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Germany repatriates its gold, at least some of it

Last week Germany’s central bank pompously announced that it had completed its repatriation of $31 billion in gold from Paris and New York, ridiculing earlier speculation that the gold had somehow been compromised.  A widely circulated theory was that Germany’s gold had been borrowed by bullion houses and delivered against futures contracts that were sold to the depress gold’s price.

The story was so believed that in 2012 the German Federal Court of Auditors asked for an inspection of German gold held at foreign locations.


The Bundesbank (Germany’s central bank) mounted a defense, saying it received annual updates from foreign central banks where the gold was being stored. It said that the “integrity, reputation and security of these foreign depositories are beyond reproach.”

Consider the Bundesbank’s “beyond reproach” position.  Central banks are in the business of creating money “out of thin air,” thereby cheating everyone else has to work for their money.  With a few strokes on a keyboard, billions of dollars (or euros, or yen or pounds) come into existence.

And, we’re supposed to believe “annual updates” as if authenticated by someone trustworthy.  Perhaps there is honor among thieves.

The Bundesbank said it used “verification measures” throughout the transfer process to ensure no gold was stolen or compromised. “No irregularities came to light with regard to the authenticity, fineness or weight of the bars,” it said in a written statement.

Still there are aspects of the repatriation story that will keep conspiracy theories alive.

For decades, the Bundesbank had only written affirmations from the Fed that their gold was where it was supposed to be.  In 2013, when the topic became heated in Germany, a supposedly secret report was leaked that had a “bar list from 1979/1980.”  More significant, the report noted that the NY Fed refused to allow German authorities to view the gold.

Moreover, when Germany asked for the gold held at the New York Federal Reserve Bank to be shipped to Frankfurt, the Fed said it couldn’t get it done for seven years.  Now the Bundesbank boasts that the recovery of its gold was completed three years before promised

In total, 743 tons were transferred. Originally, Germany had announced the repatriation of 674 tons.  Now, the numbers get interesting.

According to the Bundesbank, just over 50% of Germany’s gold reserves are now in Frankfurt. The remaining metal is held in London and New York, none in Paris.  How much remains in the New York Fed’s vaults and how much is stored in London was not disclosed.  Let’s do some math.

Germany claims 3,384 tons of gold, a little over half in Frankfurt, say 1,760 tons.  That leaves 1,624 tons between New York and London.

So, has Germany repatriated its gold?  Still plenty of room for shenanigans when gold is needed to suppress the market.  And, plenty of room for coverup if German gold was used earlier to suppress the price.

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