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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Phoebus Apollo
Jan 10, 2014 - 6:41pm

damn right you're right about the new axis

Look where the new tsar began his career in service of Mother Russia: when Putin took over as head honcho of the FSB (formerly the KGB) he was ridiculed for being a Lt Col and for having spent his first years in the service in E Germany. It was the graveyard outpost. All the top young officers would go to western postings, was the rationale.

But Putin did not waste his time there and established close contacts with German business elites. Using the offshore secrecy of Luxembourg he and other Russian/German investors bought huge swaths of prime St Petersburg real estate in a company that defrauded its stockmarket investors.

Spool forward about 15 years and who is chairman of the board of the life-giving, Gazprom (for which read Putin)-controlled transBaltic gas pipeline, NordStream? The former German Chancellor, Gerhard Schroeder. The ties between Moscow and Berlin are deep and strong.

The UK might have a place in this all, though. Plutocratic Russians, Iranians and Chinese love London and no one has else has mastered the anonymising web of offshore havens quite like the Brits. London might well have a future as a financial center nonetheless. (although China Daily's editorial about England being an irrelevant little island during the UK premier, Cameron's, recent visit there suggests he might have overplayed his hand.)

Jan 9, 2014 - 4:57pm

ER, for what its worth...

I c&pd your comment and sent it off to The Jackass. Below is his response:

Jim Willie
2:29 PM (1 hour ago)
to me
Germany has trade surpluses, since they did not forfeit their industry like idiots
their labor unions made concessions, important ones
now Germany realizes the future is with the three-legged stool: RUSSIA, CHINA, GERMANY
they will next rule the world
Jan 9, 2014 - 4:55pm

Germany is ok with the feds

Germany is ok with the feds agreement of 7 years to delivery ...so who cares if the germans are ok with the deal. I dont.

Jan 9, 2014 - 12:21pm

Repost from latest thread

Turds German gold post got me wondering.. Thinking aloud about the Macro here...the drastic and blatant manipulation started in May 2011 (when the swiss was to be pegged to the euro), and then again in late 2012/early 2013 (Germany wanted their gold back). Maybe if we can just focus on the reasons and timing of these two events, we might get clues as to how long more this beatdown will last. Maybe even better, we might get a clue on how the new political landscape will look like in the years to come.

First question that puzzles me: Why would the big fat cats at the top sacrifice the semblance of sound markets for the sake of an all out blatant smash in paper price in 2011? Yeah I know they have probably been manipulating the markets since the beginning, but why did they expose the whole charade in 2011? What got them so stressed?

Was there anything happening on a macro scale that required that beatdown in 2011? Was it only because of the swissie (last safe haven fiat) becoming pegged to a its larger sick cousin? What got them so scared? Was it the realisation of big money that they were now on the wrong side of the trade and it was finally time to unwind and switch sides?

The real question that I find even more confusing. WHY DID GERMANY MAKE SUCH AN ANNOUNCEMENT ABOUT THEIR GOLD AND ITS REPATRIATION? They didnt really get anything out of it besides making it known that most of their reserves doesnt exist. So why did they do that?!

I am guessing the German request must have taken tptb (ANGLO bankers) by surprise as well. Hence the scramble and subsequent drawdown we are seeing? Could this be a switching of sides? Germany becoming neutral or an enemy to the old guard? What else could be the case? Why would they make such an announcement that proved a lack of trust in the system for only a paltry sum of gold? If they were going to let the cat out of the bag anyway, why didn't they just demand all of it, delivered by tomorrow? Why make the announcement for a measly % then go quiet when france and her central bank doesnt comply? Is it just a chess move that brings other pieces into play?

Since that announcement, ties between US and Germany have soured. With NSA related issues as well as Germany being largely silent about the Ukraine/Russia/EU situation. Where did that NSA whistle blower get asylum again? Oh yeah.. Moscow! And from Moscow we find out that the German chancellor's phone was tapped! Interesting isnt it? And does that mean that there are a whole cache of snowden bombs currently stockpiled in Moscow, ready to anger the german public even more?

Maybe the german gold announcement is just one of the many steps the germans are taking to align themselves and their public away from the Struggling US and staus quo. Maybe they are postioning themselves more towards the Chinese/Russian/Iranian Axis? Could Putin or Iran have said:"Make that announcement, get back as much physical as you can before the reset, and what you don't get back we will credit you with our Oil/Gas?" That would make sense, as Germany would be able to get something for their worthless paper gold held in account at the Fed. Valued at a measly $1200-1600/oz and never becoming valuable in $$$ until the reset (at which time they will be worthless anyway since they are paper denominated). All they would have to do would be to out their over lording allies, the English speakers...

If they play their cards right, Germany slips off their old dirty clothes (EU/NATO) and buddies up with gas rich Russia (Never another cold winter), oil rich Iran (New Saudis to fuel all those BMWs/bullet trains/), and gold rich China(New consumers post USA) when the music finally stops. Frankfurt could serve as the new banking hub that London/New York once was, ensuring Russian/Chinese/Iranian funds get the services that New York/London used to provide. Germany could be the bridge between the new and the old. The only western power still standing with manufacturing and technology, unlike the other once proud members. Russia needs a new banker now that they have lost cyprus. China already has HK ;)

Go back to 1930's. World was a financial mess. Who teamed up with whom then when things were shaky financially and geopolitically? Didn't the soviets have a treaty with the Germans back then? (https://en.wikipedia.org/wiki/Molotov-Ribbentrop_Pact)Didnt the Germans have a powerful asian ally? Could this be history repeating itself? Maybe this time the Germans don't have a mad man on the Brig. Maybe this time they won't backstab their large central asian partner midway through proceedings. Maybe china isn't really into imperialism like Japan was 60 years back, but are happy to reap the benefits of trade (much like most of her history), bringing in the gold while leaving the outside 'barbarians' to squabble as they wish. History never repeats... But the way things are going, it just might be rhyming in an all too obvious way.

Think about it:

  • Germanic cultures have been feuding with franco/anglo cultures for yonks
  • They are in the NATO camp now because they lost the war, not because they particularly love the french/english/european cultures.
  • Germany has now recovered enough after the devastation of ww2, and might be confident/independent enough to say that she wants to play for another team

We all believe that China/Russia/Iran/Brazil will get a significant stake in the new Paradigm of global power, but these guys will need some developed world expertise. Someone needs to design those wind turbines, solar panels and autobahns. Someone should be there to give advice on a sound currency (Anyone remember the strong safe DeutscheMark?). China/Russia/Iran/Brazil are there because they have a certain edge in something that the world needs. No one gets on this new Committee for free.

So lets see what we have. Which developed country currently has the technology, population and production to become a member of the new A team? Not the Swiss, they are too small and they are only good at making watches and tennis stars (Singapore and HK might be matching them with banking now, but definitely not yet with tennis stars or diamond studded watches). Not the Scandinavians, they are also too small, and their industry isnt really in the same league (size wise) as their southern neighbour. Whats left?! Australia? The Aussies might finally cut their American puppeteer strings and jump ship too, but they don't and won't ever really play pivotal roles.

Germany seems to be the main country that will jump ship and find an empty space on the BRIranC lifeboat. They are currently like the only healthy/semi healthy person on a boat full of people with contagious diseases (indebtedness). The longer they are tied to the other sickos the more likely they will get sicker. I know it, you know it, and I am sure they know it.

Lets see how this plays out. All I can say is, this gold announcement from the Germans just doesn't make sense. In a full poker game, no one goes all in and shows their hand before the river is flopped. Especially if and when they have nothing in their hand or up their sleeve.

Interesting times to be alive! Happy New Year all! Lets see what 2014 brings :) In the meantime, i'll be learning german and chinese. :D


Jan 9, 2014 - 5:17am

The Germans, well, do they

The Germans, well, do they exist as a free country after the war? They do not have German passports, they are after WWII "of Prussia". The US has their Gold, so Germany is not free, ok. They may be puppets, too, and you can bet on that. OK strong puppets, and maybe they will break away, but I doubt it.

Their previous fascists model is now popular all over the western world....

But I find Germans have a good spirit, are measured and reliable. And one day I think they will ask how aipac got control of them?

Jan 9, 2014 - 12:25am

Currency War - Germany & China Defect from Gold Suppression?

When the London Gold Pool fell apart in the late 1960s, it's collapse was initiated by the defection of France from the Game. France decided that it wanted Gold instead of US Dollars, and in due course the London Gold Pool price suppression scheme fell apart and Gold's price multiplied several times.

Now Germany (unsuccessfully) and China (successfully) are both demanding Gold (defecting from the game), and the current price suppression scheme using the COMEX and the LBMA (LME) organisations to manage the gold price will fold when the demand for physical gold runs out of physical supply.

Cheers G-Rod

Key Economic Events Week of 5/3

5/3 9:45 ET Markit manu PMI
5/3 10:00 ET ISM manu PMI
5/3 10:00 ET Construction Spending
5/3 2:20 ET Chief Goon Powell
5/4 8:30 ET US Trade Deficit
5/4 8:30 ET Factory Orders
5/4 1:00 ET Goons Daly and Kashnkari
5/5 8:15 ET ADP jobs report
5/5 9:45 ET Markit service PMI
5/5 10:00 ET ISM service PMI
5/5 12:00 ET Goon Mester
5/6 8:30 ET Productivity and Labor Costs
5/6 10:00 ET Goon Kaplan
5/7 8:30 ET BLSBS

Jan 8, 2014 - 11:49pm

German Gold

This article is bogus.......My sources tell me that Germany is now willing to settle in bitcoin's:-)

Bongo Jim
Jan 8, 2014 - 11:11pm


I was winding up my metal detecting session this afternoon at the beach and got a strong signal. I dug it up and there was a large flash of gold in my scooper/strainer. NO WAY! WAY! This would be my first gold coin by detecting...but something was amiss. I could make out Kruggerand and it had a dead guy silhouette on it, but something just wasn't right. As I pulled it from the sifter, my suspicions became even greater as it didn't seem as heavy as I thought it should. Could it be a Chinese knockoff? Plated titanium? On one side, the edge looked a little funky so I took a closer look. Turns out, some joker buried one of the chocolate variety Krugs. This thing wasn't even fit to eat. So much for a party when I got home...but the $20 Jamaican coin I found was pretty cool, except I'm 3,000 miles from Jamaica...Mon.

Jan 8, 2014 - 11:08pm

Harvey's Up! (TFMR)

  • Mark O'Byrne: International storage of coins and bars is becoming a popular diversification for U.S. citizens in Zurich, Singapore and Hong Kong. We believe a global current reset is coming , along with the amero currency, the gold silver ratio declining, and silver rising to $150/oz in the coming years. Another topic looked at was bail-ins by banks of individual creditors becoming one of the most under appreciated risks of our time and noting Poland's recent government confiscation of pensions. They discuss how the gold silver ratio throughout history has been 15:1. Today it is at over 60:1 and GoldCore believe it will revert to the mean. There are a number of reasons that silver should revert to the long term historical mean but the two primary ones are the fact that geologically in the earth’s crust there are fifteen parts of silver to every one part of gold. The other reason is that silver is used in many industrial, technological, medical applications today and since the Industrial Revolution a huge amount of silver has been used up.
  • Harvey: Oh! oh!! GOFO still showing major stress as we have the first three months in backwardation as the big 3 month contract is now in backwardation. GLD: Gold lost 1.5 tonnes of gold at the GLD vaults in London England. This gold is heading for Shanghai. SLV: Silver was unchanged at 9,909.49.
  • Grant Williams: We saw one (raid) yesterday, when a 4,000 contract sale took place in just a few seconds and smashed the gold price $30 lower. But the paper price just rebounded. So it really starts to feel like these massive bear raids we’ve seen are having less and less effect. The big problem these guys (central planners and bullion banks) have is when this thing turns around, you can sell all of the paper gold you want, but what you can’t do is conjure up physical gold out of thin air. And when the price spikes are going up instead of down, various players and large entities are going to want their physical metal, and that’s when this whole thing is going to start to unravel because we all know the physical metal isn’t really there.
  • Zero Hedge: Just 2 day safter their release, The U.K.’s Royal Mint said it ran out of 2014 Sovereign gold coins “due to exceptional demand. Meanwhile, Gold dropped to a six-month low of $1,182.27 an ounce in London on Dec. 31, capping the largest annual decline since 1981.
  • Tyler Durden: With December's flash crash in US Treasury Futures proved as nothing but an HFT algo gone wild, Nanex has turned its deep-thought to the recent halt in gold futures markets. Their conclusion, this was not the result of a fat finger, but rather the work of a high frequency trading algorithm that would pause, and (probably) test the market before continuing.
  • Grant Williams: As far as what’s happening with paper claims vs available physical gold, there are over 80 paper claims for every ounce of gold that’s being held in the Comex warehouse. This is not yet a disaster for the month of January, but February is a big delivery month. So we will have to wait until the next delivery month to see what happens to that structure. The pressure is certainly building in the Comex warehouses. There is gold in the Comex warehouses, but it’s not available at these prices. Most of this gold is not available for delivery and to shake that gold loose we are going to have to see materially higher prices. People think everything is OK, but nothing could be further from the truth.
  • Grant Williams: When the lack of physical gold backing paper gold problem erupts, there won’t be anyone ringing a bell. Instead, we are going to see this [palpable] fear as various entities rush to move from paper gold to physical gold. The Bundesbank started this process back in January of last year. They have only managed to get 37 tons of their enormous gold hoard back which is supposedly stored in the US. This is frankly laughable. But as this process picks up and feeds on itself there will be an inevitable tipping point where entities start to panic. When that happens, where is the gold going to come from? At these prices it’s not there.
  • Chris Powell: Lousy as 2013 was for gold in U.S. dollar terms, James Anderson of GoldSilver.com reports this week that from 2000 to the end of 2013 not one government currency performed better than gold did.
  • Bill Holter:Why do you think Great Britain recently met with China? For afternoon tea? No, Britain wants to know where they will stand in this after the smoke clears...because they can see it happening and they KNOW. We are in the midst of losing the privilege of issuing the reserve currency, yet very few Americans know or understand this. Foreigners can see it clearly and are preparing which is why gold demand all over the world has exploded. They know that our "reporting" of things economic and financial are bogus. They know exactly how much gold they have moved into their own borders and they can do more than the simple math required to figure out how close to the bottom of the barrel we really are. Others around the world can see this too. The rest of the world knows we are in the midst of losing the privilege of issuing the reserve currency, yet very few Americans know or understand this. Foreigners can see it clearly and are preparing which is why gold demand all over the world has exploded.
  • Tyler Durden: Bloomberg reports, for the first time in 21 years, mobile phone prices are rising in Japan. The typical deflationary path of technological improvement is being overwhelmed by JPY weakness. "Inflation is spilling across a range of products," warns a Dai-Ichi economist, adding that the weakening yen is driving up prices as "Japan is importing more final goods as production shifts overseas."
All this and more on... The Harvey Report! https://www.tfmetalsreport.com/comment/611467#comment-611467 DayStar
Jan 8, 2014 - 10:54pm

Glenn Beck TV on German gold

Trying to embed the video but not having much luck. Here's the link:


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Key Economic Events Week of 5/3

5/3 9:45 ET Markit manu PMI
5/3 10:00 ET ISM manu PMI
5/3 10:00 ET Construction Spending
5/3 2:20 ET Chief Goon Powell
5/4 8:30 ET US Trade Deficit
5/4 8:30 ET Factory Orders
5/4 1:00 ET Goons Daly and Kashnkari
5/5 8:15 ET ADP jobs report
5/5 9:45 ET Markit service PMI
5/5 10:00 ET ISM service PMI
5/5 12:00 ET Goon Mester
5/6 8:30 ET Productivity and Labor Costs
5/6 10:00 ET Goon Kaplan
5/7 8:30 ET BLSBS

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