34 votes

German Budesbank To Repatriate Gold from New York Fed

“Trust in central banks by other central banks is ending”

by Tyler Durden | 01/14/2013 | Zero Hedge

In what could be a watershed moment for the price, provenance, and future of physical gold, not to mention the "stability" of the entire monetary regime based on rock solid, undisputed "faith and credit" in paper money, German Handelsblatt reports in an exclusive that the long suffering German gold, all official 3,396 tons of it, is about to be moved.

Specifically, it is about to be partially moved out of the New York Fed, where the majority, or 45% of it is currently stored, as well as the entirety of the 11% of German gold held with the Banque de France, and repatriated back home to Buba in Frankfurt, where just 31% of it is held as of this moment. And while it is one thing for a "crazy, lunatic" dictator such as Hugo Chavez to pull his gold out of the Bank of England, it is something entirely different, and far less dismissible, when the bank with the second most official gold reserves in the world proceeds to formally pull some of its gold from the bank with the most.

In brief: this is a momentous development, one which may signify that the regime of mutual assured and very much telegraphed - because if the central banks don't have faith in one another, why should anyone else? - trust in central banks by other central banks is ending.

Read more: http://www.zerohedge.com/news/2013-01-14/it-begins-bundesban...

Trending on the Web

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Who can blame them?

Yeah, um, yeah...do you have the original receipt?....um...yeah, sure... Can you show me some ID?....um..errr....well....um.. these things take time.....

With all these

With all these privately owed central banks demanding "their" gold back.

Let me guess. A gold standard will soon be on the cards with "the owners" having all the gold.

Talk about jumping from the pan into the fire. So much for the gold bugs.

Luke 3:38
Isaiah 43:3-5


Can have their gold back if they can say the word...'squirrel'


Swiss want their gold as well

"A Swiss Initiative to Secure the Swiss National Bank’s Gold Reserves" recently launched by four members of the Swiss parliament states that the Swiss people should have a right to vote on 3 simple things:

i) keeping the Swiss gold physically in Switzerland
ii) forbidding the SNB from selling any more of its gold reserves
iii) the SNB has to hold at least 20% of its assets in gold.


Seems that the Austrians have lost confidence in Keynes...

"One resists the invasion of armies; one does not resist the invasion of ideas" Victor Hugo


The underlying fear is that the Fed has been doing exactly what the goldsmiths did hundreds of years ago. Basically, wealthy patrons began depositing their gold with the goldsmiths for safe keeping. In return they received a piece of paper saying that they had X amount of gold in the goldsmiths vault. The idea was that the paper gold note could always be traded in to the goldsmiths for the amount of gold that it represented, on demand. Soon people started to simply trade the paper note that represented X amount of gold instead of trading the actual gold itself. This began to happen simply because a paper note for 100 lbs of gold is easier to carry on ones person than, well, 100 lbs of gold.

This basically gave the goldsmiths the power to create "gold" out of thin air. They realized that they could make a killing by creating and loaning out paper gold notes as people accepted them as currency since they were "as good as gold." The goldsmiths would basically turn a profit by either receiving real gold in repayment by the debtor, or by acquiring the hard assets that the debtor had purchased with the fake paper gold when he became unable to pay back his debt to the goldsmiths. The amount of "paper gold" that was in circulation quickly became greater than the amount of actual gold that was held in the goldsmiths vault. As long as they held enough gold in their reserves to take care of a regular days real gold withdrawals, then they were in the clear. Thus the fractional reserve banking system was born.

All was going peachy keen for the goldsmiths until one day, one too many patrons attempted to trade in their paper gold notes for real gold on deposit, and the vault ran dry. The goldsmiths fraud was exposed, their business bankrupt and the medieval monocle wearing swindlers likely received a spirited tar and feathering. Huzzah!

Now back to Jan 2013. Germany has basically cast a vote of NO CONFIDENCE in the US Federal Reserve by beginning to withdraw their gold. They have decided that they are not going to be the ones left standing and empty handed when the musical chairs tune stops playing.

SteveMT's picture

It will take 7 years to repatriate Germany's gold. Slow boats?

[See chart at link.]
What is news is that courtesy of the supplied calendar of events in the Buba statement, it will take the Fed some seven years to procure Germany's 300 tons of gold. This is the same Fed that, in its own words, holds some "216 million troy ounces of gold" or some 6720 tons, in its vault 80 feet below ground level.

Putting the above in perspective, the amount of gold that Germany will have to wait 7 years for is shown in red. The amount of gold the Fed supposedly holds, is shown in yellow with a shade of tungsten. Why it will take the Fed 7 years to part with an amount of gold that is less than 5% of its total holdings is anyone's guess...

unless of course, the bulk of the gold in the column on the right has been rehypothecated numerous times to serve as collateral for countless counterparties, and it is no longer clear just who own what to anyone.

The following table shows the current and the envisaged future allocation of Germany’s gold reserves across the various storage locations:
---------------31 December 2012------31 December 2020
Frankfurt am Main----31 %-----------------50 %
New York ------------45 %-----------------37 %
London --------------13 %-----------------13 %
Paris ---------------11 %------------------0 %

circuit boards

it will take seven years for Germany to receive a certain proportion of its gold held there (20% i think) because it will take that long for the Fed to recover that amount of gold from old circuit board contacts.

Fear of a run

If the process were quick you would see other countries pulling out their gold.

Last time a request like that came from multiple governments Richard Nixon pulled us off the gold standard "temporarily."

"One resists the invasion of armies; one does not resist the invasion of ideas" Victor Hugo

That begs the question: What

That begs the question: What happens next if the US does not have gold to repatriate to Germany?

Loss of confidence

What happens if (when) it is discovered the US does not have the gold? Loss of confidence in the USD.

But before the hoax is publicly exposed the US will put pressure on Germany to "audit" its gold but not repatriate. Germany, with multiple US bases on its soil and reliance on US markets will be hard pressed not to back down.

This is one to watch and you will not see much reported.

"One resists the invasion of armies; one does not resist the invasion of ideas" Victor Hugo

Unfortunately most people

Unfortunately most people will have no idea what this means.

ecorob's picture

they may have no idea now...

but the repercussions will slap them in the face like a cold fish!

i, for one, believe there is NO gold at the new york fed and they couldn't return germany's gold even if they wanted to...

or, if i am wrong, there is NONE of AMERICA'S GOLD left and sending the other country's gold home as they requested depletes whatever supply of gold this country has left

where does that leave us? holding worthless, fiat, paper!

Germany wants it's gold back!
France wants it's gold back!
Venezuela wants it's gold back!
China wants it's gold back!
Russia wants it's gold back!

This list goes on and it is long...ask yourself, why?

its 'cos I owe ya, my young friend...
Rockin' the FREE world in Tennessee since 1957!
9/11 Truth.

SteveMT's picture

Bundesbank Official Statement On Gold Repatriation

They are trying to keep a lid on things. In other words, CONFIDENCE IS IN THE TOILET. Question: How will they demonstrate that all of this is not a show?...That the gold is real? Remember the queen being paraded through a gold-filled vault a few months ago? That was also a real confidence builder [Not].

"By 2020, the Bundesbank intends to store half of Germany’s gold reserves in its own vaults in Germany. The other half will remain in storage at its partner central banks in New York and London. With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time. The withdrawal of the reserves from the storage location in Paris reflects the change in the framework conditions since the introduction of the euro. Given that France, like Germany, also has the euro as its national currency, the Bundesbank is no longer dependent on Paris as a financial centre in which to exchange gold for an international reserve currency should the need arise. "


from one central bank to another?...... Doesn't exactly seem in safe hands there either...

not according to CNBC's Bob

not according to CNBC's Bob Pisani. He thinks they want to save on storage fees.


“Let it not be said that no one cared, that no one objected once it’s realized that our liberties and wealth are in jeopardy.”
― Ron Paul

I see the panic starting everywhere...

Go on any blog, watch youtubes, the beginning of the end is here. Pull $5k out of the bank for an emergency now.

Thank you Daily Paul for your dedication and hard work.


Can you lend me $5K?

Ed Rombach


They lost the greatest/worst war in the history of the vorld. I don't see how this is theirs? To the victor go the spoils. Giving it back should be treason imo.


This is big.

This is big.