Where is the German Gold?

Wed, Jan 8, 2014 - 1:48pm

Almost a year ago, the German government put in a formal request to reclaim (repatriate) a portion of their gold reserves held outside of Germany. Reports on the progress of this initiative have raised quite a few questions.

Here's the first report, from ZeroHedge and released on Christmas Eve: https://www.zerohedge.com/news/2013-12-24/year-later-bundesbank-has-repa...

At the time the plan was announced, many in the gold community made note that it would take over 8 years for Germany to reclaim this portion of its foreign reserves. Seven hundred metric tonnes...though a lot of gold...should simply be sitting in New York, London and Paris vaults, collecting dust. Why not just brush it off, certify that the bars numbers match up and then ship that shiny stuff back to Germany. No big deal and certainly not something that should take eight years to accomplish.

Now news comes that, in the first year of the plan, Germany only received back 37.5 metric tonnes of their gold. This is only 5% of the total repatriation amount. At this rate, it will take twenty years, not eight, to reclaim the gold.

Further muddying the waters are reports that this gold came exclusively from the vaults of the Federal Reserve Bank of New York (FRBNY). If that was the case, then the gold returned should have been a simple transfer. The Germans deposited the gold there decades ago. It is being shipped back to them now. Problem is, it wasn't a simple transfer!

Apparently, The Bundesbank took the unusual step of having "its" bars assayed, melted and recast into London Good Delivery form before taking delivery. Now, why would they do that? And why would they do this in the U.S. and not in Frankfurt? These bars should simply be the same bars that were deposited decades ago. Do they not trust the FRBNY? Are these not the same bars?

Perhaps, instead, there's another explanation. This idea was first spelled out on the GATA site earlier this week and I urge you to read through this post now: https://www.gata.org/node/13458

In summary, it goes like this:

  • The original German gold held in the U.S. is gone. Leased, sold and rehypothecated many times over.
  • Germany now wants its gold back. The U.S. balks and promises to only return roughly 40 mts/year for eight years. (By the way, why didn't France return any gold in 2013? Germany's looking for 374 metric tonnes from them and, in 2013, it got zilch, zero and nada.)
  • Pressed to come up with gold to ship back to Germany, the U.S. scours it's vaults.
  • The U.S. takes some of it's 1930s-confiscated "coin melt" gold, assayed at 90% purity, and recasts it into 99.5% purity London bars and ships them off to Frankfurt.
  • The Bundesbank books in these new bars, apparently date-stamped "2013", as a "return of German gold" and now awaits the other 95% of their "order".

Hmmm. OK, then. First year done. Whew! Now, from which vault will the U.S. find gold for Germany in 2014? And how about the reserves allegedly held in Paris? When will those be returned? You'd think they could just drive that over in a convoy of guarded trucks. From Paris to Frankfurt is only about a 500km drive. You could do that in under a day. What's the big deal?

(Could it be that there is no German gold in Paris? Coincidentally, it's almost the exact same distance from Paris to Basel, Switzerland. Hmmmm. Maybe the Germans should look for their gold there, instead??)

Anyway, this entire farce just keeps getting sillier by the day. Today, there are reports from Germany that indicate the Bundesbank is quickly backtracking and attempting to retract the "U.S. remelting of bars" story. (https://www.gata.org/node/13472) OK, right. Whatever you say. And don't forget about this fun chart, created for us last year by our pal, Ned Naylor-Leyland:

2014 is going to a consequential year in gold and silver. This German gold story only adds intrigue and fuel for the fire.


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Jan 8, 2014 - 1:50pm

Focus article

Per request of the mayor of Turdville I repost the translation of this article, published in the German magazine Focus: https://www.focus.de/finanzen/news/vermutung-wo-sind-goldreserven-verschwoerer-vermuten-leere-goldtresore-bei-us-zentralbank-fed-8_id_3519983.html

Where is our gold? Conspiracy theorists suspect empty gold vaults in the US

37 tons got repatriated in 2013. Everybody cheered, however that turned out to have been premature: the goal was 50 tons. Why does it take so long? Experts (my emphasis) have an unsettling suspicion.

The article goes on to say that the 37 tons are only worth about a billion Euro, a drop in the bucket compared to our official holdings of 3.4k tons, which equates to about 1200 Euro per citizen in gold (fun fact added by myself: so the Bundesbank holds a little over an ounce per citizen)

Does the gold only exist on paper?

Why is it so difficult to load up a plane and send it over to Germany? There are several conspiracy theories. Some are saying that the Fed only has a fraction of our 1.500 tons, they hold in our name, left in stock. They’ve supposedly least the rest. Some speculate that the whole gold is gone. (they go on to quote James Turk via King World News … I kid you not!)

Are the USA using German gold for trading?

Case in point: they did not ship the original bars back to Germany. The bars they shipped had a 2013 stamp. According to Peter Boehringer (German precious metal association) this is proof that the Americans have used the German gold to trade/lease it. Which, “they would have not been allowed to do, because they were supposed to simply store it for us”. Because of that he asks the Bundesbank to release inventory lists with all bar numbers.

They also quote a market analyst named Dimitri Speck who said “it’s about securing the dollar standard”.

Obviously, there is evidence that there is manipulation in gold like with Libor. The UK as well as the German regulators are currently looking into this.

The first random samples of the gold bars undertaken by the Bundesbank following a request by the German treasury (something like that, the US has no “Rechnungshof” as far as I know) do not support those suspicions. During the first physical inventory in Paris and NY, there have been no issues according to Jens Weidmann at the end of 2013. A prelude to this physical inventory was a huge debate about whether the gold is still there or whether it’s just paper claims.

They go on to quote Weidmann: it’s not about trust, it’s about a restructuring of the physical gold holdings.

Why is the Bundesbank storing reserves abroad?

According to the Bundesbank: in order to have it available as another currency reserve on short notice. Gold stored in Germany could not be traded in for foreign currency if there is an emergency.

(That’s the gist of the first half of the article. It’s not a literal translation but a “localized” transliteration for our American Turdites :)

Jan 8, 2014 - 1:53pm

OK I'll settle...

2nd ... Patiently waiting the death of one paradigm, ... And the rise of another - Friend

Jan 8, 2014 - 1:57pm

All this 2nd &

3rd, strike that, 4th stuff is getting monotonous.

But there's such a thing as tradition, and who am I to buck it?

Jan 8, 2014 - 1:57pm

Not spamming, just thinking these charts may prove useful

Wanted to repost these 2 charts..to let them sink in..The enormously of time scales over which human behavior follow similar patterns. I hope you do not mind. I have not seen such overlay in such way anywhere, though many talked about analogies.

The 200 year overlay of silver content in denarius over gold content in USD I used to identify the years in the 800 year long Roman Empire/Western empire overlay. I liked the analogy between French revolution and Nero which it revealed, and the following years of Vespasian ( Napoleon by analogy).


I found it possible to chart a general course of Empire with money debasement development using ROMAN empire as history by placing the after FED related debasement and today as reference line over 100 years:

Of course, the dates are approximate and the future predictions as (in) valid as usual. The interesting thing is, though, that Western Empire is not Dead yet, its looking for another revival with different governance and money.

Reset in this picture is either GOLD based USD or similar IMPROVEMENT of Western currency- after 20 years of uncertainty and wrangling with this issue from 2011-2033. Time of big uncertainty and instability. After that, WWIII or what else? Could cause total hyperinflation for a brief period of time as war is financed by printing-as chart indicates. Could be something else.

History teaches that empires do not disappear overnight without a good fight. Neither will the USA and Western Empire in General.

Jan 8, 2014 - 2:10pm

German gold gone . . . no big deal . . .

So, the Fed leased out Germany's gold--so what, no big deal.

When Germany asked for their gold back, it would be easy for the Fed to use the gold it holds for 59 other nations, if not its own, right? Plenty of gold:

"The gold is in "safe-keeping" on behalf of more than 60 sovereign countries and a few organizations. Close to 98 per cent of the gold bullion stored in the NY Fed's lower Manhattan vaults, according to the Fed, belongs to central banks of foreign countries." https://rt.com/op-edge/gold-manhattan-new-york-594/

After all, those other 59 countries likely have plenty of "good delivery" bars ready to ship to Germany--and, anyway, how would those countries ever know? They have full faith and trust that the Fed is 100% honest, right?

Jan 8, 2014 - 2:11pm

Lets figure out why they r

Lets figure out why they r tapering and noone expected it first. Next we can discuss germany. Pm r getting hurt and noone knows why. Just saying..

Jan 8, 2014 - 2:14pm

this is the biggest game of musical chairs, ever.

why's my gold? I know exactly where.

Jan 8, 2014 - 2:18pm

German gold

wasn't it sent to Hugo in Venezuela? or maybe its in Fort Knox, or maybe still down in the hold of the WTC, I suppose anyone's guess, I read something today that says China is dumping their gold, maybe thare dumping German gold. WTFK's

Jan 8, 2014 - 2:23pm

Historic definition

that I learned in series 7 was:

Rehypothecation -- The hypothecation again of collateral already hypothecated. Rehypothecation, except by consent of the owner of the collateral, is illegal. When a customer deposits with a broker securities instead of money as margin he hypothecates the securities with the broker. In effect he obtains a loan on them. The margin represents the loan. He signs an agreement with the broker whereby the broker is permitted to rehypothecate the securities is permitted to use them as collateral in obtaining a loan for himself. If the broker defaults on the loan he has obtained on the securities and the securities are sold to satisfy the loan the owner of the securities (the broker's customer) cannot recover the securities. He is without recourse except that he may proceed against the broker to recover the difference between the value of the securities and what he may owe the broker in margin or otherwise. Also, when stocks (or bonds ) are bought on margin the broker's customer gives the broker the right to hypothecate them. This is necessary as the customer is the real owner of the securities they are bought for his account and risk.

Wars the gold?
Jan 8, 2014 - 2:27pm

What is all the fuss about?

Can't we just send them 374 tons of these. I mean, for God's sake Germany, look at all of these security features! I bet your shitty old gold bars didn't have a raised inkwell! And that 3D Security ribbon, that is some high tech stuff!

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