ story started to gather momentum. Early that year, Deutsche Bank purchased (in joint venture with G4S) a large site on the outskirts of London, with the intention of building an LBMA-friendly Gold vaulting operation. Deutsche/G4S embarked on a 2-year construction program at the site to build a state of the art warehousing facility. This job was completed when the site went operational in June of 2014.

Just 5 months after completion, on Christmas Eve 2014, Deutsche Bank said (on a slow news day) that their London vaulting facility is now ‘up for sale’. In light of Deutsche Bank’s departure from the London Gold ‘Fixing’ process, and its departure from ‘all physical Precious Metals business’ in 2014, maybe this mooted vault sale isn’t such a surprise.

There is, however, rich and fascinating context to the story of Deutsche Bank, Germany and Gold Custody.

Let’s rewind a little...

Back in November of 2012 Andreas Dobret, executive board member of the Deutsche Bundesbank, said the following in an open speech to the New York Federal Reserve Chairman Bill Dudley:

"Please let me also comment on the bizarre public discussion we are currently facing in Germany on the safety of our gold deposits outside Germany – a discussion which is driven by irrational fears. In this context, I wish to warn against voluntarily adding fuel to the general sense of uncertainty among the German public in times like these by conducting a 'phantom debate' on the safety of our gold reserves. The arguments raised are not really convincing. And I am glad that this is common sense for most Germans. Following the statement by the President of the Federal Court of Auditors in Germany, the discussion is now likely to come to an end – and it should do so before it causes harm to the excellent relationship between the Bundesbank and the US Fed."

Two short months after Mr Dobret’s speech, in January 2013, the Bundesbank did a monumental U-Turn, asking to repatriate 300 tonnes of Gold from the same institution to which it had so publicly declared its faith. So far, it is reported that they have successfully repatriated just 5 of those 300 tonnes in 2 years.

The latest data shows that more Gold has been departing the New York Fed in late 2014, alongside a successful Dutch Central Bank repatriation. If this additional Bullion is found not to have headed to Frankfurt, then there appears to be a monumental ‘diplomatic’ problem. I say ‘diplomatic’, because in November 2014 Deutsche Bank itself stated in a research note that:

"In the beginning of 2013, the Bundesbank announced it would repatriate 300 tonnes of gold stored in the US by 2020. It is well behind schedule, citing logistical difficulties.

Yet diplomatic difficulties are more likely to be the chief cause of the delay, especially seeing as the Bundesbank has proven its capacity to organise large-scale gold transports."

That the Dutch have successfully repatriated 122 tonnes (for context this is 122 of the 166 that left the FRBNY in 2014), from the same black-hole vaults in which the German Gold is apparently stuck, adds a fascinating new twist to the issues of 21st century ‘Diplomacy’ and sovereign Gold reserves.

Once the initial German repatriation request had been placed, in early 2013, many other ‘interesting’ things started to happen in the world of German Gold. Most crucially, the German Financial Regulator (BAFIN) suddenly became a lot more interested in the subject of Precious Metals. Indeed, in 2013 BAFIN paid several visits to Deutsche Bank, interviewing and demanding documents as part of an investigation into the potential manipulation of Precious Metals markets.

Further to this investigation, and after considering Deutsche Bank’s Precious Metals ‘operations’ in some detail, Elka Koenig of BAFIN stated, in January 2014 that:

The allegations about (manipulation of) Precious Metals markets are “particularly serious because such reference values are based -- unlike Libor and Euribor -- typically on transactions in liquid markets and not on estimates of the banks.”

This pointed comment by BAFIN followed on from the imposition of new IOSCO legal principles governing global benchmarks and preceded the total departure of Deutsche Bank from what BAFIN was inferring could be a major financial crime scene. As an interesting aside, it is said by people close to the IOSCO process that the ‘London Gold & Silver Fix’ failed 15 of 19 principles of fair and transparent global benchmarking.

Immediately after this important statement by Elka Koenig from BAFIN, Deutsche Bank announced that it was:

"withdrawing its participation in the gold and silver benchmark setting process following the significant scaling back of our commodities business. We remain fully committed to our Precious Metals business" .

That’s all well and good, however Deutsche Bank manifestly were not, as they put it, ‘committed to their Precious Metals business’. Deutsche Bank’s Head of Precious Metals, Matthew Keen, resigned the next working day following Elka Koenig’s statement about potential manipulation. Indeed, his replacement in that role, Kevin Rodgers, also resigned just three short months later.

Between twice losing the top man in their Precious Metals business, Deutsche Bank also unsuccessfully sought buyers for its London Fix seats (both Gold & Silver), quit as an LBMA forward market maker and quietly stopped contributing data to GOFO calculations. For those who are willing to see, it is fairly self-evident that a serious conversation took place between the Bundesbank and Deutsche Bank about what the Regulator had learned about Precious Metals price discovery and custodial ‘issues’, leading to Deutsche’s wholesale departure from the industry.

The recent spate of European Central Bank Gold repatriation requests, Degussa’s revelation in December that they have seen ‘record demand’ for physical Gold in Germany, and the ongoing ‘diplomatic issues’ with Russia add yet more intrigue to an already bizarre story.

The Germans purportedly moved their Gold to London and New York during the Cold War to keep them safe from the reach of the Soviet Union. Now the Bundesbank appear to want the Gold back (much closer to Russia), just as NATO and Western powers sabre-rattle against Germany’s old foe. You couldn’t make it up.

One might say, on the balance of evidence, that the Germans are now more worried about their ‘ongoing diplomatic relations’ with the US (NSA spying etc) and the opaque LBMA Precious Metals ‘price discovery’ and custodial system, than they are by anything Putin might be up to.

It seems certain that the story of Germany & Gold will be something to watch once more in 2015, not least initially to find out if those paltry repatriation numbers from the New York Fed are in due course updated to Germany’s benefit.

Ned Naylor-Leyland, January 2015 (thanks to R. Manly)




Mr. Fix's picture

1st, and just another day…


RaRaRasputin's picture


It's been a while ;)  And a Ned article to read too - thanks Turd!

Orange's picture

Thanks Ned

Well stated. Hopefully this gets wide exposure and the MSM may finally pick it up. 

Dr. P. Metals's picture

Much to our surprise

2015 looks exactly like 2014, at least we're used to this all by now (price action, news stories, etc etc etc etc etc etc etc etc etc...did I say etc?)

This all only ends when it utterly falls apart, nothing short of a massive disaster of global proportions is going to stop this utter continuing madness...

Dr. P. Metals's picture

This one had me rolling on the floor!

"that the ‘London Gold & Silver Fix’ failed 15 of 19 principles of fair and transparent global benchmarking"

Stated in just such a way as to make one even think that such "fair and transparent" things even exist at all? Really? What's that smell?   Oh, BS.

Orange's picture

Here is another one that should get wide exposure

Does that mean Obummer is an accomplice to murder? If the CIA murdered (execution style in riots) the first protestors last year, then ousted a democratically elected leader and installed extreme Nazis' that are destroying Eastern Ukraine, one can only wonder.

Well, at least the gold disappeared. But, but, the Dutch got theirs. Too bad they are now keeping any findings on who shot down the plane. Of course we already know Putin did not do it. 

the truth is not being aired in the West... many believe foreign elements were introduced by pro-Western factions with CIA fingerprints on it."

SS121's picture

h/t Dr. P

yep, "charts and stories" 

the privately owned charts set the value of everything

and their stories keep everybody believing the charts are legit. time after time after time after time  . . .


Pining 4 the Fjords's picture

Excellent article from Ned!

A Treat for the New Year!  Thank you Ned!

It would be very interesting to contact one or two of the members of the German press who previously reported on the gold repatriation story, and ask them to contact the Bundesbank for a public comment...  i.e., "Given that 'logistical issues' were previously cited to explain why Germany has only received gold amounting to five tons of 300 requested,  what logistical issues precisely does Germany face that the Netherlands does not, since they have somehow been able to take delivery of 25 times the amount of gold Germany has received thus far?"

Iceberg Slim's picture

Great read

Great read and some great points made by Ned...lots of strange behavior and foreshadowing beneath the surface..should be a interesting 2015 as more of the manipulation glue gets un-done.

Pining makes an excellent observation as well (although it's been mentioned before), why do the dutch get apparent "special" treatment when it comes to the repatriation of their gold vs. the germans?

Looking forward to hear more on where those 44 tons from the Fed actually ended up going to. Many have said Germany, and I would agree given the circumstances, but has this been verified/confirmed yet? perhaps i missed it..

AGAU's picture

@Dutch preferential treatment


they are keeping their traps shut about what bought down that Malaysian air liner, obfuscating until the world "forgets" about it (probably a month or so more should be enough for today's sheeple)

SteveW's picture

Dutch preferential teatment

AGAU: 1,000 hat tips.

Fred Hayek's picture

@Dr. P., I think you're missing the point

As part of the further integration of european finance the countries in the EU agreed that things would be run by certain standards to achieve fairness and transparency.  Those are the standards Ned cited.  He's not making it up out of whole cloth or just imagining what those standards should be.  They were drawn up by the EU which doesn't make them good.  It's no secret that there's corruption in the EU and yet by this very flawed organization's standards the gold fix fails, abjectly, in 15 out of 19 measures.

Fred Hayek's picture

The U.S. finance industry SUCKS!

Yes, it well and truly sucks.

See the article at the link below:

For every dollar purloined/"earned" by the U.S. financial industry 60 cents are sucked out of the rest of the U.S. economy.  This is the *only* industry that costs everyone else in the country money with every dollar it makes.  So, yes, the U.S. finance industry sucks.  At least one side of a double entendre should be objectively true.

Dr. P. Metals's picture


I missed no point, thanks though.

SilveryBlue's picture

"Diplomatic difficulties"

Could be the Israeli/Americans putting in a claim on Germanys gold.

And yes the Dutch definitely lucked out on the crash investigation rights.

just my 2c

J Siefert's picture

If Germany wasn't a vassal

If Germany wasn't a vassal state of the US they would be buying gold on the open markets like the Chinese and Russians are. I can confidently assume that is also the opinion of many Germans and other Europeans.

abguy4's picture

RE:The U.S. finance industry SUCKS!

The details and substance of the article are accurate - as far as it goes. But the Post has 'soft-pedaled' the whole topic, but afterall, it is the Post and we dare not offend Our owners on the Street.

In the early years of the 2000's I had the personal experience of having three extended family members graduate with advanced degrees and land positions on Wall St. They are all multi-multi-millionaires now. AND, everyone one of them knew exactly what they were selling their souls for. One of them, on his third and final interview told me that he brought-up, in the conversation, that he was seeing some things that were not exactly like he had been taught in school. His potential boss immediately changed his demeanor and told him;

"Look. there are no cops on the beat. There haven't been any since 2000. We do whatever we deem to make profits. Is that something you can 100% agree to? Make that decision right now. I know you have other offers you can pursue if you have any objections to what I Just told you~!" He took the job, and now he is one of their top producers, (er, criminals).

My point is that these people, like the woman in the article, who claim they were doing, ''god's work'', and "we didn't know~!", are in total denial, and bare-faced LIARS. They got those jobs because they were the top brightest, fast on their feet, and now they want to claim ignorance????

Give me a fkn break......................................

Dr. P. Metals's picture


the long conversation I had in the desert indicated the same: they know perfectly well what is going on with fraud, lies, theft, games, rigged, .01% etc etc, but as long as THEY can profit in/from it, they just don't care. They may not know ALL the tiny details,of the manipulation, bailouts etc, but they absolutely know it's ALL fraud, almost ALL the time. His main justification was: no matter what "new" system you come up with, it will end up the same. I can't disagree with him on that particular point, but I don't use it to justify willful conspiracy to participate.

Fred Hayek's picture

@abguy4 . . Yup. Morals seem to sprout after FU money is had

Thank you for the story.  Sadly, it completely fits my deeply cynical expectations of the financial industry and many of its . . participants.

Isn't it a funny coincidence how the woman in the article just . . discovered . . her morals right around the time that she had accumulated what, to her, constituted F*** Y** money?

Reading any story like that one has to expect that the person being profiled will be more than a wee bit kinder to herself in the retelling than a neutral observer might be.  Oh, in those early days, I was flying around the country helping make goodness bloom!  Yeah, right.  More likely she was flying around signing sucker counties and municipalities to chump deals like those jefferson county Alabama interest rate swaps that were supposed to help them pay for their new municipal sewers but which actually ruined them.  At first, while I was making my money, we would arrange for unicorns to poop skittles over flyover country.  But now that I've got my swag, I notice an icky undertone to everything.  So, bye.  See ya later! 

Kokanee's picture

German Gold

Nice summary Ned!

I think Germany can see the writing on the wall regarding China and Russia accumulating gold. They likely recognize that they will need all they can get before the big shift away from the US$ occurs.

The US knows that Germany is a lynch pin to the EU and thus the status quo of the US$. The more German gold that gets repatriated, the more likely their departure (aka defection) to the other side would become. Not so with the Dutch. Regardless of any leverage they may have from the crash investigation, they are still not as much of a threat to the US since they are a relatively small fish and it wouldn't make any sense for them to jump (at least not until others do). 

This is looking more and more like a bunch of dominos.

infometron's picture

seems appropriate here

Thanks to Craig and Ned for this interesting post, including details I was unaware of.

I'm sure a fellow Turdite may have posted this previously, but it seems particularly appropriate to repost this missive from Bill Holter again here:

Safety Dan's picture

Ken Rogoff Warns Economic

Ken Rogoff Warns Economic Sanctions Don't Work; Fears Violence, Not Bargaining

See this profound comment from this article on Zerohedge:

Despite N Korea apparently being wrongly accused,

the Obama administration is imposing new economic sanctions on N Korea.

Real US motive appears to be to derail reconciliation talks between North and South Korea.

More here:

Now Legal, Declassified Documents Reveal How CIA “Develop” Covert Propaganda “Themes to Push ‘Hot Buttons’ of Americans”

We are continually lied to and deceived by the mass media and our government institutions. Professionally-crafted propaganda techniques to frame the story and, in many cases, to advance totally fabricated events, have been used to goad on the population and gain support for the State, even at the expense of what is best for the people.

The US government does not have a legal right to lie to its people.

And if you want a recent example of this, just take a look at Obama's declared intention to punish North Korea with sanctions about the Sony data breach, which North Korea did not do.

But North Korea was making overtures to South Korea about meeting, at a very high level, to replace the armistice, well over 60 years old this year, with a real peace treaty; and of course, Obama couldn't stand to see that happen, because it would ruin his chances of starting his war against North Korea as a back door to a war with China, because both China's currency and military are on the ascendent.

Safety Dan's picture

(No subject)

View image on Twitter

Safety Dan's picture



Editor's Note: This interview was posted by Jon Rappoport in early January 2002. You will discover by reading it that the very issues we now face of FORCED vaccination of a laboratory-created vaccine to "protect" us against a laboratory-created "disease" (Swine Flu, Bird flu, etc.) was set into motion a long time ago. The vaccine researcher quoted here flat out says that the World Homicide Organization, WHO, is driven by a DEPOPULATION agenda, and that many African leaders know full well that the explosive spread of HIV and AIDS in Africa was caused by WHO-sponsored vaccinations of the 1970s. This former pharmaceutical insider also debunks the widespread ASSUMPTIONS of vaccine "safety" promoted by orthodox medicine, the CDC, the National Institute of Health, state health departments, and their compliant media propagandists who are all parroting SUPERSTITIONS, rather than FACTS. ..Ken Adachi]



Source Article:
Chickenpox Vaccine When Mandated INCREASES Disease Outbreak, South Korean Study Finds

Why, if the vaccines work, is South Korea experiencing year after year increases in chickenpox (varicella) outbreaks as their mandated vaccine uptake (97%) reaches close to universal compliance? 

In 2005, the varicella (chickenpox) vaccine was mandated in South Korean for infants at 12 to 15 months of age. Despite near universal vaccine uptake (97% by 2011)[1], rather than see a reduced burden of chickenpox in South Korea as would be expected, no substantial decreases have been observed there nationwide. Quite to the contrary, the number of varicella patients reported to the Korea Centers for Disease Control and Prevention (KCDC) increased from 22.6 cases per 100,000 in 2006 to 71.6 cases per 100,000 in 2011

The obvious question emerges: If the chickenpox vaccine is effective, why is a population whose vaccination rates have been steadily increasing year after yearseeing increasing rates of breakthrough infection?

This glaring failure of varicella vaccination in South Korea lead a group of Korean researchers to conduct a series of studies to better understand the impact of varicella vaccination in South Korea, the results of which were published earlier this year in the journal Clinical and Vaccine Immunology in a study titled "Varicella and varicella vaccination in South Korea."

The Korean research team conducted a case-based study, a case-control study, and an immunogenicity and safety study, in order to identify the reasons for the failure of the vaccine. The results were reported as follows:

Case-based study: "One hundred and seventy-six children with varicella younger than 16 years of age were enrolled in the study. Among the study groups, 80 subjects (45.5%) were girls and 19 subjects (11.1%) were younger than 1 year of age. The largest number of the patients belonged to the 1-to-4-years age group, with the mean age of 4.6 ± 3.2 years and median age of 4 years." "Among 152 varicella patients who were 1 year of age or older, 139 patients (91.4%) had been vaccinated." [emphasis added]

Case-control study: "One hundred and thirty-five varicella patients younger than 16 years of age were enrolled, their mean age was 4.8 ± 3.2 years, and varicella vaccination coverage rate was 91.7% in patients older than 1 year of age.Breakthrough varicella was confirmed in 82.2% of all enrolled varicella cases, and all of the vaccinated varicella cases were breakthrough infection." [emphasis added]

Immunogenicity and safety study: "A total of 126 healthy children were vaccinated with a single dose of Suduvax (Green Cross, South Korea). Four children lost for follow-up and two children with positive prevaccination FAMA titers were excluded from further analysis. Of the remaining 120 children, the seroconversion rate (varicella antibodies detectable) and geometric mean titers for FAMA antibody were 76.67% and 5.31, respectively (Tables 3 and ​and4).4). Adverse reactions were analyzed for a total of 126 children. Local adverse reactions were observed in 16 children (12.7%), including 12 cases of erythema, 4 cases of swelling, 6 cases of tenderness, and 3 cases of petechiae. Systemic adverse reactions were observed in 15 children (11.9%), including 12 cases of fever, 2 cases of chills, 3 cases of lassitude, and 3 cases of rash which didn't look like varicella. Serious adverse events occurred in three children (2, rotaviral enteritis; 1, acute pharyngitis) but were not judged to be vaccine related.|"

Safety Dan's picture

I'm Older - But Remember Police Who Served & Protected..

Some still do.. but fewer do than when I was growing up.. 


Source: The Burning Platform blog

bp9291's picture

stored gold, treasury notes and theft, default

So it has been speculated on by many how the US plans on squirming out of this economic chaos, are they really this stupid or is there a plan B.  Wondering about how we are pay off these treasury notes and give back the gold that is stored for others.   I have wondered about the huge amount of debt that is owed the US for aid etc by virtually every country on the planet.   Would we say lets apply this to the notes you hold, the gold we store, etc,?   Might be the only (small) leverage we have with a declining dollar, military and economy.  We will never be paid anyway so maybe a wash out would be plan B

SilveryBlue's picture


What do you classify as aide - just for interest sake? (pardon pun)

Wouldn't that aide have to balanced against the riches plundered by the us corporations before any settlement?

I don't count depleted uranium as aide - unless usa wants it back so the books can be balanced? wink

Safety Dan's picture

@ SilveryBlue

I would have to disagree with you about NOT counting depleted uranium as aide..

Do you have any idea how much gold & fiat the US has plundered due to its DU rounds in Desert Storm 1, 2 and Operation Enduring Freedom (OEF) in Iraq and Afghanistan alone? The DU in 105's and other howitzers, A10's (Warthog) cannons and even 50 cal DU rounds, havein part, made that possible.

Throw in the 33 tons of Ukraine's Treasury gold, (using DU rounds, no doubt). Not saying I agree with how the US 'acquired' the gold & fiat. Just indicating the aide of DU. 

DU has been an aide, a tremendous aide to the US, unfortunately for those plundered countries... 

SilveryBlue's picture

So do you want it back or what?

I am sure some enterprising entrepreneur could arrange a collection.

You could recycle it. Maybe sell it to Ukraine as fuel for their old Russian reactors?

Hold on, someone may have stolen my business idea. Damn.


infometron's picture

Why do they hate us?

Hmm, I'd bet using DU munitions hasn't helped:

@SilveryBlue, fyi, the D in DU stands for 'Depleted'

Or perhaps you knew that, and think old Russian reactors can even run on yellow cake.

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