What’s the straight dope on this?
What gold? When?
The first 4 minutes of this video from 2017 Why Germany Getting Its Gold Back Is A Bigger Deal Than You Think - YouTube
and this one with Peter Schiff from today is also interesting for gold buffs
[quote=“bardos, post:4, topic:836885”]
The first 4 minutes of this video from 2017 Why Germany Getting Its Gold Back Is A Bigger Deal Than You Think - YouTube
and this one with Peter Schiff from today is also interesting for gold buffs
[/QUOTE][Moderating]
People shouldn’t be required to watch a video to answer your question. Please explain the situation and ask what you want to know.
Colibri
General Questions Moderator
From what I read on this issue, the U.S. required a longer time period to deliver the gold, than Germany requested or expected.
This led some to suspect that the gold, and other owners gold, was not sequestered as it should have been. Not completely unencumbered from other financial/legal claims on it. Which it should not have had. Some felt it had been “loaned out” temporarily on recurring basis for other financial shenanigans. Not actually moved or sold. But as some asset to enable other financial operations. Shenanigans.
It does not help that the U.S. has not had an open transparent accounting of it’s gold holdings for a long time.
Also the actions of some countries that have been holding other countries gold for “safe keeping” has triggered more repatriations of gold from those countries. London recently refused to give Venezuela it’s gold back. That’s a pretty big red flag to repatriate your gold from there.
I believe that most of the foreign gold stored in the US is in the vault at the Federal Reserve building in NYC. I’ve seen it.
I used to have a friend that worked there, and she arranged a private tour. We got to go all the way inside the vault. The gold bars are stored in security cages inside the vault and there are locks on the cages that require 2 people to open, I think 2 keys had to be inserted and turned at the same time. They had one bar out so visitors could get a good up close look. It was really heavy. They made us put on steel shoe covers before we picked it up. And not all the bars were shaped the same, I seem to remember 2 distinct “styles”- one was purely rectangular and the other had angled sides and was smaller on the top.
The guy giving the tour had a great story. One time, the Fed delivered a shipment of gold to its country of origin. All the procedures were followed, it was counted multiple times by multiple people at every step of the transfer process, who signed all the proper papers. The foreign country received their gold and claimed they were one bar short. Panic ensued. Then, following a hunch, one of the Fed employees went down to the loading dock. He found the bar sitting next to a door. Someone had grabbed it and used it to prop open the door during the loading process. An international crisis was averted.
Sorry about that.
The German “Economic Miracle” of the 50s and 60s gave Germany huge trade surpluses in dollars. The Bundesbank then used these dollars to purchase gold at the goong guaranteed rate of $35 an ounce, (until 1971 of course) and these gold purchases were stored in the New York Fed’s underground stores on Liberty Street. By 1912, when the German government asked to repatriate their gold holdings, just over 1,500 tonnes of German gold had been stored in the US. I imagine none of these US-stored bars had the nazi insignia on them as do many of the bars still floating around in other places. You can find many replicas of these bars for sale in many places.
During the second world war Germany had looted gold from central banks across Europe as well as from their concentration camp victims. However, by the end of the war, almost all of this German gold had mysteriously disappeared, the subject of many books, conspiracy theories and Hollywood dramas.
Germany started the repatriation program back in 2013, the U.S. Federal Reserve stood firm on a seven-year timeline to ship out 300 tons of the gold. Red flag sort of. Some folks speculated that the Fed didn’t really have the gold and was having to purchase it on the open market. Naturally, the price of gold would spike if the purchases went along too quickly.
Adding fuel to the fire is that the Fed has denied the German financial regulators access to the vast deposits of gold stored in the US. Thus, the Bundesbank has had no opportunity to audit the reserves that belong to Germany.
No specific question here. Just looking for information about the “questions” raised by the long term shipping… Not sure how long it took for London to ship over 900 tons back to Germany
There’s a lot of conspiracy theories about this, but I think this article from the Financial Times avoids them and is mostly about the history of the German gold in US, UK and French banks and how it was brought back to Germany.
nm
This says the transfer was complete in 2017.
Yes, they seem to have asked for 300 tons and received the final installment in 2017. Roughly 1200 tons of the original ~1500 still remain in the US although German officials evidently are not permitted to have a looksee and audit the remaining gold. Shipments look something like this: 2013: 5 tons, 2014: 85 tons, 2015: 100 tons. Can’t find any exact figures for the following two years, but suffice it to say that by 2017 all 300 tons had been shipped back.
But here’s the thing that has invited speculations and theories. According to some sources, the gold bars that were “repatriated” to Germany have different labels to what were originally seen as German gold in the US. The idea is that the U.S. might have replaced the German bars with different ones bought on the market.
Still gold is gold. However it seems to casts doubt on actual US gold holdings. There has been no official audit of the gold in Fort Knox since 1953, although at the moment official figures put the gold at $200 billion worth, give or take a dollar or so. In 2017, when Treasury Secretary Mnuchin made a surprise visit to the facility, being first Treasury Secretary to visit Ft. Knox since John Wesley Snyder in 1948, he commented that he assumed the gold was still there and joked about what a movie it would make “if [they] walked in and there was no gold”.
Cites?
The article from the Financial Times I linked to said the German gold went to Switzerland first where it was re-smelted into the standard trapezoidal bricks. (American bricks are, according to the article, rectangular, presumably so you can build a wall out of them.) So I can well understand that the labels would be different. (Another reason being that the Germans presumably had a different inventory system.)
Like you said, Gold is Gold, it’s a fungible commodity. If you store 10000 oz with the Treasury, you get back 10000 oz, but not one cares or thinks you are gonna get the exact same bars that you send in.
I mean, if you go to the bank and deposit $10000 in cash, then withdraw it a decade later, do you expect to get the exact same bills?
Yes, that. The US’s posture all along was that the gold was in an older form and thus not up to modern standards, meaning it did indeed need to be melted down and recast, and thus its original hallmark was lost. Plus the fact that it was returned in dribbling amounts had people speculating.
True, but that is not the point of the speculation, The speculation revolves around whether the Fed had the gold ingots on hand or were forced to turn to the market… the amount of a country’s gold stores, its buying and selling, are really important financial figures and is ofttimes highly classified information.
Judging by the Wikipedia article, the gold had never left the USA since it was bought in the 50’s and 60’s. How would Germany know if it was the “same gold”?
It depends on what the terms of the agreement were. Sure, if I deposit ten thousand dollars in a savings account at a bank and with draw it ten years later, I shouldn’t expect to get the same bills back. But if I deposit ten thousand dollars in a safety deposit box at the same bank and then take them out ten years later, I expect them to be the exact same bills I put into the box.
To carry the analogy one step further, let’s say you gave the bank a bunch of currency and bullion to store in a safety deposit box
The bank does not allow you to see the items in the box.
The box does not allow you to see the audit they do to insure your items are in the box.
You ask for you items and they say it will take a years as you will only get a few items per month due to nebulous “logistics”.
Wouldn’t you get suspicious that your items were no longer in the box? If you knew of the situation happening to someone else and had items at the bank would YOU get suspicious that your items were no longer in the box?
A couple of posts here have suggested that the Germans were prevented from seeing or inspecting the German gold being stored at the New York Fed. Frankly, that sounds like bullshit. I assume that any of the governments or other groups that have gold stored there are allowed to inspect or inventory it as necessary. (Heck, upthread Ann Hedonia says she saw it and she’s nobody.)
And the Financial Times article I linked to addresses this issue. “The Bundesbank denies that Mr Boehringer’s campaign spurred its decision to bring the gold home. It also denies accusations by gold bugs (those bullish on gold as a commodity) that the German gold has disappeared from the New York Fed’s vaults. Mr [Carl-Ludwig] Thiele [member of the Executive Board of the Bundesbank] says he has seen it twice, in 2012 and 2014. ‘It is there. And it was never a problem to see it or have it transported to Germany.’”