Bundesbank to Repatriate 374 Tons of Gold From Bank of France, Substantial Portion of Gold Held at t

mmerlinn

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Because you have to ask yourself, why would Germany decide to do this? What do they see that the rest of us don’t see that requires them to physically move this gold out of lower Manhattan and obviously in Paris, as well, back to their borders?
I can think of several reasons why.

First, France is rapidly becoming another Greece and Germany does not want her gold at risk. Second, if France becomes another Greece and still has German gold, France has a carrot to extract help from Germany that the Germans may not want to give. With no German gold in France, Germany can treat the French just as they did Greece and are commencing to do with Cyprus, basically economically colonizing (enslaving) them. In a nutshell getting the gold out of France finalizes the divorce of France and Germany.

Much the same can be said for the U.S., but we are bigger, further away, and not yet to the stage France is. Once it becomes clear that the U.S. is on the rocks, Germany will divorce us, too.

From a military point of view, having the gold home makes a lot of sense. If Germany is beholden to no one, Germany can pursue whatever avenue she wants to pursue without fear of the consequences of an economic meltdown. A country with unbacked money can be blackmailed with threats of destroying the economic system of that country through massive counterfeiting of that country's money. Gold prevents that Damocles sword syndrome.

These are just some of the reasons to repatriate the gold. From my perspective, and I am sure from Germany's perspective, a bird in the hand is worth two in the bush.
 

ancona

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Here's an idea, howzabout we petition to see our own gold?

Oh that's right, we already did and they said NO!
 

rblong2us

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I can think of several reasons why.

First, France is rapidly becoming another Greece and Germany does not want her gold at risk. Second, if France becomes another Greece and still has German gold, France has a carrot to extract help from Germany that the Germans may not want to give. With no German gold in France, Germany can treat the French just as they did Greece and are commencing to do with Cyprus, basically economically colonizing (enslaving) them. In a nutshell getting the gold out of France finalizes the divorce of France and Germany.

Much the same can be said for the U.S., but we are bigger, further away, and not yet to the stage France is. Once it becomes clear that the U.S. is on the rocks, Germany will divorce us, too.

From a military point of view, having the gold home makes a lot of sense. If Germany is beholden to no one, Germany can pursue whatever avenue she wants to pursue without fear of the consequences of an economic meltdown. A country with unbacked money can be blackmailed with threats of destroying the economic system of that country through massive counterfeiting of that country's money. Gold prevents that Damocles sword syndrome.

These are just some of the reasons to repatriate the gold. From my perspective, and I am sure from Germany's perspective, a bird in the hand is worth two in the bush.
this is an 'us and them' isolationist approach.
Previous attempts to do this created wars.
The whole idea was to share everything and be equal trading partners thus removing any temptation to fall out.

I see no good coming from bringing home the gold, even though I totally understand the sentiment ............

A bit of 'fourth turning' in play )-:
 

mmerlinn

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this is an 'us and them' isolationist approach.
Previous attempts to do this created wars.
The whole idea was to share everything and be equal trading partners thus removing any temptation to fall out.

I see no good coming from bringing home the gold, even though I totally understand the sentiment ............

A bit of 'fourth turning' in play )-:
Exactly. And the same thing will happen again.
 

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pmbug

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There have been widespread stories that the Fed does not have the gold to return as gold held for governments is usually, ‘unallocated’. This suggests that the German gold reserves were not ‘allocated’. Ordinarily, central bank monetary reserves should be held in an ‘allocated’ format to evidence to whom they belong. As it is, held in an ‘unallocated’ form, in simplistic terms, this means that should the Fed fail, foreign central banks holding their gold there would be that unsecured creditors. This concern has been voiced inside Germany. It has been noted that the gold of Germany has not been audited in the past and it should be, on a regular basis. The German Court of Auditors told legislators that the gold had "never been verified physically" and ordered the Bundesbank to secure access to the storage sites. It called for repatriation of 150 tons over the next three years to test the quality and weight of the gold bars. But Germany has decided to move more than in this recommendation. It is said that Frankfurt has no register of the numbered gold bars.
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As we said above, the move of this gold to Frankfurt will allow time to ensure the central banks where the gold is held, to get hold of the gold if they do not have it at the moment. The prospect of developed world central banks now competing with those of the emerging world in the gold market may well start the next leg of the gold bull market because this new, persistent, price-insensitive buying has the power to take gold to a whole new level! We watch to see. If this does happen, then the whole nature of gold in the money system will change even before the changes are ‘officially’ accepted. Gold will be in a ‘de facto’ pivotal position in the monetary system again. It will be a short time from that point before it is ‘officially’ accepted then. The way will have been paved for China to arrive on the scene and gold to have a vital function in the monetary system between two very different and unconnected, politically and economically, power blocs, the developed world and the emerging world with China as its hub.

The last time the world was divided on this basis was at the start of both world wars. The consequences to the monetary world then were so devastating and saw the destruction of national currencies on both sides, in Europe.
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More: http://www.ibtimes.com/big-picture-behind-germany-taking-half-its-gold-home-1042254
 

mmerlinn

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The last time the world was divided on this basis was at the start of both world wars. The consequences to the monetary world then were so devastating and saw the destruction of national currencies on both sides, in Europe.
We are witnessing history repeating itself again. Get prepared.
 

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Large image:
 


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Wanna know what I think, folks? I think the central banks have been leasing their gold out for decades to the bullion banks and now find themselves in the rather precarious position of needing to reclaim that which they are supposed to own before the shortfall is exposed. I think that creates a big problem for both sides of that little scheme.

I think the smash in paper was specifically designed to shake out loose holders — and it has worked to a degree, but only amongst the weaker holders of the ETFs, who tend to "rent" gold rather than own it. I think the stronger hands have been getting their gold out of the official warehouses as fast as they can; and central banks in places like China, Russia, and all over the rest of Asia and South America have been trying to buy and, crucially, to take delivery of physical gold while they still can.

I also think that retail investors — particularly here in Asia — are, unfortunately, compounding the banks' problems by using the weakness in the paper markets to acquire as much physical metal (or, as it's known in this part of the world, "wealth") as they can.
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Long: http://www.mauldineconomics.com/ttmygh/what-if
 

swissaustrian

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Correlation might not equal causation here:

1. The repatriation is said to be spread over 7 years, so why the rush?

2. ETFs have lost much more than 374 tons in 6 1/2 months.

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But it might support my suspicion that ETF inventories are in fact COMEX (fractional reserve) futures which would be a major scandal. See my argument here: http://www.pmbug.com/forum/f13/comex-deliveries-registered-gold-silver-too-15/index2.html#post20433

Kyle Basses take on the COMEX:

 

pmbug

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1. The repatriation is said to be spread over 7 years, so why the rush?
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Maybe the Bundesbank repatriation news really did spark other sovereigns to start some (quite) repatriation efforts of their own. Or maybe it just started a "bank run" on physical gold. Or China might be applying the screws all by themselves. Or some combination thereof.
 

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J S Kim said:
Below is a recent correspondence from our friend Lars Schall, an independent financial journalist, and the German Central Bank, the Deutsche Bundesbank, regarding the exact whereabouts and specifications of Germany’s national gold reserve. From the correspondence below, it appears that the US Central Bank had already leased out Germany’s gold reserves in prior years and no longer has it, as the gold bars the US Central Bankers returned to Germany last year were clearly not the same ones that Germany originally deposited with them. The questions Mr. Schall’s revelations now beg is (1) if the Banque de France and the Bank of England have Germany’s original gold as well; and (2) if the various Central Bankers are deliberately returning Germany’s gold on a painfully slow timeline because they have already leased out Germany’s gold into the open market in prior years, no longer hold it, and must therefore scrape together Germany’s gold from the open market now.
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More: https://www.smartknowledgeu.com/blo...housed-in-new-york-paris-and-london-all-gone/

Edit: Looks like GATA broke the original story: http://www.gata.org/node/13458
 

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I rarely put on my tinfoil hat (at least in my own view) but this is a case for putting it on. There's no sane reason I can think of that fits the facts so well, other than we simply don't have the gold to repatriate. We know the reputation of truthiness or lack thereof of those who tell us it's something else.

Hence some on-the-sly otherwise-illegal paper short-selling by various parties, to drive down the price of phys so they can get it to repatriate - in 7 years what fedex could move in a day or two. And even now, they are well behind the 7 year schedule!

I think the ZH article and some of the comments might be on-point. I'm not sure about the implications for the price of gold in FRNs, or if that will really mean much if TSHTF anyway - I'd be more interested in the price of gold in, say, beef, or loaves of bread, or firewood.

There's truly a counterparty risk in any asset, gold included. Gold just has a much better track record figured over long time intervals than anything else much. But there will always be exceptions.

Think of this (obviously somewhat artificial) case. One guy in the desert, dying of thirst. Another guy passing through who has just enough water on him to make it himself. Will he take the first guy's gold for his canteen? I wouldn't - it's not worth my life: dead+rich still == dead.. Counter-party risk. That said, it's a pretty unusual scenario.

But we've discussed similar things here - what about food shortages? In that case, I'd rather have the food, or both, than just gold. My goal is to be self-sufficient to the greatest practical degree, and that vision incorporates many mechanisms.

While I will trade/speculate with paper some, the stash is the stash, I still feel if you can't drop it on your toe and go ouch (and defend it from would-be confiscators), it ain't yours. That's also true of the food stash, the land, the...you name it. Looks like the Germans woke up a little late in the game here. Hardly news, they also bought a lot of CDOs...
 

DCFusor

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Interesting head-fake over at ZH, which proves my point above (yeah, I'm not actually into replying to myself) but it's worth noting.
http://www.zerohedge.com/news/2014-01-08/proof-golds-latest-slam-was-not-fat-goldfinger


So, someone who owns some bots (anyone with the dough) is smashing the paper price of gold.
This someone (or someones, but this time it seems like just one) has an obviously unlimited checkbook/collateral, and zero fiducial responsibility to get a good execution on anything, in fact, this particular episode tripped the trade breakers. They go on about the 'bots and all.
I find it more interesting who the owners of those bots are, or who controls them at any rate via whatever mechanism and intermediary. No one does this unless they want to lose money - the only other possible explanation, assuming any rationality whatever on the player's part, is that they are making money elsewhere - either off another trade that goes the other way (but we don't see that market smashed or zoom and breakers trip), or someone simply wants a lower price on gold, since the price of physical is for now, linked to the paper price.

The list of even-possible candidates is quite short. There aren't that many who can do this at all. Need I name them? I found the misdirection interesting, as if computers programmed themselves (it's as if guns shot people, or knives jumped off the table and cut you - it's more interesting who was holding it at the time than the fact that either is dangerous).
 

rblong2us

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I thought they were smashing the price at appropriate moments in order to create a buying opportunity, then recovering their costs plus a profit when they re-sell before the next smash .........

or is that just too simple ?
 

DCFusor

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I guess that could happen - but it's darn dangerous for whoever is doing it, if they are. If they scare all the retail out of gold, who's going to ramp it back up?
 
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