Germany to repatriate & audit 150 tones of gold reserves from ny fed!!!

http://www.silverdoctors.com/germany-announces-intentions-to-repatriate-its-gold-from-ny-fed/

 

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Umm, it is not the job of the Bundesrechnungshof (Federal Audit Office) to "order" anything like that. But yes, the Bundesbank and the Rechnungshof have different opinions on whether the central bank's gold - currently stored in Frankfurt, London, Paris and New York - should be scrutinized. The Bundesbank basically says that it trusts the other central banks involved, the Audit Office demands regular checks.

Part of why this comes up now is that Philipp Mißfelder (CDU, ie. Merkel's party) visited the gold storage place in the US a few months ago, and later wanted to do that in the UK and France too. Well, the Bundesbank said No, and I assume he is not exactly happy with that - then again I did not know that we have a German "Visit the Gold" program. Can I sign up too?

So it may make sense to check, on a more or less regular basis, whether the gold reserves are there. Whether they will all be moved to Germany one day - hard to imagine now. May also depend on the storage cost ...

Christian

 

I was a little skeptical of this initially. Reuters is not telling quite the same story as SilverDoctors. If Reuters is correct then I don't see the point due to this statement:

German auditors say c.bank should take stock of gold bars:
http://af.reuters.com/article/commoditiesNews/idAFL5E8LMJH520121022

 

Good example as to why goldbug websites are not reliable sources.

 

Maybe not reliable, but it certainly tipped me off and beat the punch to the MSM. I prefer to treat sources as individuals. Discounting the messenger without hearing the message limits your perspective.

 

At some point, the Central Bank Gold Swaps (of the past three decades) WILL turn out to be a grand Game of Musical Chairs. Predictably, some banks will be left without (lawsuits, collapse, sanctions, etc.), PM ETFs will get looted, then real speculation will begin in earnest. It has not yet begun.

I believe that moment, the Big Bullion Scramble, will presage and fuel Gold's parabolic moonshot. I'm not saying this particular rumor is the beginning but we keep watch and wait for those dominoes to fall (and please forgive me the mixed metaphors.)

fwiw, I also believe the RETAIL INVESTOR will concurrently 'see the evidence' when dealer premiums on retail PM coin & bullion jump 25%, 50% 100% in short order.
Just 'signs to look for' IMO.

 

This article doesn't give the full picture either, the circles involved here are a bit more diverse. The German Bundesbank was pressured on further controlling and auditing the gold reserves stored at foreign central banks, and seems now to be willing to somewhat comply by transporting 50 tonnes of gold from the New York Fed branch to Germany to be melted/weighted and controlled for purity.

The gold reserves stored on domestic territory is audited every year by counting the bars and checking against inventory listings, the same procedure isn't done with the extraterritorial gold holdings which make up 2/3 of total gold reserves, the Bundesbank receives letters confirmation by the foreign physical holders. All foreign gold was never audited before and in some cases not even inspected, not even seen by representatives of the Bundesbank.

Today there are doubts regarding the existence and availability of the physical gold. The Bundesbank doesn't want far reaching audits in fear of political complications, the Bundesrechnungshof says that the current procedure is not in accordance to common standards of law, and members of German government like Rainer Brüderle Federal Minister for Economics and Technology and other members of parliament, of both opposition and governing parties, as are other people in economy and public not only for further controls but also for a repatriation of all gold back to German territory.

 

While this is an interesting story, my guess is that it will have little bearing on anything. If the gold is "missing," the net result is the US "buys" the holdings from Germany. If that happens, you'll see a rally in platinum group and rare earth metals. Why? If the Fed Reserve is found to be short of holdings, the result will be something along these lines:

US will purchase reserves from foreign nations (sort term rally). Once US has purchased all it can, US will coin/sell reserves at a premium and shift into other PMs that might be close to the value density (cost per cubic meter) of gold. That will cause a rally in this second metal/group, and a drop in the value of gold.

Since the global economy won't like this, it's far more reasonable that Germany asked the US what can be provided on demand, and that number was 50 tonnes per annum.

 

NorthKorea-
You edited out the most important qualifier of my post: "It has not yet begun" and "I'm not saying this particular rumor is the beginning." But when the Big Bullion Scramble starts, I don't believe the Treasury/Fed will be able to 'paper over the crisis' again (and again.) My point? In the future there will be a CALL on real assets and a 'Day of Reckoning.' And I very much doubt they'll be able to manage it; on the contrary. What you describe might only be possible by coercion - and Uncle Sam's system is too unpopular now. That scenario sounds like a stick-up and the End of Pax Americana to me. Woe is us, in the coming age of trade wars!

I'm not offering some whackoist flackey interpretation here: the Dept of Defense has analyzed variations of that strategem in war-games already. (Not declaring it's "likely" to happen as Jim Rickards says, either.) It's certainly food-for-thought and speculation, though.
http://seekingalpha.com/article/806...and-the-reemergence-of-a-global-gold-standard

And while I agree that PGMs should be valued more according to scarcity (Pt 30x rarer than Au; Rh 150x rarer, etc.) that re-valuation would cripple certain strategic US industries - the military-industrial complex would not allow PGMs to be monetized. That's the least plausible component of your consequences IMO, but I personallly cannot fathom how far/many directions 'this Big Bullion Scramble' might go. I cannot see past January, lol.

Inevitable as I suppose the Gold moonshot will be, 'the Big Bullion Scramble' will probably be overshadowed rather quickly by other, bigger coincident issues. (The collapse of the global financial system as we know it - for example.) We were pretty darn close in 2008, I believe.

 

Hmm. This gold was supposedly moved out of West Germany to make sure it didn't fall into the hands of the Soviets in case the Cold War got hot.

The Western banksters were not so happy with the prospects of millions of communist troops pouring into West Germany and West Berlin should a shooting war start. Lets keep in mind that much of this gold was stolen in the first place by the Nazis from other European central banks, many of which that were then under Soviet control. Gold radiated by a few tactical nukes fired by Nato wasn't real thrilling either. Paper money can be reprinted, but gold couldn't be replaced.

So this gold was moved to the Federal Reserve for safe keeping where it has remained ever since. The US taxpayer IS NOT responsible for it, should it be missing, but on the other hand, if it isn't there, you will never ever never ever hear an acknowledgment of this. IMO, this gold, will never find its way back to Europe no matter what the politicians say.

 

The majority of Germany's foreign gold holdings grew historically by accumulation within the workings of the Breton-Woods-System through trade surpluses, the argumentation of that time was that the potential Soviet military advancement presented a threat and German decision makers concluded it should be left at their original positions (ensuring safety, better convertibility, ..... well there were other political considerations too). Much of the gold has never seen German soil to begin with.

Stolen gold was eventually given back under the oversight of the Tripartite Commission for the Restitution of Monetary Gold, which was founded in 1946 by the Allied forces of Great Britain, United States and France.

I assume the same thing to happen.

 

Wrong. Most of the German gold stored in New York, London and Paris was bought roughly 50 years ago (see below). It was not "moved out" but by and large stayed near the place of purchase. Of course the fact that New York is far away played an important role in the years of the Cold War too.

Weird theory. The gold reserves are primarily the result of the trade surplus in the 50s and 60s (so-called West German economic miracle). Once "Bretton Woods" was over, this system of piling gold up did not make much sense any more, but the gold reserve was for a variety of reasons not simply sold either.

(Edit) Der Spiegel has just published an interesting guest comment about this (in German) where Wolfgang Münchau writes about "hyperventilating gold bugs".

Christian

 

The internet has been a wonderful tool for distributing information to people without reliance on the MSM. However, the other side of the coin is that anybody can post whatever they want without having any credentials to warrant the respect and attention they receive. This has resulted in a large number of people adopting a conspiratorial view of investing that is just about as valid as the tech stock view of the late 1990s, and probably will end the same way. They will be right as long as the bull market continues, but they will never tell you to sell. It's great fun, but by discouraging folks to do the difficult fundamental work of investing, or convincing them that they were doing research by reading articles that copy from each other until the original source is forgotten, if it ever existed at all, is the height of foolishness -- all my opinion, of course.

 

The dear Mr. Münchau"sen" is well known for his positions.

 

Hehe. Not that I agree with everything he writes, but some of the voices in this Bundesbank gold debate have been somewhat shrill indeed. Think of his comment as a counterweight, not the ultima ratio.

Christian

 

The Cuban Missile crisis was roughly ~50 years ago. If there was going to be a shooting war, this is when it would have happened. I stand by what I said.

 

Not really. After Hitler took control of the government the German government had practically no gold. When WWII started, whenever Germany took over a country, the first act was to move in to the central bank of that country and remove the gold reserves. It was literally 1000s of tons of gold. Furthermore, there was a great deal more gold pilfered from Jews who were exterminated in the concentration camps. Before the bodies were disposed of, they went through a process of removing all gold items including wedding rings, necklaces, and dental fillings. In addition, for much of the 40s and 50s leading up to the time when you said German gold was removed, Germany didn't have much in the way of surpluses. It's infrastructure had been destroyed.

Therefore, I disagree with your dismissal. It doesn't make any sense. Finally, the Swiss were found to have been holding Nazi gold in the early 2000s that belonged to the Jews. So the gold was not repatriated as you state. I can't imagine that western interests would willingly turn over anything to Stalin. And if Stalin got ahold of it, then it would have never been counted as part of Germany's reserves in the first place.

I contend that German gold at the Federal Reserve was put there to keep it out of the hands of the Soviets.

 

Fatima you're deliberately ignoring my input on that matter, aren't you?

 

I didn't read your post so I have no idea what you are talking about.

Edit: Ahh I see it now. No it wasn't deliberate. I usually simply ignore line by line rebuttal posts. I don't usually find them particularly interesting.

If you have something that you think you want me to respond to, please feel free to restate it again, and I will do my best to answer it.

 

Nevermind, nothing good can come of it.:devil: