This is a Big Deal

166
Mon, Jan 14, 2013 - 11:23pm

For now, it's just a ZeroHedge report, based upon the reporting of the German website, Handelsblatt. The report says that an announcement is due on Wednesday. So I guess we'll know for sure in about 24-36 hours.

Here's the original report:

https://www.handelsblatt.com/politik/deutschland/reserven-bundesbank-will-deutsches-gold-zurueckholen/v_detail_tab_print/7629600.html

Though Turd is officially 5/8 German by descent, my working knowledge of the language is limited to danke, bier & lederhosen. Perhaps there's a German or otherwise European Turdite out there who would care to translate the text for the community at large?

ZH also did their own translation and analysis. Below is a link but, since it's so potentially important, I'm going to c&p the entire article, too. I hope that the Tylers don't mind too much.

This "event" could seriously rattle not just the gold market in the next few days. Pay close attention and watch for furter headlines.

TF

https://www.zerohedge.com/news/2013-01-14/it-begins-bundesbank-commence-repatriating-gold-new-york-fed

In what could be a watershed moment for the price, provenance, and future of physical gold, not to mention the "stability" of the entire monetary regime based on rock solid, undisputed "faith and credit" in paper money, German Handelsblatt reports in an exclusive that the long suffering German gold, all official 3,396 tons of it, is about to be moved. Specifically, it is about to be partially moved out of the New York Fed, where the majority, or 45% of it is currently stored, as well as the entirety of the 11% of German gold held with the Banque de France, and repatriated back home to Buba in Frankfurt, where just 31% of it is held as of this moment. And while it is one thing for a "crazy, lunatic" dictator such as Hugo Chavez to pull his gold out of the Bank of England, it is something entirely different, and far less dismissible, when the bank with the second most official gold reserves in the world proceeds to formally pull some of its gold from the bank with the most. In brief: this is a momentous development, one which may signify that the regime of mutual assured and very much telegraphed - because if the central banks don't have faith in one another, why should anyone else? - trust in central banks by other central banks is ending.

Much more importantly, it is being telegraphed as such, with Buba fully aware of just what the consequences of this (first partial, and then full; and certainly full vis-a-vis the nouveau socialist regime of Francois Hollande which will soon hold zero German gold) repatriation will be in a global monetary arena, which is already scraping by on the last traces of faith in a monetary system that is slowly but surely dying but first diluting itself to oblivion. And in simple game theory terms, the first party to defect from the prisoner's dilemma of all the bulk of global gold being held by the Fed, defects best. Then the second. Then the third. Until, in this particular case, the last central bank to pull its gold from the NY Fed and the other 2 primary depositories of developed world gold, London and Paris, just happens to discover their gold was never there to begin with, and instead served as collateral to paper gold subsequently rehypothecated several hundred times, and whose ultimate ownership deed is long gone.

It would be very ironic, if the Bundesbank, which many had assumed had bent over backwards to accommodate Mario Draghi's Goldmanesque demands to allow implicit monetization of peripheral nations' debts has just "returned the favor" by launching the greatest physical gold scramble of all time.

From Handelsblatt:

Die Bundesbank hat ein neues Konzept ausgearbeitet, wo sie künftig ihre Goldreserven lagern will. Nach Informationen des Handelsblatts (Dienstausgabe) sieht dieses Konzept, das am kommenden Mittwoch bekanntgegeben werden soll, vor, den heimischen Standort aufzuwerten, in New York dafür weniger Gold zu lagern und überhaupt kein Gold mehr in Paris zu horten.

Derzeit lagert das Gold der Bundesbank ihren Angaben zufolge in New York, London, Paris und Frankfurt. In der amerikanischen Notenbank Fed lagern 45 Prozent der insgesamt 3.396 Tonnen Gold, in der Bank of England in London 13 Prozent, in der Banque de France in Paris elf Prozent und im Hauptsitz in Frankfurt 31 Prozent. Diese Verteilung soll sich nun ändern.

We present it in the original for fear of losing something in translation, but in the above reads as follows:

The German Bundesbank is developing a new approach as to where its gold will be stored. According to exclusive information, to be fully announced on Wednesday, the bank will in the future hold less gold in the New York Fed, and no more hold in Paris (Banque de France). As a result, the distribution of German gold, of which 45% is held in New York, 13% in London, 11% in Paris and 31% in Frankfurt, is about to change.

There is no need to explain why this is huge news (for those who have not followed our series on the concerns and issue plaguing German gold can catch up here, here, here, here, and certainly here) . At least no need for us to explain. Instead we will let the Bundesbank do the explanation. The following section is the answer provided by the Bundesbank itself in late October in response to the question why it does not move the gold back to Germany:

The reasons for storing gold reserves with foreign partner central banks are historical since, at the time, gold at these trading centres was transferred to the Bundesbank. To be more specific: in October 1951 the Bank deutscher Länder, the Bundesbank’s predecessor, purchased its first gold for DM 2.5 million; that was 529 kilograms at the time. By 1956, the gold reserves had risen to DM 6.2 billion, or 1,328 tonnes; upon its foundation in 1957, the Bundesbank took over these reserves. No further gold was added until the 1970s. During that entire period, we had nothing but the best of experiences with our partners in New York, London and Paris. There was never any doubt about the security of Germany’s gold. In future, we wish to continue to keep gold at international gold trading centres so that, when push comes to shove, we can have it available as a reserve asset as soon as possible. Gold stored in your home safe is not immediately available as collateral in case you need foreign currency. Take, for instance, the key role that the US dollar plays as a reserve currency in the global financial system. The gold held with the New York Fed can, in a crisis, be pledged with the Federal Reserve Bank as collateral against US dollar-denominated liquidity. Similar pound sterling liquidity could be obtained by pledging the gold that is held with the Bank of England.

And in case the above was not clear enough, below is the speech Buba's Andreas Dobret delivered to none other than NY Fed's Bill Dudley in early November:

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.

Throughout these sixty years, we have never encountered the slightest problem, let alone had any doubts concerning the credibility of the Fed [ZH may, and likely will, soon provide a few historical facts which will cast some serious doubts on this claim. Very serious doubts]. And for this, Bill, I would like to thank you personally. I am also grateful for your uncomplicated cooperation in so many matters. The Bundesbank will remain the Fed’s trusted partner in future, and we will continue to take advantage of the Fed’s services by storing some of our currency reserves as gold in New York.

Incidentally, what Zero Hedge did provide after this article, was factual evidence that the Buba's very much "trusted partner" had been skimming it on physical gold deliveries on at least one occasion, in "Exclusive: Bank Of England To The Fed: "No Indication Should, Of Course, Be Given To The Bundesbank..."

So we wonder: what changed in the three months between November and now, that has caused such a dramatic about face at the Bundesbank, and that in light of all of the above, will make is explicitly very unambigous that the act of gold repatriation, assuming of course that Handelsblatt did not mischaracterize what is happening and misreport the facts, means the "excellent relationship" between the Fed and Buba, not to mention Banque de France which will shortly hold precisely zero German gold, has just collapsed.

Also, if the Bundesbank is first, who is next?

Finally, once the scramble to satisfy physical gold deliverable claims manifests itself in the market, we can't help but wonder what will happen to the price of gold: both paper and physical?

<end>

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  166 Comments

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SE
Jan 20, 2013 - 6:27pm

Too fucking bad,

Old Tradesman... I'm tired of waiting. You should have bought as much as you could. Let's get this damned show on the road, as I want to pay off everything and get the hell out of the big city.

القراع عصفور
Jan 16, 2013 - 1:41pm

OK Turd

fair enough. i disagree, but it is your site.

"village idiot" OK. coward.

Grigeoالقراع عصفور
Jan 16, 2013 - 12:08pm

Dp / peckerwood

peckerwood - "hope you have made your mother proud. if we ever meet in person, i hope i'm holding a baseball bat."

Peckerwood, considering you are Turdville's resident village idiot, and you are free to post here, maybe you can just put Monedas on Ignore User.

Jan 16, 2013 - 12:04pm

Here you go

I've created a thread for both of you in the Fight Club forum. Have at it!

https://www.tfmetalsreport.com/forum/4443/harald-vs-dp

As for Monedas...He occasionally steps over the line and, when he does, I delete it. In this case, I simply missed it. Too busy in other threads.

القراع عصفور
Jan 16, 2013 - 11:21am

this is an old thread Harald

Turd has said just to keep the OT stuff off the main thread. And I do respect that for the most part. I didn't ask you if I should leave. Your bias is already very clear anyway. "Name your forum...Dude." you sick fuckers really think this is real, don't ya? i am shaking my head in disbelief. what a bunch of cowards.

Harald
Jan 16, 2013 - 11:13am

DP

Aren't you the one who is always whining about too much politics on main street? Since you asked, you're the one who should leave. As the "ladies" on The View used to say about George Bush, "He's not my president." I'm enjoying this but I'm sure it's long past tiresome for everyone else. Name your forum...Dude.

القراع عصفور
Jan 16, 2013 - 10:56am

TURD FERGUSON - GROW SOME BALLS

If it's OK to refer to the president of the United States as a nigger on your site, please let me know. Monedas, in my opinion, should already be banned from the site for his "cunt" post - yeah, that's right Harald. I don't think it's OK to degrade women in public.

Clink, what neo-Nazi hate group to you belong to? Why don't you grow some balls too, and post some pictures from your next clan meeting. Oh wait - the clan didn't want you. They were looking for real men, not pussies hiding behind a computer.

To all you other internet sickos, trolls, and bigots, let's see what Turd says. I just want to know if I am the one that should leave.

The first amendment gives you rights, and RESPONSIBILITIES. Get it? Is that too liberal for ya?

All I want is an answer Turd. Let me have it, if you want, but give me your answer. Thank you.

bern
Jan 16, 2013 - 10:32am

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

ClinkinKY
Jan 16, 2013 - 10:25am

Pic of B.O. Surrounded by "Doctors" For Obamacare Announcement..

-------------------------------------------------------------------------------------------------------------------

This space reserved for pic of B.O. surrounded by "the children" for his announcement today on gun control (and you know it's coming)...shameless.

Oh...wait... the WH has released an "advance photo".

-------------------------------------------------------------------------------------------------------------------

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bern
Jan 16, 2013 - 10:13am

It appears that the

It appears that the Bundesbank released a statement:

The Bundesbank will repatriate 674 metric tons of gold from vaults in Paris and New York by 2020 to restore public confidence in the safety of Germany’s reserves.

The phased relocation of the gold, currently worth about 27 billion euros ($36 billion), will begin this year and result in half of Germany’s reserves being stored in Frankfurt by the end of the decade, the Bundesbank said in a statement today. It will bring home all 374 tons of its gold held at the Banque de France and a further 300 tons from the New York Federal Reserve, it said. Holdings at the Bank of England will remain unchanged.
...
The Bundesbank is negotiating auditing rights with its partner central banks. Thiele said he visited all storage locations last year and the returning gold will be examined. He declined to comment on the cost of the transfers, saying only it is “economically tolerable for the Bundesbank.”

While German gold is stored for free in New York and Paris, the Bank of England charges between 500,000 euros and 550,000 euros a year.

Thiele said the decision to repatriate all German gold from Paris “won’t cause any diplomatic problems” and that Bundesbank President Jens Weidmann and his French counterpart Christian Noyer had discussed the decision.

https://www.bloomberg.com/news/2013-01-16/bundesbank-to-repatriate-674-tons-of-gold-to-germany-by-2020.html

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