Results 1 to 10 of 10

Thread: Germany brings its gold stash home sooner than planned

  1. #1
    Contributor Toby's Avatar
    Join Date
    06 Nov 16
    Location
    Manchester
    Posts
    566

    Germany brings its gold stash home sooner than planned

    By Andreas Framke | FRANKFURT

    Germany's central bank is bringing home gold reserves stored in places like New York and Paris faster than planned, it said on Thursday, as confidence in the euro ebbs even in the heart of the currency bloc after a decade of a sluggish economy.

    Stashed away at the height of the Cold War in safe havens well out of Moscow's reach, the 3,378-tonne, 120 billion-euro (102 billion-pound) gold stockpile has become a symbol of Germany's economic ascent and a guardian of its stability.


    But with Europe stumbling from crisis to crisis, the German public has grown uneasy about keeping the gold abroad. Some even argue the world's second biggest bullion reserve may be needed to back a new deutschmark, should the euro zone break up.


    Having already moved 583 tonnes of gold out of New York and Paris, the Bundesbank plans to have half its gold in Frankfurt by the end of 2017, years ahead of its 2020 schedule, with the rest split between the Federal Reserve Bank of New York and the Bank of England.


    "We have a lot of discussions about (U.S. President Donald) Trump, regarding implications on monetary policy, macroeconomics, etc., but we trust the central bank of the U.S.," Bundesbank board member Carl-Ludwig Thiele told a news conference.


    "Trump has not triggered a discussion about the storage facility in New York," he said.


    With French Presidential candidate Marie Le Pen and Italy's 5-Star Movement openly campaigning to pull their nations out of the euro, confidence in the common currency appears to be waning.


    Opponents argue that the rigidities of the currency union force them from austerity to austerity, keeping unemployment high, wages low and competitiveness weak, perpetuating economic malaise that actually drives countries apart and failing the key goal of the euro.

    Thrifty Germans, working to repay debt taken out at the height of the crisis, meanwhile feel they are forced to bankroll many of Europe's weakest economies, a source of animosity.


    Still, the Bundesbank is content to keep just half of the gold at home and has no plans to relocate even more of the reserves, Thiele said.


    Thiele added that Britain's plans to leave the EU have had no effect on the plans, since London remains a key gold-trading market and a safe place for storage.


    Moved in part via Switzerland, the relocation has so far cost 6.9 million euros, Thiele said.


    Hoping to soothe the public and ease speculation that some of the gold might not even be there, the Bundesbank released a 2,300-page list of gold bars in 2015, promising increased transparency to calm wary Germans.


    During the Cold War, 98 percent of Germany's gold was stored abroad, with the biggest chunk moved so far, some 931 tonnes, brought back from the Bank of England in 2000.


    Once the relocation is completed, the Bundesbank will keep 1,236 tonnes in New York, 432 tonnes in London and the rest in Frankfurt. The current move involves 300 tonnes from New York and 374 tonnes from Paris.

    Last edited by Toby; 09 Feb 17, at 19:03.

  2. #2
    Senior Contributor
    Join Date
    05 Sep 06
    Posts
    3,553
    For context - We had a thread on this before, in 2013; the transfer was planned back then, nothing to do with Trump, Le Pen or confidence in the Euro: http://www.worldaffairsboard.com/showthread.php?t=63588
    Thread also explains why we're pulling out of Paris in particular.

    Overview of transfers, taken from the German Federal Bank press release on it for this year:

    Name:  transfers.jpg
Views: 98
Size:  28.4 KB

    Name:  reserves.jpg
Views: 98
Size:  24.2 KB

    Hoping to soothe the public and ease speculation that some of the gold might not even be there, the Bundesbank released a 2,300-page list of gold bars in 2015, promising increased transparency to calm wary Germans.
    This part actually alludes to accusations by conservative German politicians that our gold in the US had been subsumed into US holdings (as in: that the US stole our gold to cover their debts) since no one had checked whether the transferred gold bars were actually there for decades.

    The Federal Bank for this reason in every single press release on the topic makes sure to expressly note that any repatriated gold bars (they call 'em that) are checked against a serial number list of bars originally delivered there.

  3. #3
    Contributor Toby's Avatar
    Join Date
    06 Nov 16
    Location
    Manchester
    Posts
    566
    Quote Originally Posted by kato View Post
    For context - We had a thread on this before, in 2013; the transfer was planned back then, nothing to do with Trump, Le Pen or confidence in the Euro: http://www.worldaffairsboard.com/showthread.php?t=63588
    Thread also explains why we're pulling out of Paris in particular.

    Overview of transfers, taken from the German Federal Bank press release on it for this year:

    Name:  transfers.jpg
Views: 98
Size:  28.4 KB

    Name:  reserves.jpg
Views: 98
Size:  24.2 KB


    This part actually alludes to accusations by conservative German politicians that our gold in the US had been subsumed into US holdings (as in: that the US stole our gold to cover their debts) since no one had checked whether the transferred gold bars were actually there for decades.

    The Federal Bank for this reason in every single press release on the topic makes sure to expressly note that any repatriated gold bars (they call 'em that) are checked against a serial number list of bars originally delivered there.
    Be interesting to see the dates the gold was accumulated from.....Also this is clearly ahead of schedule and clearly before the French elections.....hmmm
    Last edited by Toby; 09 Feb 17, at 20:54.

  4. #4
    Senior Contributor
    Join Date
    05 Sep 06
    Posts
    3,553
    Full holdings by year and location: https://www.bundesbank.de/Redaktion/...ublicationFile

    It was all bought between 1951 and 1968, i.e. during the Wirtschaftswunder when we imported millions of economic refugees to fuel our growing economy. Some was sold in 1968/69, mostly to the US, and from there holdings were kept level at 3700 tons.

    Slightly special case were the London holdings in the late 90s, where we bought 930 tons in 1998 (buying physical gold eliminating a non-physical "gold account" there, also swapping out our depot in Canada) - which is exactly that gold then transferred to Frankfurt two years later, after selling some 340 tons to arrive at current holdings [P.S.: 232 tons of these 340 were actually transferred to the European Central Bank, not the public market. They form the main holdings of the ECB in London].

    The Federal Bank planned in 2004 - a few years later - to sell 20% of their gold holdings since it didn't need that many fixed assets in place to buy foreign currency in emergencies; that plan was shelved mostly due to concerns about the gold price. The gold being transferred back to Frankfurt now is pretty much those exact same 20%.

    The German gold holdings aren't really that big btw, even if they are the second-largest in the world. They're only worth around 121 billion Euro, about 17% of all currency reserves of the Euro countries - and about enough to cover German government expenses for 3.5 months these days. Italy (!) has 88 billion Euro in gold reserves, and France about the same amount; the three countries together hold 76.6% of all Eurozone gold.
    Last edited by kato; 09 Feb 17, at 21:31.

  5. #5
    Contributor Toby's Avatar
    Join Date
    06 Nov 16
    Location
    Manchester
    Posts
    566
    Makes perfect sense to store gold in cities where international trade takes place. Is Germany aware of the perception that could be created by withdrawing from Paris???
    Last edited by Toby; 09 Feb 17, at 21:28.

  6. #6
    Senior Contributor
    Join Date
    05 Sep 06
    Posts
    3,553
    Can't trade for foreign currency in Paris as they use our currency.

    That's the reason for the withdrawal from there. That and that storing in Paris ain't cheap while there's spare capacity in Frankfurt merely 400 km away.

  7. #7
    Contributor Toby's Avatar
    Join Date
    06 Nov 16
    Location
    Manchester
    Posts
    566
    Really.....and it's ahead of schedule and it's before the French election...not sure whether it's calculated or dumb...we both know how it looks and how the media will play it.....oh boy

  8. #8
    Contributor Toby's Avatar
    Join Date
    06 Nov 16
    Location
    Manchester
    Posts
    566
    Quote Originally Posted by kato View Post
    Full holdings by year and location: https://www.bundesbank.de/Redaktion/...ublicationFile

    It was all bought between 1951 and 1968, i.e. during the Wirtschaftswunder when we imported millions of economic refugees to fuel our growing economy. Some was sold in 1968/69, mostly to the US, and from there holdings were kept level at 3700 tons.

    Slightly special case were the London holdings in the late 90s, where we bought 930 tons in 1998 (buying physical gold eliminating a non-physical "gold account" there, also swapping out our depot in Canada) - which is exactly that gold then transferred to Frankfurt two years later, after selling some 340 tons to arrive at current holdings [P.S.: 232 tons of these 340 were actually transferred to the European Central Bank, not the public market. They form the main holdings of the ECB in London].

    The Federal Bank planned in 2004 - a few years later - to sell 20% of their gold holdings since it didn't need that many fixed assets in place to buy foreign currency in emergencies; that plan was shelved mostly due to concerns about the gold price. The gold being transferred back to Frankfurt now is pretty much those exact same 20%.

    The German gold holdings aren't really that big btw, even if they are the second-largest in the world. They're only worth around 121 billion Euro, about 17% of all currency reserves of the Euro countries - and about enough to cover German government expenses for 3.5 months these days. Italy (!) has 88 billion Euro in gold reserves, and France about the same amount; the three countries together hold 76.6% of all Eurozone gold.
    My understanding of holding Gold reserves(post cold war) in Trading cities, is not only does it act as a guarantee, but also gold is a more stable currency and not subject to volatile fluctuations. Can anybody add to that???

  9. #9
    Senior Contributor
    Join Date
    05 Sep 06
    Posts
    3,553
    It's fluctuating like any other currency.

    Name:  800px-Gold_Spot_Price_per_Gram_from_Jan_1971_to_Jan_2012.svg.png
Views: 69
Size:  71.4 KB

    Note in particular the 1980 hyperinflation of gold.

  10. #10
    Contributor Toby's Avatar
    Join Date
    06 Nov 16
    Location
    Manchester
    Posts
    566
    Quote Originally Posted by kato View Post
    It's fluctuating like any other currency.

    Name:  800px-Gold_Spot_Price_per_Gram_from_Jan_1971_to_Jan_2012.svg.png
Views: 69
Size:  71.4 KB

    Note in particular the 1980 hyperinflation of gold.
    So its purely a guarantee and a safe commodity when paper currency goes south?

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Nazi Era Gold Hoard Found In Germany
    By TopHatter in forum The World Wars
    Replies: 2
    Last Post: 15 Jul 15,, 20:41
  2. The recession will be over sooner than you think
    By Shek in forum International Economy
    Replies: 103
    Last Post: 25 Mar 09,, 13:56
  3. Replies: 1
    Last Post: 10 Jun 05,, 18:15
  4. We Must Leave Iraq, Sooner rather than later!
    By lulldapull in forum The Middle East and North Africa
    Replies: 0
    Last Post: 18 Jan 05,, 03:46

Share this thread with friends:

Share this thread with friends:

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •