The Real Reason Why Germany Halted Its Gold Repatriation From the NY Fed

[Lauren Johnson]

Following the stunning announcement in January 2013 that the Bundesbank would repatriate 674 tons of gold from the NY Fed and the French Central Bank, a year later the Bundesbank followed up with a just as stunning revelation that of the 84 tons the bank was supposed to bring back home, it had managed to obtain just a paltry 37 tons, with only 5 tons originating from the NY Fed.

The reason given for this disappointing amount was as follows:

The Bundesbank explained [the low amount of US gold] by saying that the transports from Paris are simpler and therefore were able to start quickly." Additionally, the Bundesbank had the "support" of the BIS "which has organized more gold shifts already for other central banks and has appropriate experience - only after months of preparation and safety could transports start with truck and plane." That would be the same BIS that in 2011 lent out a record 632 tons of gold...

Going back to the main explanation, we wonder: how exactly is a gold transport "simpler" because it originates in Paris and not in New York? Or does the NY Fed gold travel by car along the bottom of the Atlantic, and is French gold transported by a Vespa scooter out of the country?

Supposedly, there was another reason: "The bullion stored in Paris already has the elongated shape with beveled edges of the "London Good Delivery" standard. The bars in the basement of the Fed on the other hand have a previously common form. They will need to be remelted [to LGD standard]. And the capacity of smelters are just limited."

Or, simply said, generic pretexts for a failure to follow through with the Bundesbank's original intention of redomiciling physical gold, especially after Zero Hedge posted in November 2012 proof of collusion between the 1968 Bank of England and the Fed seeking to defraud Deutsche Bank: 'Bank Of England To The Fed: "No Indication Should, Of Course, Be Given To The Bundesbank..."

The charade ended with a thud in June of this year, when instead of continuing the farce, Germany simply gave up, providing an even more laughable reason why it can no longer even pretend to collect its physical gold located at New York's 9 Liberty Street.

Germany has decided its gold is safe in American hands. "The Americans are taking good care of our gold," Norbert Barthle, the budget spokesman for Merkel's Christian Democratic bloc in parliament, said in an interview. "Objectively, there's absolutely no reason for mistrust."

And that was it: not a single word more from Germany on the topic of its failed gold repatriation initiative. Until this week, when Deutsche Bank - the bank which is Germany's equivalent to America' Goldman Sachs in terms of policy decision-making - once again revealed just what the true reason behind the failure of Germany's attempt to bring its gold back. From Robin Winkler's special report:

... the gold community paid great attention to the decision of the German Bundesbank to "bring German gold home". At the beginning of 2013, the Bundesbank announced it would repatriate 300 tonnes of gold stored in the US by 2020. It is well behind schedule, citing logistical difficulties. Yet diplomatic difficulties are more likely to be the chief cause of the delay, especially seeing as the Bundesbank has proven its capacity to organise large-scale gold transports. In the early 2000s, the Bundesbank incrementally repatriated 930 tonnes of German gold held by the Bank of England.

Because if anyone knows what really happened behind the scenes in Germany, and inside closed doors at the Bundesbank, it is Deutsche Bank.

And there you have it: it wasn't transportation, or "good delivery standards" concerns, or anything remotely related to Germany "decididng its gold is safe in American hands", but just the opposite: Germany was pressured to keep its gold in the US after a "diplomatic" line of communication was opened, most likely the result of the Fed making it all too clear clear to the Bundesbank not only who runs the show, but what the assured failure to repatriate Germany's gold would mean for "price stability."

Which has, for now at least, ended Germany's gold repatriation demands.

Now the question is, just how will the US pressure the Swiss "diplomatically" to make sure its own gold repatriation referendum does not succeed. Because if Germany failed miserably to obtain 674 tons of gold in 2013, it is assured that Switzerland will find absolutely nothing in its quest to obtain more than double, or 1,500 tons, of gold as a successful November 30 referendum outcome would require.

Then again, considering it was Obama's action that destroyed the Swiss banking sector after the US crushed the centuries-long tradition of "Swiss banking anonymity", this could be just the right action with which "neutral" Switzerland could finally take its revenge on the regime that cost it what was for centuries the primary source of capital inflow into the small and so very prosperous (until then) central-European nation.

Quoted from Zero Hedge

[Magda Hassan]

Deutsche bank is quite a cesspit all its own. Maybe they didn't want to go there.....

[David Guyatt]

It's a really interesting continuing story, and the link to the "No indication should, of course, be given to the Bundesbank" is fascinating too.

[Peter Lemkin]

It's a really interesting continuing story, and the link to the "No indication should, of course, be given to the Bundesbank" is fascinating too.

What % of their gold is outside the country - seems like a lot, if not a majority. Isn't that a rather stupid thing to do...one would loose it in time of war, and likely loose it even in times of peaceful swindle.....

As for the USA being a good 'keeper' of others gold...we are not even a good custodian of our own. There has been no audit of US gold in decades - likely because there is much less than there should be - more likely there is none there now.....

[Lauren Johnson]

I can imagine somebody from Monty Python telling the Germans: "There isn't any. We spent it. So, piss off."

[Peter Lemkin]

I can imagine somebody from Monty Python telling the Germans: "There isn't any. We spent it. So, piss off."

The last audit of Fort Knox occurred in 1953.....There isn't any...of ours or of yours. So, piss off!...

The German government has been storing about half of its gold supply with the US FED, apparently in the NYC FED vaults. Germany decided to bring home all its gold, but the FED has said that isn't possible to do, and it would need until 2020 to be able to accomplish the transfer.
The German government then asked to visit the FED vaults to inventory the gold and determine its actual existence, but the FED refused to permit Germany to examine its own gold. The reasons given were "security" and "no room for visitors". And nothing else.
Germany did finally send some staff to the FED, and they were permitted only into the vault's anteroom where they were shown 5 or 6 gold bars as representative of their holdings, and were permitted nothing else.
They apparently came a second time, and the FED did open only one of 9 rooms and let the Germans look at the stack of gold, but were not permitted to either enter or touch. And they returned home.
There has been speculation for a long time, that the FED doesn't actually have much gold, that it has either sold it off, lent it out, or used it as collateral for borrowings. Either case, there are many claims that the gold that is being stored on behalf of many nations, doesn't actually exist.
And nobody, other than FED staff, have actually been permitted inside the vaults to see or inventory any of the gold. There is no evidence that the gold actually exists, other than the word of the FED.
Even more, the situation is the same with the supposed gold depository at Fort Knox. Nobody has seen the gold there for a very long time.
The last audit, and the last public visit, was in 1953, just after U.S. President Dwight Eisenhower took office. No outside experts were allowed during that audit, and the audit team tested only about 5% of gold there. So, there hasn't been a comprehensive audit of Fort Knox in over 60 years.
In 1974 six Congressmen, one Senator and the press were allowed to enter Fort Knox to see for themselves if the gold was there or not. The tour showed that there was gold in Fort Knox but, all the same, it sparked even more controversies.
Only a small fraction of the gold reserves were made available for viewing, and one Congressman published a report saying that the gold bars held in the fort may have been less heavy than would have been expected.
During the past two years, several US politicians have claimed that there is a high chance that neither Fort Knox nor the FED have any gold, or perhaps only a very small amount, and have demanded a full and public inventory and testing, but the FED have resolutely refused.
I have no idea what to make of this. There was another incident last year when Goldman Sachs were proven to have been selling gold certificates to the public, ostensibly backed by real gold in their vaults, but the story leaked out that they in fact held no gold at all, and were doing "fractional reserve" gold banking, on the basis that few people would want to claim their gold at any one time.
Even worse, Goldman were charging customers storage fees for the gold that didn't exist. Also, do you recall the information I circulated around the middle of last year, documenting the immense gold theft the FED pulled on much of the world during WW II?
The FED came to all countries in Asia, Latin America and Africa and told them their gold holdings might not be safe because of the war, and they should permit the FED to take all of it to the US for safekeeping. Many countries obliged, receiving FED gold certificates in exchange, but when they later tried to cash in those certificates and reclaim their gold, they were told the certificates were fake, that they contained spelling and other mistakes which the FED would never have made, and that the serial numbers were wrong. And the FED still has all that gold.
They even did that to Chiang Kai-Shek, taking all of Taiwan's gold that had been looted from China and never returning it. The last I heard, Chiang's wife was still trying to recover her gold from the FED.
Apparently a few people have been successful in presenting their certificates to the FED, with documentation that was irrefutable, but even in those cases the owners were forced to settle for only 1% or 2% of the actual value. And most other people or nations who attempt to redeem these certificates are arrested by the FBI for fraud at the request of the FED.
Late last year, a Canadian businessman had some of these certificates and tried to use them as collateral for a loan, and the FED had him arrested, extradited to the US, and charged him with fraud. Insiders claim this is common practice to frighten every one away.
Here id a graph that shows the increase in the FED's gold supply during the war. It also shows the amount decreasing heavily later, so perhaps some of the gold was returned, but it appears there was a great deal that never was.
For many years after the war, the FED denied these transactions and even denied the existence of these certificates. But a crashed US military plane was found in the Philppine jungle with heavy wooden boxes full of metal containers, all with FED markings, and all containing hundreds of billions of dollars of these same certificates. That was when the entire story finally became public, but the Western media have never cared to report on it.


Some people claimed this was a CIA counterfeiting operation supported by the US government, as an attempt to just steal the gold from many poor nations.

[Magda Hassan]

Makes Madoff look like the little junior league try hard he is in comparison.

[Magda Hassan]

It will be very interesting t see what happens with the Swiss demand for return of their gold. Different circumstances. I would expect a war to break out some where as a distraction if they cannot come to an arrangement and I don't know the Swiss will be so accommodating as Germany was in their case. The emperor really does not wear any clothes and it will be hard for them to tell us he does.

[Peter Presland]

This was written by a knowledgeable, dissident, ex-patriot German of humour and erudition - currently in Moscow and latterly resident in Kharkov Eastern Ukraine. It is the confession of a senior Bundesbank clerk to Washington to arrange the logistics of the return of the German gold with Ben Bernanke in the closing months of his Fed tenure. It is hilarious and probably very close to the nub of the matter too.

There's a list of many of his essays here and an archive of his old site here - careful, there's some deep stuff. His 'To be a German series' is particularly enlightening. He gifted me the final part but has requested that it not be published as he may need to return to Germany, such is the state of freedom of speech in the Federal Republic.

[David Guyatt]

This was written by a knowledgeable, dissident, ex-patriot German of humour and erudition - currently in Moscow and latterly resident in Kharkov Eastern Ukraine. It is the confession of a senior Bundesbank clerk to Washington to arrange the logistics of the return of the German gold with Ben Bernanke in the closing months of his Fed tenure. It is hilarious and probably very close to the nub of the matter too.

There's a list of many of his essays here and an archive of his old site here - careful, there's some deep stuff. His 'To be a German series' is particularly enlightening. He gifted me the final part but has requested that it not be published as he may need to return to Germany, such is the state of freedom of speech in the Federal Republic.

Based on that joyful satirical essay, Peter, I've decided to read the rest.