Last year, Germany blew up headlines when its central bank – the Bundesbank – announced that it was planning to repatriate its gold from the United States Federal Reserve, the Bank of England and the Banque de France. The Bundesbank owns nearly $200 billion worth of gold, but only a third of it is stored in Frankfurt.
A German delegation was sent to New York to audit the nation’s gold holdings because one hadn’t been performed in a few decades. The group confirmed that everything was fine and that it would be easier to just simply store its gold reserves outside of the country for emergency swaps.
A year later, it was reported that Germany has only been able to recover five tons of gold from the New York Fed. The Bundesbank explained the situation by noting it’s simpler to transport its gold holdings stored in Paris as opposed to repatriating the yellow metal overseas. Another reason was that the gold bullion in Paris maintains an elongated shape with beveled edges of the “London Good Delivery” standard.
Several months after this revelation, it is now being reported by Bloomberg News that Germany has officially given up trying to reclaim its gold in New York. Norbert Barthle, the budget spokesperson for Angela Merkel’s Christian Democratic bloc in parliament, said that the U.S. is doing a very good job looking after the country’s gold and there would be no need for any sort of mistrust.
Financial experts posit that this latest move is a rebuff to critics of the euro who want all of its bullion returned to the vaults of Frankfurt. Instead, according to some analysts, it would be a prudent decision to allow the U.S. to store Germany’s gold reserves.
“The Bundesbank never doubted the integrity of the foreign gold-storage sites,” said Carl-Ludwig Thiele, the bank’s council member for payments and settlements. “We were able to see everything we wanted to see in New York. As far as we’re concerned, there are no more open issues.”
ZeroHedge speculates that the physical gold really isn’t at the Fed and Germany just decided to allow the U.S. to keep their “paper promises of ownership.”
In the meantime, Peter Boehringer of Repatriate Our Gold, says the “campaign is on hold” right now. However, he expanded upon his comments on the Liberty Blitzkrieg website, in which he stated that his group is not satisfied with the decision and that the original source of news did not provide any real updates because there hasn’t been any since the move was first announced last year.
Others are also pessimistic about the decision, including Terry Ponic of Communities Digital News, who wrote Tuesday:
“Germany’s official position at the moment appears to be to downplay this uncomfortable situation while still looking to get its gold back in Germany under its own government’s lock and key. The greater question — too complicated to get into here — involves increasingly clear evidence that, via paper contracts and ETFs, the international banking system is lending and re-lending physical gold reserves to keep gold’s price under $1300 per ounce as regularly as possible.”
In the past week, the price of gold has surged and is now trading beyond $1,300 an ounce. Silver, meanwhile, has also surpassed the $20 mark and is trading at just about $21 per ounce.
