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Tuesday, January 07, 2014

Is Germany's gold gone?

Zerohedge features an exchange of letters with the Deutsche Bundesbank:
Here is a recent correspondence from our friend Lars Schall, an independent financial journalist, and the German Central Bank, the Deutsche Bundesbank, regarding the exact whereabouts and specifications of Germany’s national gold reserve. From the correspondence below, it appears that the US Central Bank had already leased out Germany’s gold reserves in prior years and no longer has it, as the gold bars the US Central Bankers returned to Germany last year were clearly not the same ones that Germany originally deposited with them. The questions Mr. Schall’s revelations now beg is (1) if the Banque de France and the Bank of England have Germany’s original gold as well; and (2) if the various Central Bankers are deliberately returning Germany’s gold on a painfully slow timeline because they have already leased out Germany’s gold into the open market in prior years, no longer hold it, and must therefore scrape together Germany's gold from the open market now.
The fact that it is taking eight years for Germany to obtain a portion of its gold upon request, and that those bars are not the same ones that were originally on deposit in New York tends to suggest that the USA's gold is probably long gone from the Federal Reserve as well.

Labels:

66 Comments:

Anonymous Titus Didius Tacitus January 07, 2014 9:03 AM  

I want October 2034 in the U.S. financial dead pool.

Anonymous Different T January 07, 2014 9:10 AM  

Vox,

Are you ever going to shift towards "creation", or are you still set on "redemption?"

Anonymous YIH January 07, 2014 9:12 AM  

Is Germany's gold gone? the US Central Bankers in New York
Cut, paste, put the puzzle together. Stereotypes exist for a reason.

Anonymous Luke January 07, 2014 9:19 AM  

So, why wouldn't the Krauts tell the U.S. to pay back the gold leasee's lease payments, and retrieve their fricking gold? It's not as if the U.S. is likely to either invade/air/missile strike Germany, or can withdraw military protection the German gov't currently believes it desperately needs (as it once did).

Anyway, the German gov't undoubtedly still has some conceivable cards to play in this matter. They could, for example, publicly offer to accept Puerto Rico (or Guam or some other U.S.-held island) or a top-of-the-line aircraft carrier in exchange for calling it even. Aside from greenbacks in ever-decreasing demand, mil hardware and territory are increasingly all the U.S. Gov potentially has to trade. Sounds a lot like Russia in the 1990s (except they had more raw materials they could also barter with).

Anonymous DrTorch January 07, 2014 9:24 AM  

Nevertheless, gold prices are still well below their highs.

Blogger Bogey January 07, 2014 9:27 AM  

Question, where did it go?

Those original gold bars have to be sitting somewhere.

Anonymous Edwin Calais January 07, 2014 9:30 AM  

The gold is all sitting in China, waiting to back the next global currency after the US Dollar collapses. The Germans can just simply go to China and pick it up, can't they?

Blogger El Borak January 07, 2014 9:30 AM  

Those original gold bars have to be sitting somewhere.

No, they don't. Swiss refineries are working overtime making kg-denominated .9999 bars for China out of bars denominated in other weights. The nice thing about gold is that the numbers come off the bars real easy at the right temperature.

Anonymous Stilicho January 07, 2014 9:31 AM  

Those original gold bars have to be sitting somewhere.

Melted and recast into 1 kilo bars with a dragon stamped on them....

Anonymous Stilicho January 07, 2014 9:32 AM  

damn you El Borak...

Blogger Cinco January 07, 2014 9:35 AM  

Evidently, in 1979 new standards were introduced at the LGD and the old bars had to be melted and recast in order to meet them. That explains away where the old bars went.

The eight year time for repatriation is more than enough to cast suspicion by itself though.

Anonymous VryeDenker January 07, 2014 9:37 AM  

Does this count as naked shorting gold?

Blogger Bogey January 07, 2014 9:37 AM  

Wonderful, I think I'm going to go throw up now and pray. In that order.

Blogger tweell January 07, 2014 9:43 AM  

It would behove the Germans to check those gold bars and ensure that they aren't getting gold-plated tungsten. Lots of that going around.

Anonymous Orlok January 07, 2014 9:53 AM  

Back in March of this year Rick Perry demanded the Fed return the Gold Texas had on deposit with them as well. Not sure what the current status of this is, probably similar to Germany's plight, i would imagine.

Anonymous Godfrey January 07, 2014 9:57 AM  

No reason to worry. The secular scientific-based egalitarian utopia is just around the corner. The benevolent technocratic elite are hard at work perfecting the economy. No reason to worry... no reason to worry... ah... right?

Anonymous YIH January 07, 2014 9:58 AM  

Also from Zero Hedge: Wow, just look at all that global warming.

Anonymous Porky, Pig of Wisdom January 07, 2014 10:00 AM  

Hint: Never deposit your money with people who think that debt is irrelevant.

Anonymous Joe Doakes January 07, 2014 10:04 AM  

The US doesn't need gold because our currency isn't based on gold, it's based on the full faith and credit of people like Barney Frank. You trust ol' Barney, don't you? So the gold is missing, so what? What's the problem? Look - free cell phones!

OpenID newrebeluniv January 07, 2014 10:06 AM  

No, but you...you...you're thinking of this place all wrong.
As if I had the gold back in a safe.
The, the gold's not here.
Well, your gold's in Joe's house...that's right next to yours.

--Hale

Anonymous hygate January 07, 2014 10:08 AM  

Die Hard with a Vengence would have been way better if "Simon" had broken into the New York Federal Reserve and found that there was no Gold there.

Anonymous Harsh January 07, 2014 10:16 AM  

So bottom line: is this good or bad for gold prices?

Anonymous Huckleberry - est. 1977 January 07, 2014 10:34 AM  

Well, good thing Germany doesn't have anything more than a parade-level military, otherwise this might get dicey.
It's not like they're going to rise from the ashes and try to take over the world for a fourth time.
That would just be silly.

Anonymous Huckleberry - est. 1977 January 07, 2014 10:37 AM  

I want October 2034 in the U.S. financial dead pool

I'll take the under, based on nothing more than a gambler's hunch.

Blogger njartist January 07, 2014 10:40 AM  

The fact that the gold bars are different makes sense: this coincides with what I read a few years ago that the gold is leased out to make jewelry; though how one could lease it in any manner that would permit it to be recast and still expect it to be returned in its original state is beyond me.

Anonymous Bobo January 07, 2014 10:40 AM  

TDT: " I want October 2034 in the U.S. financial dead pool."

I find your unrestrained optimism heartwarming. Put me down for a week from Thursday...

Blogger swiftfoxmark2 January 07, 2014 10:41 AM  

Looks like the Feds pulled a Corzine.

Blogger El Borak January 07, 2014 10:49 AM  

So bottom line: is this good or bad for gold prices?

Yes, depending upon whether you're talking about the short term or the long term, in what currency you are pricing it, and whether there will be a proper gold market at all once the shenanigans stop.

Anonymous hardscrabble farmer January 07, 2014 11:09 AM  

"Nevertheless, gold prices are still well below their highs."

When certain entities slam the hell out of the paper gold (which they bought with money they printed) those artificially low prices make it easier to buy back the real thing in order to settle up with whomever is demanding the loudest. Sell the real thing at the top, create all the paper gold your fake money can buy, sell off in mass quantities to drive prices down so you can pick up the stuff you sold at it's peak for new stuff at its new low.

Wash, rinse, repeat.

If there is an alternative to that scenario that is supported by the facts as we know them, I'd sure like to hear it.

Anonymous zen0 January 07, 2014 11:17 AM  

All the wiseguys know the gold is in Israel. /s

Besides, I am not convinced Germany really wants its gold. It looks like banksters putting on a show for some reason.

Banksters have been turning gold into fiat currency from time immemorial. Why would they stop now.

Blogger James Dixon January 07, 2014 11:18 AM  

> Also from Zero Hedge: Wow, just look at all that global warming.

The Fimbulvetr does seem to be nigh, doesn't it?

Blogger Cinco January 07, 2014 11:18 AM  

I hate to use the term "market manipulation;" but, I have a sneaking suspicion that the FED has all its chips in the pot right now, and is just planning to repurchase gold at a later date after they jack up interest rates and the price of gold plummets.

Blogger Serge_Tomiko January 07, 2014 11:24 AM  

Who cares? It's not like anyone cares about gold besides gold fetishists on the internet. It's a useless metal, the fetish for it is entirely contrary to everything European.

OpenID simplytimothy January 07, 2014 11:31 AM  

AGW->FOI.zip
NSA Spying->Snowden
Poof! Its gone! -> ????

Anonymous The other skeptic January 07, 2014 11:41 AM  

the fetish for it is entirely contrary to everything European.

Just like those who have a fetish for sticking their penises in other men's anuses?

Blogger James Dixon January 07, 2014 11:44 AM  

> It's a useless metal, the fetish for it is entirely contrary to everything European.

Why don't you try telling that to the Swiss, not us?

Anonymous Steveo January 07, 2014 11:54 AM  

Under the covers with the flashlight...

...IMO this is another reason why the central bank club made the temporary debt swap arrangement PERMANENT a few weeks ago. The shell game with physical gold is very difficult and obvious. The promises of massive access to liquidity HAD to be part of the settlement of the gold problem for the banks. While it had been doing so already, money moves instantly between the G7 (mostly G7) to cover, then move on again to cover elsewhere, etc. - on a PERMANENT arrangement. That may seem like a minor detail, but it's not. Give it a few months and no one will remember that the bank solvency is actually an instantaneous and temporary condition, you know, like quantum particles - look at me I'm solvent!

Yowsah. Who's got your money now? Round & round she goes, where she stops nobody knows...
Lots harder to play with gold that way ain't it?

Anonymous FUBAR Nation Ben January 07, 2014 12:12 PM  

Gold looks set to decline to $850-$950 before it takes off. We need to see people on this blog thrown in the towel and mines shutting down. Then we will hit bottom.

Blaming the bear market on manipulation doesn't make any sense because no entity can control the price of gold forever, even though firms like Goldman Sucks may be able to manipulate short term to make some money.

Anonymous Jack Amok January 07, 2014 12:31 PM  

This is the reason that a gold-backed currency is really no better than a currency backed by faith in the likes of Barney Frank, because in fact they're the same damn thing since Barney and Friends are in charge of storing the gold.

A currency made out of gold is different, but you'd have to check with your ObamaCare dental provider if you're covered for fixing a tooth chipped biting the coins to check their purity..

Anonymous Will Best January 07, 2014 12:41 PM  

I want October 2034 in the U.S. financial dead pool.

You seem to be believing the numbers out of the SSA. If you think that is what is going to cause it then you really ought to adjust it to somewhere 2024.


Gold looks set to decline to $850-$950 before it takes off.

If gold fell to $850 I would buy a kilo

Blogger Tiny Tim January 07, 2014 12:47 PM  

Of course it is all looted... like the pyramids, looted long ago, the thieves long gone.

Anonymous Sigyn January 07, 2014 12:47 PM  

Zeigen Sie mir das Geld!

Anonymous Harsh January 07, 2014 12:48 PM  

It's a useless metal, the fetish for it is entirely contrary to everything European.

I'll send you my postal address and you can mail me any of that "useless metal" you happen to come across.

Blogger Tiny Tim January 07, 2014 12:49 PM  

The Germans know what happened to their gold. Many at the very top of Europe and the US divided up the spoils long ago.

This is all a charade. If it is gone they all know it is gone because they took it.

Blogger Tiny Tim January 07, 2014 12:53 PM  

As far as the Chinese having it that is a joke. The Chinese have done nothing but bend over for the US and then to top it off accepted wooden nickels.

Why would we give them gold?

I would look under the beds of the worlds western elites. That is where you will find the gold.

Anonymous Ferd January 07, 2014 1:18 PM  

Contrary to popular belief, Goldfinger was not stopped in his theft of the gold at Fort Knox. The bomb was a ruse and all the ingots are residing in a vault in China.
Ever wonder how James accumulated all that cash for his shaken and stirred hooch and his well-rounded dollies?

OpenID cailcorishev January 07, 2014 1:21 PM  

Why would we give [the Chinese] gold?

I'm not claiming we have, but you pointed out one very obvious reason: give them gold under the table to get them to take the wooden nickels in the open. People have been wondering for a while why the Chinese keep buying our worthless debt. Maybe we're using gold to pay their elites to do it.

Anonymous allyn71 January 07, 2014 2:13 PM  

"So bottom line: is this good or bad for gold prices?" - Harsh January 07, 2014 10:16 AM

Who knows as this disclosure along with similiar other shows (see Rehypothecation) the gold market is totally rigged and manipulated same as the stock and debt markets. There is no real price discovery in a rigged quasi-market, there is only illlusion.


"Blaming the bear market on manipulation doesn't make any sense because no entity can control the price of gold forever..." - FUBAR Nation Ben January 07, 2014 12:12 PM


While no entitiy may be able to control the price of gold forever, the FED and it's affiliates are proving everyday that you can manipulate and control the price of gold as long as you control the world reserve currency. As long as the dollar lives the price of gold will be manipulated. They have to or else the fiat currency ponzi scheme is up.

Anonymous TWS January 07, 2014 2:52 PM  

Why aren't the Germans demanding their gold instead of allowing the thieves to pay them back in their own sweet time?

OpenID mattse001 January 07, 2014 2:59 PM  

@Jack Amok

"This is the reason that a gold-backed currency is really no better than a currency backed by faith in the likes of Barney Frank, because in fact they're the same damn thing since Barney and Friends are in charge of storing the gold."
I hadn't thought about how storing gold itself could be a lie, but you're right. On top of that, even if the gold is physically in the vault, you are relying on the government to never change the conversion ratio. Like how the US dollar used to be fixed as "1/35th of an ounce of gold."

As an aside, this is why I don't trust electronic currencies like Bitcoin: they aren't physically real. If an EMP (or worse, generalized socialism) hits the US, what good will Bitcoin be?

As to the main topic:
I don't see why the disappearance of Germany's original bars is automatically a bad thing, unless you don't think gold is fungible. If it weren't fungible, it would severely limit trade as each bar would have to be physically shipped across the world. Gold sub-markets would be in a medieval state.

Considering all the financial uncertainty worldwide, I wondered why gold isn't higher. I'd heard rumors of market fixing (especially from Zero hedge). One response I got on another website was that as fast as the Chinese were buying it, the west was selling it...keeping the price at the lower equilibrium level. If true, then we can expect fireworks when the west runs out of gold to sell.

Blogger JDC January 07, 2014 3:01 PM  

So bottom line: is this good or bad for gold prices?

I don't know about prices, however the president still retains the authority to confiscate or restrict private ownership of gold...or euphemistically, "investigate, regulate or prohibit...the importing, exporting, hoarding, melting or earmarking of gold" in times of a declared national emergency."

Now, some may use this fear to profit (buy now or else you won't be able to), but the fact remains that it can happen. II wonder what would happen if the U.S. was indeed exaggerating their reserves...could fear + presidential = confiscation? Could these two reactants result in a product whereby gold is impossible to buy or own? We of course need to add in an almost fanatical devotion to the pope into this chemical reaction.

Anonymous bob k. mando January 07, 2014 3:26 PM  

TWS January 07, 2014 2:52 PM
Why aren't the Germans demanding their gold instead of allowing the thieves to pay them back in their own sweet time?



how would they enforce the return?

they've probably been told that if they get too noisy they may find themselves in the position of Greek depositors ... taking across the board involuntary hair cuts.

also, i'm certain they're being threatened with being the cause of 'a complete global economic meltdown' if they make too big of a fuss.

Anonymous gwood January 07, 2014 3:27 PM  

I buy all my gold from these guys. Much better prices.
Chinese Central Bank

Blogger Tiny Tim January 07, 2014 3:50 PM  

The fact that all of you act like the Germans don't know where it is or that they had nothing to do with the theft and distribution of that gold to the worlds elite is laughable.

And then to further believe we paid off the Chinese with it is borderline mental illness.

The Chinese are going to end up with nothing if their balance sheet assets are US and European liabilities...



Anonymous Tom White January 07, 2014 3:50 PM  

Is this the beginning of the mother of all bank runs?

Anonymous stevev January 07, 2014 4:05 PM  

Fuck

and Fuck

Anonymous bob k. mando January 07, 2014 5:25 PM  

Tiny Tim January 07, 2014 3:50 PM
The Chinese are going to end up with nothing if their balance sheet assets are US and European liabilities...



uh, hey, uh, dumbass? you might want to check out Zerohedge.

China is the single largest importer of gold on the planet. whether it's individual chinese or the government ( i think it's both ), there's plenty of HARD currency/precious metals flowing into China. also, gold is hardly the only good that China has been stocking up on. the spike in scrap metal prices a couple of years ago was due to China.

buy low ( artificially depressed paper gold speculation ), sell high ( before the bubble bursts on the fiat currency US petrodollar ).

looks to me like the Chinese know exactly what they're doing.

Anonymous allyn71 January 07, 2014 5:43 PM  

"I don't see why the disappearance of Germany's original bars is automatically a bad thing, unless you don't think gold is fungible. If it weren't fungible, it would severely limit trade as each bar would have to be physically shipped across the world. Gold sub-markets would be in a medieval state." - mattse001 January 07, 2014 2:59 PM

The problem isn't whether the gold is fungible, it is that it wasn't the Germans original deposit. The gold was held in repository and wasn't supposed to be moved, traded, sold, or messed with at all unless there was consultation and consent with the Germans first. If the Germans haven't gotten their gold back after 8 years and what they are getting back isn't the same that the originally put in, it calls into question who has been doing what with the gold.

If shady business has been going on behind the scenes without your authorization you might not trust that your money is really there.

Not a good thought to have floating around if your the man behind the green curtain and have an illusion to maintain.

Anonymous Harsh January 07, 2014 8:47 PM  

Why aren't the Germans demanding their gold instead of allowing the thieves to pay them back in their own sweet time?

Didn't we do that dance twice last century?

Blogger tz January 07, 2014 9:21 PM  

Germany should report every bar by number as stolen, and demand it back - if a bullion bank has it, it then has to melt it down or report it.

Blogger tz January 07, 2014 9:22 PM  

How can Germany have gold "holdings", when it doesn't have ahold of them?

Blogger Tiny Tim January 08, 2014 8:42 AM  

bob k. mando - I stand corrected. I agree with you that "China is in great financial shape". What a joke. Take a hike.

Anonymous dh January 08, 2014 2:27 PM  

There really is no reason why every holder of Gold who is not the owner should not be required to disclose, publicly, in real time, the serial number of each bar held. This is really the basic underpinnings of transparency. Who has what.

They already have to do the same with the levels of cash and debt they hold, this should be no different.

Anonymous Discard January 09, 2014 5:24 AM  

Why would the Germans keep their gold in the U.S? Was this to keep it out of Soviet hands in the event of WW3?

Anonymous BrentG January 09, 2014 9:18 PM  

Check out tfmetalsreport.com and zerohedge.com. TF has some articles on the German gold as well as articles and interview with Koos Jansten (sp) who has been researching the amount of gold leaving the Shanghi Gold Exchange.

No answers, but interesting info and questions.

Anonymous Balzac January 11, 2014 1:46 PM  

Colonel Smithers: Gentlemen, Mr. Goldfiinger has gold bullion on deposit in Zurich, Amsterdam, Caracas, Hong Kong... worth 20 million pounds. Most of it came from this country.

James Bond: Why move it?

Colonel Smithers: Because the price of gold varies from country to country. If you buy it here at 30 dollars an ounce, you can sell it in, say, Pakistan for 110 dollars and triple your money... provided, of course, you have the facilities for melting it down.

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