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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old tradesman
Jan 15, 2013 - 10:33am

quote for the day

“If there is no free conversation human aggression accumulates. A man who listens only to his radio or is caught by the hypnotism of the movies must discharge his aggression somewhere else. But the civilizing sublimation of conversation does not reach him, so he cannot get rid of his aggression.

People have learned to be silent listeners. Dictatorship asks only for silent citizens. If man cannot redeem himself of his everyday tensions through words, the archaic primitive demands within him grow more and more awake. The world falls prey to his accumulated obsessions, and in the end collective madness breaks through. Let us talk now, so that we do not become mad animals!” – Dutch-American psychoanalyst Joost A. M. Meerloo, from “Conversation and Communication.”

القراع عصفور
Jan 15, 2013 - 10:20am

Choco

my favorite dog command is from the movie Stand by Me, but I don't know how to translate it to German.

"Sic balls, Chopper!" , Chopper being the name of the dog.

as far as the off topic stuff. it would be a lot more tolerable if it were not almost always so partisan. and calling people liberals on a site dedicated to hard money, and the precious metals is ridiculous. when is the last time a so called "liberal" posted here. the site is suffering from a form of groupthink, that increasingly is shifting the discussion further right politically. just as the Republican party has shrunk itself out of business with intolerance of viewpoints, so too will this site. it is important to take politically charged stuff to the forums. the main page must be an open and welcoming forum if Turd wants to grow this site. don't read more into this than there is. i really am only referring to a small but vocal group here.

Mr. Fix
Jan 15, 2013 - 10:12am

There will not be any German gold repatriation.

The entire notion that Wall Street, and the Fed, are going to pack up thousands of tons of gold that they have already stolen fair and square and ship it off to Germany is a nonstarter. Hard to say exactly how this is going to play out, but I suspect that some “behind the scenes” negotiations have just failed. Just the fact that they have gone public with this announcement does not mean that this is a game changer, it is a game ender. And yes, this will not end well.

ancientmoneyrocoach
Jan 15, 2013 - 10:11am

@rocoach . . . But what about silver?

I have a theory. We know silver is in short supply--likely the shortest above-ground, available supply in the last several hundred years.

We also know that the silver price has been suppressed via paper COMEX contracts for a decade, at least. The current price is 40% below its 1980's all-time high while gold is 200% of its 1980's all-time high. For silver, comparatively, think a beach ball pushed down a mile below the surface.

There will come a breaking point in silver's price as supplies run close to zero, for all intents and purposes. However, I agree with Mr. fix and others that we will not see that rise while COMEX trading/SLV exist. Any silver that exists in SLV when the plug is pulled will default to its custodian, JPM.

Maybe this gold intrigue vis-a-vis Germany is the spark that lights the fuse for silver. They always seek cover for the tricks they pull. In any case, asusming my current theory is wrong re: the German gold fuse, the only way anyone can help themselves in any way, when the great reset happens, is with physical gold and silver.

ChocoHotDogBoswell
Jan 15, 2013 - 10:08am

@Boswell

Google is good to get a grasp of certain things, however as much as Google wants to take over the world it still comes up with komisch translations :-)

"Setz sich hin, Hunde! Nimm Platz!"

Just imagine this with a really funny accent, or this kid saying it: https://www.youtube.com/watch?v=PbcctWbC8Q0

I hope you've trained your pups on the proper way to treat PM thieves, both the official and unofficial kind.

Fr. BillChocoHotDog
Jan 15, 2013 - 10:08am

@ChocoHotDog re: "Turd" in German

ChocoHotDog wrote:
Better is: "Du bist ein Mensch, Turd".

Even better is "Du bist ein Mensch, Scheiyhaufen."

Groaner
Jan 15, 2013 - 9:57am

The miners are getting stronger now.. good sign

maybe the hedge funds will get smart and move a few pennies into them from Apple.

So It Goes
Jan 15, 2013 - 9:49am

Well there goes those damn algos again

These patterns are really obnoxious - algos fighting with each other.

Same pattern for the past 3 trading sessions.

Many people in NY just don't like gold - so eff them.

Keep stacking - we will be vindicated soon.

Northern Border
Jan 15, 2013 - 9:45am

Sorry for going off topic yesterday/Everything is linked

Turdites,

My apology for going off topic with my video post yesterday on Sandy Hook and how the .gov is more than likely responsible for this.

This situation is linked to the "Ending of the great Keynesian experiment." The same Powers that be, cartel et al are controlled by the same puppet masters that manipulate the metals market that is discussed daily here to keep the illusion alive that "everything is ok" for the sheeple to remain calm.

The whole thing stinks for the start. Friends and I have discussed this in detail since the very first day of it being reported and said this does not pass the "Smell test."

Oh yeah, the Germans wanting the gold back, that is a big deal.

In the words of Cypress Hill, When the shit goes down, you better be ready.

Off to the LCS and to scrounge any ammo I can find at the stores. Things are increasing at a rapid pace !

NB

GroanerMantis
Jan 15, 2013 - 9:38am

probably.. this is getting real old..

How long can they keep this up..I mean down!

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