The Very Strange Case of German Gold

by Kevin D. Freeman on January 16, 2014

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About a year ago it was announced that the Germans wanted their gold back. It has been on deposit in New York for decades. Here are excerpts from the report in Forbes a year ago:

1/16/2013 @ 1:05PM |23,520 views

Germany’s central bank announced Wednesday it will repatriate gold reserves held at the New York Fed and the Banque de France in order to have “the ability to exchange gold for foreign currency […] within a short space of time.”  Officials at the Bundesbank indicated they have no intention of selling gold, but acknowledged the move is “preemptive” in case a “currency crisis” hits the European Monetary Union.  While they tried to minimize the importance of the move at the Bundesbank, repatriating gold is a clear indication of public loss of confidence on foreign central banks and the integrity of the monetary union.  Over the past few years, Venezuela, Libya, and Iran have also repatriated their gold holdings . . .  TO CONTINUE READING AT FORBES . . .

Now, the first curious thing was how long the Federal Reserve said it would take for Germany to get even a portion of its gold returned. The timeline was for the 700 metric tons to be returned over seven years which seemed like a pretty long time to many. And yet, by year end the amount repatriated was tiny in comparison to the target:

A Year Later, The Bundesbank Has Repatriated Only 37 Tons Of Gold (Of 700 Total)

Submitted by Tyler Durden on 12/24/2013 12:09 -0500 at ZERO HEDGE

Procuring physical gold seems to be a rather problematic and time-consuming process, as the Bundesbank is learning.

Recall that it was almost exactly one year ago in mid-January, when the German central bank, in a shocking development expressing the bank’s lack of trust in its central banking peers, announced that it would proceed with the repatriation of 700 tons of gold held by its “partners” the New York Fed and the Banque de France, by the end of 2020 . . .

Yesterday Buba head Jens Weidmann told Bild that gold valued at €1.1 billion has been repatriated so far. Putting a weight to this number: to date the Bundesbank has received shipments of a paltry 37 tons of gold from its existing storage place in either New York or Paris to Germany: “The gold reserves of the country will be stored in Frankfurt because it has a special storage with the corresponding equipment,” said Carl-Ludwig Thiele, a Bundesbank board member.

The repatriated amount over the course of all of 2013 represents just over 5% of the total stated target of 700 tons, and is well below the 87.5 tons that the Bundesbank would need to repatriate each year if it were to collected the 700 tons ratably every year in the 8 year interval between 2013 and 2020.

That was the first item of curiosity that raised some serious speculation. Why would it take so long to move that much gold?

Just recently, another curious revelation sparked further speculation. It seems that the gold returned was not identical to the gold originally deposited. It seems that the very nice bars that were marked and deposited were returned after having been melted down. The question is WHY? Here is an example of commentary:

 Did the Bundesbank get even a little of its original gold back?

By: Chris Powell, Secretary/Treasurer, GATA

Posted Sunday, 5 January 2014 | Share this article | Disqus 

Correspondence between the German financial journalist Lars Schall and Germany’s Bundesbank suggests that the small amount of gold the Bundesbank claims recently to have repatriated from the Federal Reserve Bank of New York was not returned in the form in which it was deposited many years ago — that, indeed, the original German gold was not and is not available to be returned because something undisclosed was done with it.

Schall’s correspondence with the Bundesbank is appended along with a statement by Peter Boehringer of the German Precious Metal Society and a leader of the movement in Germany seeking repatriation of the country’s gold supposedly vaulted abroad, who raises questions the Bundesbank has yet to answer.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

December 26, 2013

Dear Ladies and Gentlemen:

I am an independent financial journalist.

In connection with the transfer of 37 tons of Bundesbank gold from New York to Germany, I came across the news that the bars were a melted before the transfer. May I kindly ask you for the following information:

Why were the bars melted at all? And why couldn’t that wait until the bars arrived in Frankfurt?

Kind regards,

Lars Schall

* * *

January 3, 2014

Dear Mr Schall:

Thank you for your enquiry.

At a press conference on the topic of Germany’s gold reserves on 16 January 2013, Executive Board member Carl-Ludwig Thiele presented the Deutsche Bundesbank’s new storage concept. In addition to the relocation of gold bars, this concept includes, amongst other things, measures to ensure that the specifications of the London Good Delivery (LGD) standard are met. You can find these specifications on Page 17 of the following presentation:

http://www.bundesbank.de/Redaktion/DE/Downloads/Presse/Publikationen/201…

Storage plan (new)
………………… 2012 ……….. 2020
Frankfurt ……. 31% ………… 50%
New York ……. 45% ………… 37%
London ………. 13% ………… 13%
Paris ………….. 11% ………….. 0%

Planned relocations:

— Phased relocation of 300 tonnes of gold from New York to Frankfurt.

— Phased relocation of 374 tonnes of gold from Paris to Frankfurt.

— Achieve LGD standard, where this is not already the case.

You can find the specifications for the London Good Delivery (LGD) standard at the following address:

http://www.lbma.org.uk/pages/index.cfm?page_id=27.

In cases where these specifications were not already met, the Bundesbank had these original gold bars melted down and recast in order to meet this standard. This was achieved without any difficulties.

Please understand that in order to ensure the security of the gold transports and our employees, the Bundesbank is unable to provide you with any further information.

Yours sincerely,

DEUTSCHE BUNDESBANK
Communication
Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main

Tel.: +49 69 9566×3511 or 3512

* * *

Statement by Peter Boehringer, president of German Precious Metal Society and co-initiator of the Repatriate our Gold campaign —

http://www.gold-action.de/campaign.html

— on the Bundesbank’s response.

Why does the Bundesbank continue to avoid transparency regarding Germany’s gold holdings?

Why not just come up with easy-to-deliver facts instead of repeated rhetoric about an alleged remelting of gold bars in the United States that even people with some knowledge of the gold industry and some common sense fail to understand?

There is no reason why the original gold bars acquired in the 1950s and 1960s (if they ever existed at all, which has never been proven, as by publication of bar lists or photos) had to be melted down and recast into LGD-compliant bars in New York as opposed to Frankfurt. Nor is there reason why all this had to be done in obscurity without any published report of the recasting.

The public is still waiting for answers to crucial questions like these:

— What kind of gold bars were melted? Original material from the 1950s and ’60s?

— How can the Bundesbank hint in its press release that some of the old bars already met the LGD specifications when those specifications were not defined and made a standard for central bank bars until 1979?

— Why has the Bundesbank not published a bar number list of the old bars? How can there be security concerns about bars that no longer exist? Why has the Bundesbank not published a bar number list of the newly cast bars?

— Who exactly melted the bars? Where exactly was this melting performed? Is there a smelter at the Federal Reserve Bank of New York?

— Who witnessed the melting and recasting of the bars?

— Are there any reports on this in writing with a valid signature? By whom?

— And especially: Why was it deemed necessary to perform this action in the United States as opposed to Frankfurt or nearby Hanau, where there are some of the best facilities in the world for metal probing, melting, and recasting? Had these actions been performed in Germany in a fully transparent manner, it would have been so easy for the Bundesbank to dismiss all questions from “paranoid gold conspiracy theorists.”

The Bundesbank is just the custodian of Germany’s national gold, which is worth more than $125 billion. The Bundesbank owes the public full transparency in all these gold matters. That is, physical audits, independently verified storage reports, and a publication of the full bar lists of all its gold in all national or international vaults.

Despite having now had the excellent opportunity of this partial repatriation, the Bundesbank has again failed to produce any proof or indication that at least 37 tonnes (out of 1,500 tonnes of German gold at the New York Fed) still existed through 2013 in their original 1950s-’60s bar form. Instead, Germany is now owner of almost 3,000 LGD-compliant standard bars, which proves nothing and dismisses no allegations of decade-long manipulation of the gold price.

It is still possible and even probable that the old German bars were lent into the market long ago or that they have multiple owners or are backing multiple gold exchange-traded fund derivatives. Of course the same holds for our remaining 120,000 bars at the New York Fed.

The “repatriation” of a mere 1.5 percent of Germany’s foreign gold holdings and the supposed melting and recasting of the original gold bars do not prove the continued existence of Germany’s remaining gold holdings supposedly vaulted at the New York Fed.

The Bundesbank has missed a great opportunity to bring transparency to Germany’s gold reserves. What a pity. And at its current speed the Bundesbank will require 60 years to accomplish the repatriation mission forced upon it by an impatient public. What a shame.

Here is a Glenn Beck commentary. Glenn mentioned this to me when I was on his set last week. Quite the story.

Consider all of this in the context of what we have been sharing. We are in a Global Economic War and understanding this story is very important to understanding what is happening at the highest levels of global finance.

The implications of this are covered in my new book, Game Plan: How to Protect Yourself from the Coming Cyber-Economic Attack. You can learn more about the book; see the reviews; and check out articles and interviews at SECRETWEAPON.ORG.

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