It Begins: Bundesbank To Commence Repatriating Gold From New York Fed

Tyler Durden's picture

In what could be a watershed moment for the price, provenance, and future of physical gold, not to mention the "stability" of the entire monetary regime based on rock solid, undisputed "faith and credit" in paper money, German Handelsblatt reports in an exclusive that the long suffering German gold, all official 3,396 tons of it, is about to be moved. Specifically, it is about to be partially moved out of the New York Fed, where the majority, or 45% of it is currently stored, as well as the entirety of the 11% of German gold held with the Banque de France, and repatriated back home to Buba in Frankfurt, where just 31% of it is held as of this moment. And while it is one thing for a "crazy, lunatic" dictator such as Hugo Chavez to pull his gold out of the Bank of England, it is something entirely different, and far less dismissible, when the bank with the second most official gold reserves in the world proceeds to formally pull some of its gold from the bank with the most. In brief: this is a momentous development, one which may signify that the regime of mutual assured and very much telegraphed - because if the central banks don't have faith in one another, why should anyone else? - trust in central banks by other central banks is ending.

Much more importantly, it is being telegraphed as such, with Buba fully aware of just what the consequences of this (first partial, and then full; and certainly full vis-a-vis the nouveau socialist regime of Francois Hollande which will soon hold zero German gold) repatriation will be in a global monetary arena, which is already scraping by on the last traces of faith in a monetary system that is slowly but surely dying but first diluting itself to oblivion. And in simple game theory terms, the first party to defect from the prisoner's dilemma of all the bulk of global gold being held by the Fed, defects best. Then the second. Then the third. Until, in this particular case, the last central bank to pull its gold from the NY Fed and the other 2 primary depositories of developed world gold, London and Paris, just happens to discover their gold was never there to begin with, and instead served as collateral to paper gold subsequently rehypothecated several hundred times, and whose ultimate ownership deed is long gone.

It would be very ironic, if the Bundesbank, which many had assumed had bent over backwards to accommodate Mario Draghi's Goldmanesque demands to allow implicit monetization of peripheral nations' debts has just "returned the favor" by launching the greatest physical gold scramble of all time.

From Handelsblatt:

Die Bundesbank hat ein neues Konzept ausgearbeitet, wo sie künftig ihre Goldreserven lagern will. Nach Informationen des Handelsblatts (Dienstausgabe) sieht dieses Konzept, das am kommenden Mittwoch bekanntgegeben werden soll, vor, den heimischen Standort aufzuwerten, in New York dafür weniger Gold zu lagern und überhaupt kein Gold mehr in Paris zu horten.


Derzeit lagert das Gold der Bundesbank ihren Angaben zufolge in New York, London, Paris und Frankfurt. In der amerikanischen Notenbank Fed lagern 45 Prozent der insgesamt 3.396 Tonnen Gold, in der Bank of England in London 13 Prozent, in der Banque de France in Paris elf Prozent und im Hauptsitz in Frankfurt 31 Prozent. Diese Verteilung soll sich nun ändern.

We present it in the original for fear of losing something in translation, but in broad English terms the above reads as follows:

The German Bundesbank is developing a new approach as to where its gold will be stored. According to exclusive information, to be fully announced on Wednesday, the bank will in the future hold less gold in the New York Fed, and no more hold in Paris (Banque de France). As a result, the distribution of German gold, of which 45% is held in New York, 13% in London, 11% in Paris and 31% in Frankfurt, is about to change.

There is no need to explain why this is huge news (for those who have not followed our series on the concerns and issue plaguing German gold can catch up here, here, here, here, and certainly here) . At least no need for us to explain. Instead we will let the Bundesbank do the explanation. The following section is the answer provided by the Bundesbank itself in late October in response to the question why it does not move the gold back to Germany:

The reasons for storing gold reserves with foreign partner central banks are historical since, at the time, gold at these trading centres was transferred to the Bundesbank. To be more specific: in October 1951 the Bank deutscher Länder, the Bundesbank’s predecessor, purchased its first gold for DM 2.5 million; that was 529 kilograms at the time. By 1956, the gold reserves had risen to DM 6.2 billion, or 1,328 tonnes; upon its foundation in 1957, the Bundesbank took over these reserves. No further gold was added until the 1970s. During that entire period, we had nothing but the best of experiences with our partners in New York, London and Paris. There was never any doubt about the security of Germany’s gold. In future, we wish to continue to keep gold at international gold trading centres so that, when push comes to shove, we can have it available as a reserve asset as soon as possible. Gold stored in your home safe is not immediately available as collateral in case you need foreign currency. Take, for instance, the key role that the US dollar plays as a reserve currency in the global financial system. The gold held with the New York Fed can, in a crisis, be pledged with the Federal Reserve Bank as collateral against US dollar-denominated liquidity. Similar pound sterling liquidity could be obtained by pledging the gold that is held with the Bank of England.

And in case the above was not clear enough, below is the speech Buba's Andreas Dobret delivered to none other than NY Fed's Bill Dudley in early November:

Please let me also comment on the bizarre public discussion we are currently facing in Germany on the safety of our gold deposits outside Germany – a discussion which is driven by irrational fears.


In this context, I wish to warn against voluntarily adding fuel to the general sense of uncertainty among the German public in times like these by conducting a “phantom debate” on the safety of our gold reserves.


The arguments raised are not really convincing. And I am glad that this is common sense for most Germans. Following the statement by the President of the Federal Court of Auditors in Germany, the discussion is now likely to come to an end – and it should do so before it causes harm to the excellent relationship between the Bundesbank and the US Fed.


Throughout these sixty years, we have never encountered the slightest problem, let alone had any doubts concerning the credibility of the Fed [ZH may, and likely will, soon provide a few historical facts which will cast some serious doubts on this claim. Very serious doubts]. And for this, Bill, I would like to thank you personally. I am also grateful for your uncomplicated cooperation in so many matters. The Bundesbank will remain the Fed’s trusted partner in future, and we will continue to take advantage of the Fed’s services by storing some of our currency reserves as gold in New York.

Incidentally, what Zero Hedge did provide after this article, was factual evidence that the Buba's very much "trusted partner" had been skimming it on physical gold deliveries on at least one occasion, in "Exclusive: Bank Of England To The Fed: "No Indication Should, Of Course, Be Given To The Bundesbank..."

So we wonder: what changed in the three months between November and now, that has caused such a dramatic about face at the Bundesbank, and that in light of all of the above, will make is explicitly very unambigous that the act of gold repatriation, assuming of course that Handelsblatt did not mischaracterize what is happening and misreport the facts, means the "excellent relationship" between the Fed and Buba, not to mention Banque de France which will shortly hold precisely zero German gold, has just collapsed.

Also, if the Bundesbank is first, who is next?

Finally, once the scramble to satisfy physical gold deliverable claims manifests itself in the market, we can't help but wonder what will happen to the price of gold: both paper and physical?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Bohm Squad's picture

Guess they saw Bernanke's Tweetfest


THX 1178's picture

All your gold are belong to us.

Snakeeyes's picture

Hope they don't try to get gold from Ft Knox! Virtually nothing is left!

GetZeeGold's picture



There's a single piece of paper in Fort Know......I has three letters on it......IOU.

Careless Whisper's picture

Stellen Sie die Lüge groß, machen es einfach, immer wieder sagen, und irgendwann werden sie es nicht glauben.


GetZeeGold's picture



Not sure what that means.....but I hope you know a good boat salvager.

Zer0head's picture

It begins

read this shit


Is Shyne the only rapper who sees through Obama's false front? Maybe he's said what others think but are too scared to say.


you arent impoverished inner city kid! You grew up in Hawaii! You only play the ghetto card come election time!


How is it possible that is a better LEADER than our President?! Sad, but true.


I appreciate seeing what tweeted the president, that's a real n(word) who care about others well being


dont give a fucc bout us in da projects. Shyt aint gonna change....


hit your homeboy & come up with a solution to the horrors in Chicago & every othe inner-city


If doesn't do something about the genocide in Chicago fast I'm gonna have an melt down &say Barack Don't care about?

BigInJapan's picture

Is't Shyne a no good, drug dealing, convicted of three counts of attempted murder, illegitimate (surprise, surprise) son of the Prime Minister of Belize?

On February 16, 2010, Shyne signed a seven figure deal with Def Jam Records.

In October 2012 Shyne endorsed Mitt Romney for president of the United States, faulting President Obama for not doing anything to prevent the rapper's deportation back to Belize.


Rapping about the "Niggaz in da projects"... What a fucking joke.

AlaricBalth's picture

I hope, for the sake of the good people of Germany, that the ship or plane carrying their gold doesn't end up at the bottom of the Atlantic Ocean in a tragic accident while in transport. . It happened to me and it was such a sad day, I still get all choked up thinking about it.

Zer0head's picture

BiginJapan says


Is't Shyne a no good, drug dealing, convicted of three counts of attempted murder, illegitimate (surprise, surprise) son of the Prime Minister of Belize?


no, I think you have him confused with a money laundering banker and fast and furious participant

strannick's picture

Looks like India's gonna have a stranglehold on the worlds new reserve currency. Oh sweet irony....

knukles's picture

Repatriation to be Executive Ordered Moot, Booty Exchanged for Platinum Coin


(we still have troops in your country, Herr Doctor Doctor)

strannick's picture
Nope. You both will trade it.
TruthInSunshine's picture

And cnBSc & Bloomturd, not to mention the other Proxy "News" Networks & cable stations, spreading the talking points and pushing the false but oh-so-entrenched left-right paradigm (so as to allow conquer and divide-- mainly over ancillary & cultural wedge issues rather than core ones affecting peoples' everyday lives-- to continue), wonder why their viewers/readers/listeners continue to shrink in number at the speed of light?

They'd never report on something like this in any great or accurate detail because it doesn't comport with the official agenda.

FEDbuster's picture

Time for FOX News to step up to the plate.

"Secrets of the Federal Reserve Vaults" with your host Geraldo Rivera.  Geraldo will lead a team of foreign central banksters and specially trained assayers to try and find, audit and assay the World's gold reserves.  This two night special will start in NYC and end at Ft. Knox, KY.  Special FED representative, David Copperfield, will host Geraldo and his team as they try to find the gold.....

Manthong's picture

Not a hare on their assenpheffer if they don’t melt it down and recast it with new markings.  

What is the melting point of W, anyway?

A L I E N's picture

If you don't hold it, you don't own it..

strannick's picture

Gold, the safety of saving, and the returns of speculating, all at the same time. 

Why fight the Fed and grumble about Obamas bumbling. Get a seat on goldtrain, and shrug your shoulders at the latest academic imbecility or government malfeasance, as you cruise contently down easy street.

Harlequin001's picture

I've got a trillion dollar coin for sale if any one want one.

Very rare, made from thickasfuckinium...

one of a kind, guaranteed.

zhandax's picture

Dare I say it?  Could 'Full Faith and Credit' be the new barbarous relic?

Harlequin001's picture

and now would you believe, I've just found a 10 trillion dollar coin, this time made from a rare wood!


I could pay off the national debt.

Or, alternatively, I could use it as collateral for a Treasury Bill or three and use those as collateral to raise funding to buy up houses in Manhatten. In fact anywhere.

Lucky that I found it, you could all now end up owing me money when I buy up your mortgages, defaulted or not.

So how do you all feel about owing me interest on my 'money' for the next 25 years or so? Time to get back to work eh?

Cos when you think about it my magic wooden coin is no different than China's sovereign wealth funds is it?

Marvellous this magic money stuff, and this particular stuff really does grow on trees.


SWRichmond's picture

This truly is the moment we've been waiting for: the moment the banksters turn on each other.

And in simple game theory terms, the first party to defect from the prisoner's dilemma of all the bulk of global gold being held by the Fed, defects best. Then the second. Then the third.

Thus, the illustration of that which has always been the first rule: if you're going to panic, panic first.

bernorange's picture

Raise a glass to Mr. Lars Schall.  His tireless efforts brought the issue into the light.

Badabing's picture

For the holidays the family and I went upstate to Lake Placid, we arrived on Wednesday the 26th by 4:00pm it started to snow and didn’t stop for 3 days, when it was done we had 2 feet of snow, it was a winter wonderland. That much snow kind of puts a damper on skiing, snow boarding, ice skating and sleigh riding because the snow was very heavy dew to the temperature. It would have been nice to have powder but we can’t have everything. I did the next best thing, looking for antiques. I found an Edison standard phonograph from 1897, after haggling, I walked out of the store with the phonograph for $200.It took me a week to find a few parts I had at home and get it working , it was nice to see after 115 years it still worked. This particular talking machine originally sold for $20 dollars, at the time that was one Oz of gold. Only rich families could afford one. After getting the phonograph appraised at my local antique shop I was told that it was worth between $1600 and $1800, after all these years it’s still worth an Oz of gold.

1900 $20 =  $1680 2013

Fucking banks!  

francis_sawyer's picture

Translation is that you're getting the "buy of a lifetime" in 'STUFF'...

Forget about gold & silver [unless you have an enormous amount of wealth to transfer over]...


On the cheap [in 'dollars' ~ cough cough, I'm trying hard here] you can get:

- salt

- sugar

- lumber [to build chicken coops, planter boxes, & lots of things]

- basic tools & hardware [remember: two is one & one is none]

- PVC pipe [for irrigation]

- tobacco seeds

- sheet copper [to build 'stills']... &, um 'silver solder'

- seeds of all kinds

- free containers everywhere [if you don't throw them away] ~ plastic bottles, glass jars, jerry cans, etc.

- cold weather rated sleeping bags [as well as cheap socks, underwear, bed linens, etc.]


Open up a general store after TSHTF [start your own bank & economy]...

Note: I'd put ammo into the above scenario, but it's not all that cheap anymore...

unrulian's picture

Cheap is is cheap compared to what it will be

Crime of the Century's picture

if you're going to panic, panic first

Actually, I have to agree with Jeremy Irons as "Tuld" (hah) in Margin Call. If you are first - it's not panicking.



SAT 800's picture

Nein. there is no faith. no credit. it's real. different ball game.

unrulian's picture package is made from the same stuff

TraitorsHang's picture

A gnat's-ass shy of 6000 F. No bullshit: the surface of the sun might not melt the stuff. It has the highest melting point of any metal.
[Edit] My mistake. It's 6192 F. I was thinking of another metal.
{edit again] The photosphere is hotter than 3500K. I've been computering after too many drinks. My third sentence was the only accurate statement. :-)

zhandax's picture

If the ancient Greeks and Romans could melt the stuff, I would think a few cocktails would simply add to the entertainment value.  Do try to avoid any Darwin awards, though.

French Frog's picture

A clear case of "he who repatriates first, repatriates best" !

bank guy in Brussels's picture

Could be fake 'German gold', a new clever plan to calm the paper gold market.

Possibly Germany agreed to accept fake or tungsten gold bars as 'repatriated'.

Some Germans have claimed after World War II, German gov't signed 150-year agreement with US to always be the US poodle.


IrritableBowels's picture

My favorite part was when you said "no bullshit".

fuu's picture

Menschen, die Stapel gehen zu stapeln.

TruthInSunshine's picture

In other news that the main & quite lame stream media rarely puts on the front page, the death of the American (and German, French, British, Japanese, Italian, Spanish....) middle class goes on, unabated, with a vicious increase in velocity, bitchez. Welcome to the head-on rush into genuine debt serfdom sponsored by The House of The Red Shield putting their deeply captured "elected" puppets, regulators and central bankers to work.

Life in the Red

Millions of Americans have been keeping the lights on with borrowed money, and recent research suggests that debt can often reinforce reckless financial behavior.

"The average debt levels for lower & middle income households grew by 50 to 90 percent between 2001 and 2010 [I wonder how much worse it's grown since 2010?]."

Lore's picture

Fascinating article from New York Times.  Now excuse me for asking -- and I'm afraid of the answers -- but:

1.  Why so many single mothers?

2.  Why no mention of child support?

3.  Where ARE the fathers?

I find it hard to believe that

a)  So many women could choose so badly, and /or

b)  So many men could be without honor and / or prospects.

Somebody please enlighten me...?

CH1's picture

What is rewarded, you get more of.

trav777's picture

1) reproductive strategy

and 2) the gov is the daddy now

gaoptimize's picture

It is the lower half of women doing this and they are not choosing.  The top 2% of women are extremely difficult to convince to be a mate, although I will continue to try.

SAT 800's picture

My translation of the bolded phrase would be; "These workings, (arrangements), will not endure.(continue)." Very German. Very definete. Discussion not required.

Captain Kink's picture

"These ratios (parsings?) will soon change."

Or, more literally, "This division should soon change itself."

El Oregonian's picture

Nope. It'll get confiscated.... Unless it's lost in a very unfortunate boating accident...