Seeking Alpha

The Bundesbank is repatriating at least part of its gold from New York (where 45% of the...

The Bundesbank is repatriating at least part of its gold from New York (where 45% of the country's reserves are held) and Paris (11%), according to Handelsblatt. Steve Liesman says the Buba has confirmed the story, and the amounts are to be announced tomorrow.
Comments (31)
  • - There had to come a time when stock is taken and books needed to be balanced. The same applies to all the bankrupt governments, who have turned a blind eye to their worsening finances.
    Are Germany about to get a nasty surprise ?
    15 Jan 2013, 11:14 AM Reply Like
  • Tungsten weighs as much as gold. Just sayin...
    15 Jan 2013, 04:22 PM Reply Like
  • The real question is why are they repatriating. I mean really why, not what they tell us. There is a message here.
    15 Jan 2013, 12:10 PM Reply Like
  • Because (the long version):


    1. The fiat currencies are in an inflationary race to the bottom. Everyone wants to be *slightly ahead* of their rivals in inflation.


    2. The more physical gold you have, the more surreptitious "fractional reserve" lending of gold you can perform to banks, who will dump the gold on the local market as shorts, thereby holding down the price of gold relative to the local currency. This masks the effects of your deliberately inflationary monetary policy, see #1.


    Gold, for tolerably obvious reasons, is the preferred commodity when it comes to benchmarking currencies. Therefore why store your gold in New York or London, when you can keep it locally and use it to suppress the truth about your own debased currency?


    Plus, when TSHTF, do you really want your gold reserves locked up in a country that is about to devalue their currency? That is a giant wild card. These banks remember Roosevelt, and they especially remember Nixon. They are not going to abide another unilateral change in contract terms that costs them billions.


    The short version: the U.S. is unstable and therefore untrustworthy. It's financial future is uncertain.
    15 Jan 2013, 06:32 PM Reply Like
  • Did Hugo Chavez ever did get all Venezuela's gold back from The Bank of England? As I recall, it took them a bloody long time to get even the first shipment going. Wouldn't it be something if they didn't have it or couldn't find it?
    15 Jan 2013, 12:31 PM Reply Like
  • Found the answer:
    15 Jan 2013, 12:46 PM Reply Like
  • Since Steinbrueck has called for this repatriation - he has been very critical of Buba - and Merkel has not, at least part of this move is political, defusing a potent campaign issue.


    But it also shows, of course, how pervasive the fear of Tungsten Trickery has become worldwide.


    (And maybe why in certain quarters, pushing the ridiculous Platinum Godzilla Coin idea was considered prudent.)
    15 Jan 2013, 01:09 PM Reply Like
  • If this is only because of tungsten, then it is enough just sending someone to test it.
    15 Jan 2013, 05:50 PM Reply Like
  • Except the Fed doesn't let anyone see their own gold and even if they made a special exception - like they did last year when they showed Germany 1 of their 9 compartments - the compartments are numbered to protect the anonymity of the rest of the owners.
    15 Jan 2013, 09:55 PM Reply Like
  • What's really interesting is that last year they were only going to repatriate 50 tons a year for 3 years from NY. Why the change of heart if they don't foresee a repeat of the events that happened 90 years ago in their country.
    15 Jan 2013, 10:00 PM Reply Like
  • There can be no other reason. Massive inflation must be coming to Germany. Which means the Euro collapses and the Dollar rallies.


    Jokes aside, the real reason:


    Most of Germany's reserves have been stored abroad since the Cold War over fears of a Soviet invasion.


    But the central bank came under pressure last year when Germany's independent Federal Auditors' Office last year concluded it failed to properly oversee its gold reserves. The auditor suggested the central bank should carry out regular inspections of the gold held abroad to verify its book value or change the reserves' management.


    The auditors' report stunned Germany, where the Bundesbank routinely tops polls of the nation's most trusted institutions. The central bank was taken aback and maintained it didn't see the need for more scrutiny in overseeing the reserves, saying "there is no doubt about the integrity of the foreign storage sites."


    But the debate on the gold reserves, most of which are held by foreign authorities, caused some inevitable conspiracy theories questioning their very existence. Several politicians then jumped on the issue and called for some of the reserves to be repatriated.
    15 Jan 2013, 10:39 PM Reply Like
  • Apparently, the German's fear another severe downturn from the countries neighboring south of them or, indeed, their economy is in worse shape than we know. Or they no longer trust the U.S. Federal Reserve System--I guess the latter is correct. We've got trouble!
    15 Jan 2013, 01:32 PM Reply Like
  • And a bunch of yellow shiny metal will help them? Gold bugs are obsessed. Borderline cultists.
    15 Jan 2013, 05:54 PM Reply Like
  • If you're not a gold bug, what are you? A paper bug?


    Does your entire worldview consist of reactive ad hominems?
    15 Jan 2013, 06:10 PM Reply Like
  • Somebody define "gold bug" for me? I can tell by inference that is intended as a derogatory term. As I sit here shaking in my closet and worrying about what the smart people might think, I fear that I might be one. I sure hope not.


    Gold bugs enjoy this from ZZ Ward:

    15 Jan 2013, 10:55 PM Reply Like
  • In times of trouble, people and governments turn to gold. I think this move signifies that bad times are on the horizon for the western world. No matter how many 'talking heads' refer to gold as the 'barbarous relic' or 'uncivilized', gold is the currency of choice when fiat currencies inevitably fail.
    15 Jan 2013, 02:00 PM Reply Like
  • There can be no doubt at all that the Gold is where it is supposed to be.
    15 Jan 2013, 02:37 PM Reply Like
  • "...In the months that followed Hugo Chavez’ 110 ton gold repatriation request in the summer of 2011, gold exploded nearly $400 as the bullion banks panicked. "


    "...In other news, a tungsten shortage was announced this evening." :)
    15 Jan 2013, 02:40 PM Reply Like
  • Dumb. Tungsten is everywhere. There will sooner be a shortage of sand, or water, than tungsten.
    15 Jan 2013, 06:23 PM Reply Like
  • I believe the tungsten comment was a joke. Tungsten is just about the same density as gold so it is often used to make counterfeit gold bars.
    15 Jan 2013, 09:05 PM Reply Like
  • May be Germany needs more light bulbs?
    15 Jan 2013, 09:08 PM Reply Like
  • Tungsten rods have been found in gold bars all over the world. Its pretty scary. I would like to buy some of the shiny metal myself but I a little nervous. Plus I am more of a silver person myself. Although they have even found fake silver coins comming out of China.
    16 Jan 2013, 04:07 AM Reply Like
  • If it worries you so much, buy coins. You'll pay a small premium though. You can also buy from a national mint to be on the 100% safe side, such as the Royal Canadian Mint.
    16 Jan 2013, 06:04 AM Reply Like
  • This could be very interesting. There is a petition to audit the US's gold storage at Fort Knox, which, from what I heard, has not been done since around 1953
    15 Jan 2013, 02:58 PM Reply Like
  • There is a video on youtube I believe showing an audit that was done. I think it was from the 70's. It should still be done though, Mabye every 10 years or so, or every 4 years before presidential elections.
    16 Jan 2013, 04:09 AM Reply Like
  • At the current debasement rate of U.S. dollars, if the gold standard were to be re-established in the U.S., gold would be valued at $5000/oz or higher. This price is easily calculated by counting the number of FRNs that have been issued, and comparing it with the Fed's stated gold reserves.


    The day the first tanker of oil out of Russia is priced in rubles or renminbi, U.S. dollar hegemony is over, and you will see the true price of gold -- or really, the true worthlessness of the dollar. This will happen in our lifetime.
    15 Jan 2013, 06:15 PM Reply Like
  • In our lifetime? I don't want to live to be 150+.
    15 Jan 2013, 09:02 PM Reply Like
  • I do.
    15 Jan 2013, 09:33 PM Reply Like
  • Have you seen the people that are 110+? I want to go like my grandfather. Quietly in my sleep. Not screaming like his passengers.
    16 Jan 2013, 04:09 AM Reply Like
  • It's going to be a lot harder for TPTB to manipulate the price of gold via fractional reserve lending (of gold) if gold reserves continue to be taken out of the U.S. system this way.


    Diversified gold holding is good for transparency and honesty in the gold market. Let the real owners of the gold take delivery, and then let's see whether J. P. Morgan et al. can continue to disguise the debasement of the dollar by flooding the markets with borrowed "virtual" gold.
    15 Jan 2013, 06:21 PM Reply Like
  • A big thanks to Lars Schall for holding the Bubas feet to the fire.
    16 Jan 2013, 12:54 AM Reply Like
DJIA (DIA) S&P 500 (SPY)