OVER 5 YEARS AGO, GERMANY BEGAN TO EARNESTLY SEEK TO 'REPATRIATE' ITS GOLD STORES FROM THE U.S. CENTRAL BANK.
THE FEDERAL RESERVE REFUSED!
IT IS STILL REFUSING TO ALLOW AN AUDIT OF THE GOLD STORES OF NOT ONLY GERMANY, BUT OTHER NATIONS' GOLD RESERVES STORED ON AMERICAN SOIL!
WHAT HAS THE FEDERAL RESERVE DONE WITH GERMANY'S GOLD?
WHY WON'T THE FED ALLOW ANY NATION A VISUAL AUDIT OF THEIR OWN GOLD BARS STORED IN THE UNITED STATES? WHERE IS ALL THAT GOLD?
October 23, 2012
For more than 50 years, Germany has kept a vast portion of its immense gold reserves – some 54,000 bars, worth billions of dollars – in a NY Federal Reserve Bank. But when the Germans demanded their gold be returned – a decision that rocked global financial markets – the Fed balked.
What’s worse, when Germany requested a full inspection and audit of their reserves, they were strongly denied. And each of their subsequent requests have also been denied. Why?
German Federal auditors handed in a report slamming the Bundesbank for not inspecting their foreign held gold reserves to verify their book value. The report says the gold bars “have never been physically checked by the Bundesbank itself or other independent auditors regarding their authenticity or weight.” Instead, it relies on “written confirmations by the storage sites.”
The lion’s share of Germany’s gold reserves (nearly 3,400 tons estimated at $190 billion) are housed in vaults of the US Federal Reserve, the Bank of England and the Bank of France since the post-war days, when they were worried about a Cold War Soviet invasion. The Bundesbank stated, “There is no doubt about the integrity of the foreign storage sites in this regard”. In contrast with best industry practices Germany’s gold reserves do not seem to be independently verified by a third party. Philipp Missfelder, a politician from Merkel’s own party, has asked the Bundesbank for the right to view the gold bars in Paris and London, but the central bank has denied the request, citing the lack of visitor rooms in those facilities, German’s daily Bild reported. The Bundesbank won’t let German parliament members inspect the German gold vaulted abroad because the central bank vaulting facilities supposedly lack “visiting rooms.“
Why Germany Wants its Gold Back.
The Significance of the German Gold Repatriation.
January 29, 2013
According to the plan, Germany's gold repatriation will take seven years to complete and by 2020, Germany will store 50% of its gold in Frankfurt. Several analysts consider that, since the gold will only be moving from one vault to another, this transfer will have no measurable market effect.
But I think it's a mistake to make that assumption. Instead, this news could have a significant psychological impact.
Others will follow Germany's lead. The Dutch are already making similar noises, asking for an audit and full transparency. The Netherlands also only has 10% of their gold reserves at home, with the rest in New York, Ottawa, and London. Now it's only a matter of time before others start to ask the same kinds of questions. In a recent tweet, Bill Gross said what many are probably already thinking: central banks just don't trust each other anymore.
There are suggestions Germany wants its gold because it's worried its loans to less fiscally responsible sovereigns won't be repaid. But I believe Germany is preparing in case the Euro were to eventually dissolve, so it wants its gold to potentially back a new Deutsche Mark. Perhaps they, too, recognize gold's return to its role as money.
A list of unanswered questions. The first is obvious: Is the gold really there? If so, why would it take seven years for Germany to get its gold back? Would you take the risk of collecting it slowly, or would you want it much faster? Some say the gold's there, yet others disagree. Steve Scacalossi, vice president and director, global precious metals at TD Securities, says Germany's gold is allocated, and therefore can't be lent out, so it will not affect gold lease rates.
Meanwhile, Keith Barron, a geologist and consultant responsible for one of the largest gold discoveries in 25 years, recently told King World News:
"I believe that most of the Western world's gold, which is supposed to be in central bank vaults, has been leased out. Much of it is now in private hands in India, and what remains continues going East to China and other Asian vaults. So most of the Western gold has vanished from the vaults and it's now just a book entry. These various Western countries and bullion banks simply roll these leases over when they come due, and the gold never gets returned back to the countries. So it's very interesting to see what's going on. Obviously the trust is breaking down in the system."
While some could easily dismiss Germany's behavior as that of a distrustful state, there's precedent for Barron's claims.
The Story Behind Portugal's Lost Gold
In 1990 Drexel Burnham Lambert, one of America's largest investment banks, filed for bankruptcy. Drexel's failure is famously blamed on junk bond trader Michael Milken.
But few know that the central bank of Portugal had loaned 17 tons of gold to Drexel. When the firm failed, Portugal's claim on its gold simply evaporated.
That was more than two decades ago at a time when almost no one was interested in gold, which then traded at $380.
Today, gold sells for $1,660 per ounce, and now a lot more people are paying attention.
The fact is, IF Germany's gold is really sitting in the vaults of the New York Fed and the Banque de France, it shouldn't take until 2020 for it to make its way back home.Seven months – maybe. Seven years means something else is up, and that raises suspicion.
Such a delay makes you wonder if these central banks aren't being forced to "buy back" the gold they may have leased out.
Anthem Blanchard, CEO of Nevada-based Blanchard Vault, a precious metals storage company, appears to agree with PIMCO's Bill Gross.
Mr. Blanchard recently told Canada's Globe and Mail, "most importantly, the action of repatriation signifies the acknowledgement of credit risk and the Bund's [Bundesbank's] concern of any possibility that gold held at the Fed may be over-pledged in some manner."
Meanwhile, the physical gold market is one that many already consider to be rather tight.
If Germany calling in its gold unleashes a run by other nations on central-bank-stored gold, the physical market could react with a massive squeeze.
That's in addition to the fact central banks are stepping up their gold acquisitions. As a group, they bought more gold in 2012 than at any time in almost 50 years.
Now it's entirely possible that fear's been struck in the hearts of central bankers around the world.
That means the price of gold could skyrocket.
For investors, the lesson is simple: Learn from Portugal's failure.
Be like Germany, and get yourself some physical gold.
German Calls for Gold Repatriation Intensify As Fed Refuses to Allow Inspection.
November 22, 2012
Calls for Germany to repatriate its 1,536 tons of gold reserves held at the NY Fed are intensifying as Der Spiegel reports the Federal Reserve has refused to allow German inspectors to even view the country’s massive gold reserves “in the interest of security and of the control process“.
We have stated repeatedly that with repatriation and/or audit requests completed or in progress by Venezuela, Germany, Switzerland, and the Netherlands, the BOE and the Fed suddenly find themselves in a heap of trouble as the situation (and confidence that the Central banks actually still hold the gold reserves on deposit) is rapidly deteriorating.
The Federal Reserve Bank of New York continues to hold 1,536 metric tons of German gold — or nearly half of Berlin’s reserves. This enormous hoard of gold is stored in the fifth subfloor of the bank’s building on Liberty Street, 25 meters (80 feet) below street level, and 15 meters below sea level. According to the bank’s website, the vault rests on the bedrock of Manhattan Island.
The Fed has reportedly denied German requests to view their own gold reserves, ‘in the interest of security’.
Of the 9 compartments supposedly storing German gold, German officials were finally allowed to briefly view a few bars from a single compartment in 2011.
In fact, auditors from the Bundesbank had to make a second visit in May 2011. This time one of the nine compartments was also opened, in which the German gold bars are densely stacked. A few were pulled out and weighed. But this part of the report has been blacked out — out of consideration for the Federal Reserve Bank of New York.
Unlike the US financial MSM, the German media is willing to discuss not only the question of whether the Federal Reserve has absconded with Germany’s gold, but also the risk of a collapse of a fully fiat currency.
In a bid to calm the debate, the Bundesbank has pledged to bring back and inspect 150 tons of gold from abroad over the next three years. Furthermore, there are plans to count and weigh the gold bars stored in one of the nine chambers at the Fed in New York — although no date has been set for this.
While Bundesbank officials likely understand the reality (much better than German politicians do) that a German repatriation of it’s entire 1,536 tons of gold reserves held at the NY Fed would likely cause a complete Western financial collapse if/when the Fed failed to promptly deliver said gold (tungsten free), confidence in the Fed and the BOE has clearly been shattered, and it is now only a matter of time for an absolute mad run on every last gram of physical metal underneath the NY Fed ensues.
[READ DER SPIEGEL ARTICLE HERE: http://www.spiegel.de/international/germany/german-politicians-demand-to-see-gold-in-us-federal-reserve-a-864068.html ]
October 22, 2012
Unease about Germany's unchecked gold reserves.
Germany's central bank has failed to properly oversee the country's massive gold reserves, which have been stored abroad since the Cold War in case of a Soviet invasion, independent auditors say.
The central bank must renegotiate its contracts to gain the right to inspect its gold bars, which are worth tens of billions of dollars and are stored in the United States, Britain and France, the Federal Auditors' Office said in a report to lawmakers obtained by The Associated Press on Monday.
The report says the gold bars "have never been physically checked by the Bundesbank itself or other independent auditors regarding their authenticity or weight." Instead, it relies on a "written confirmations by the storage sites."
Most of Germany's gold reserves — some 3,400 tons worth an estimated $190 billion at current rates — have been kept in the vaults of the U.S. Federal Reserve, the Bank of France and the Bank of England since the postwar days, when Berlin worried about a possible land war with the Soviet bloc.
Do Western Central Banks Have Any Gold Left???
October 2, 2012
Somewhere deep in the bowels of the world’s Western central banks lie vaults holding gargantuan piles of physical gold bars… or at least that’s what they all claim. The gold bars are part of their respective foreign currency reserves, which include all the usual fiat currencies like the dollar, the pound, the yen and the euro.
Collectively, the governments/central banks of the United States, United Kingdom, Japan, Switzerland, Eurozone and the International Monetary Fund (IMF) are believed to hold an impressive 23,349 tonnes of gold in their respective reserves, representing more than $1.3 trillion at today’s gold price. Beyond the suggested tonnage, however, very little is actually known about the gold that makes up this massive stockpile. Western central banks disclose next to nothing about where it’s stored, in what form, or how much of the gold reserves are utilized for other purposes. We are assured that it’s all there, of course, but little effort has ever been made by the central banks to provide any details beyond the arbitrary references in their various financial reserve reports.
If Frank Veneroso’s conclusions were even close to accurate back in 1998 (Frank Veneroso published an outstanding report on the gold market in 1998 aptly titled, “The 1998 Gold Book Annual”. In it, Mr. Veneroso inferred that central bank gold sales had artificially suppressed the full extent of gold demand to the tune of approximately 1,600 tonnes per year. Of the 35,000 tonnes that the central banks were officially stated to own at the time, Mr. Veneroso estimated that they were already down to 18,000 tonnes of actual physical gold. Once the central banks ran out of gold to sell, he surmised, the gold market would be poised for a powerful bull market… and he turned out to be completely right – although central banks did continue to be net sellers of gold for many years to come.), when coupled with the 2,300 tonne net change in annual demand we can easily identify above, it can only lead to the conclusion that a large portion of the Western central banks’ stated 23,000 tonnes of gold reserves are merely a paper entry on their balance sheets – completely un-backed by anything tangible other than an IOU from whatever counterparty leased it from them in years past. At this stage of the game, we don’t believe these central banks will be able to get their gold back without extreme difficulty, especially if it turns out the gold has left their countries entirely. We can also only wonder how much gold within the central bank system has been ‘rehypothecated’ in the process, since the central banks in question seem so reluctant to divulge any meaningful details on their reserves in a way that would shed light on the various “swaps” and “loans” they imply to be participating in.
We realize that some readers may scoff at any analysis of the gold market that hints at “conspiracy”. We’re not talking about conspiracy here however, we’re talking about stupidity. After all, Western central banks are probably under the impression that the gold they’ve swapped and/or lent out is still legally theirs, which technically it may be. But if what we are proposing turns out to be true, and those reserves are not physically theirs; not physically in their possession… then all bets are off regarding the future of our monetary system.
If the Western central banks are indeed leasing out their physical reserves, they would not actually have to disclose the specific amounts of gold that leave their respective vaults. According to a document on the European Central Bank’s (ECB) website regarding the statistical treatment of the Eurosystem’s International Reserves, current reporting guidelines do not require central banks to differentiate between gold owned outright versus gold lent out or swapped with another party.
October 16, 2012
After months of dragging their feet and claiming it was necessary for national security reasons to keep the info classified (sounds like an freedom of information request to the Fed) The Bank of Mexico has been forced to comply with the Federal Transparency Law and release information revealing where the Central Bank’s gold reserves are held.
In what will not be a surprise to any SD reader, the report reveals that The Bank of Mexico holds less than 5% of it’s gold reserves within Mexico, while the remaining 95% of it’s ‘physical’ gold reserves are held in the US and London (translation- nearly the entirety of Mexico’s gold reserves are held at the Bank of England and the NY Fed basement, and have likely been rehypothecated more times than an MFG client’s assets).
Last year the story went around the world: Banco de México (Banxico) refused to reveal in what country its reserves of gold were stored. Mexico was on the world stage as regards gold, after it purchased 93 tonnes, and rose in the global ranking of gold reserves calculated by the World Gold Council.
Today, thanks to the Federal Transparency Law, Banxico has become perhaps the first central bank to reveal in writing the amounts of its gold holdings as well as the names of its custodians and the locations where it s gold holdings are supposedly held.
It was quite difficult to obtain this information, for the Bank refused again and again to hand over the information until compelled to do so by a ruling of its own “Department of Management for Rules Control”, which is the entity in charge of dealing with appeals presented as “Appeals for Revision”.
The wrangling went on for four months, during which Banxico insisted that it was necessary to classify as “Reserved” all information referring to its gold position; it claimed that revelations might “harm the financial, economic or monetary stability of the country”.
SO, WILL GERMANY OR ANY OTHER NATION EVER AGAIN SEE ITS TONS OF GOLD BARS? WILL THE FED EVER ONCE ALLOW AN AUDIT, BY A FOREIGN NATION OR BY OUR OWN CONGRESS? BERNANKE THREATENED THE U.S. CONGRESS THE LAST TIME THAT CAME UP, REMEMBER?