Why Did The Bundesbank Secretly Withdraw Two-Thirds Of Its London Gold?Submitted by emalvini on Thu, 10/25/2012 - 12:57
Why Did The Bundesbank Secretly Withdraw Two-Thirds Of Its London Gold?
Submitted by Tyler Durden
10/24/2012 20:51 -0400
Two days ago we reported that the German Court of Auditors demanded that the German Central Bank, the Bundesbank, verify and audit its official gold holdings consisting of 3,396 tons, held mostly offshore, namely New York, London and Paris, at least according to official documents. It also called for repatriation of 150 tons in the next three years to perform a quality inspection of the tungsten gold. Today, in a surprising development, via the Telegraph we learn that none other than the same Bundesbank which is causing endless nightmares for all the other broke European nations due to its insistence for sound money, decided to voluntarily pull two thirds of its gold holdings held by the Bank of England. According to a confidential report referenced by the Telegraph, Buba reclaimed 940 tons, reducing its BOE holdings from 1,440 in 2000 to 500 in 2001 allegedly "because storage costs were too high." This is about as idiotic an excuse as the Fed cancelling its reporting of M3 in 2006 because "the costs of collecting the underlying data outweigh the benefits." So why did Buba repatriate its gold? Ambrose Evans-Pritchard has an idea.
The shift came as the euro was at its weakest, slumping to $0.84 against the dollar. But it also came as the Bank of England was selling off most of Britain's gold reserves – at market lows – on orders from Gordon Brown.