The Bundesbank, Germany’s powerful central bank, announced very publicly this morning the further repatriation of some of it’s gold being held in foreign locations – namely in Paris and New York with the Bank of France and the Federal Reserve. [...] According to the German central bank’s own data, 1,447 tonnes are stored at the Federal Reserve Bank in New York, 438 tonnes at the Bank of England in London and 307 tonnes at the Banque de France in Paris. Since the transfers began in 2013, the Bundesbank said it has relocated a total of 157 tonnes of gold to Frankfurt – 67 tonnes from Paris and 90 tonnes from New York. [...] It is important to remember that out of nowhere, the Netherlands secretly repatriated 122 tonnes of the their gold reserves from New York to Amsterdam in 2014. [...] Since the global debt crisis and indeed the U.S. and Eurozone debt crisis, there have been grassroots movements for central banks to repatriate their gold to home soil – in order to ensure that it can be used a a reserve asset in the event of a monetary crisis. [...] However, a curious element to the statement will likely trigger some speculation among those familiar with the gold market. “The Bundesbank took advantage of the transfer from New York to have roughly 50 tonnes of gold melted down and recast according to the London Good Delivery standard, today’s internationally recognised standard.” Long time observers will note that Germany’s initial request for it’s gold from New York was declined. They were then denied the opportunity to even view their own gold on grounds of “security.” This led to speculation that the Federal Reserve – who have not had a public audit of gold stocks since 1953 – did not have the gold reserves it was supposed to be custodian of. The immediate melting down of fifty tonnes of gold before it could be publicly audited in Germany will not alleviate these suspicions. From a wider perspective this story reaffirms the fact that central banks today, the monetary masters of the fiat currencies we use, still view gold as a vital safe haven monetary asset and reserve currency. It also indicates a lack of trust between central banks, a trust which seems to have been further undermined by the chaos created by the apparent unilateral move by Switzerland’s SNB last week.
Posted on: Tue, 20 Jan 2015 11:32:47 +0000
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