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?

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Al Gorerhythm's picture

 I guess you were refering to Fort Knox. That fort should be re-named. Fort Nix is more appropriate.

Al Gorerhythm's picture


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

There are approximately $1.16 Trillion Fed notes in circulation with the same letters on them; invisible but indellibly marked just the same.


Buck Johnson's picture

The same IOU that the Social Security accounts have also.

A Nanny Moose's picture

Once we have jumped the shark Keynes/Nixon style, what is left?

Silver Bug's picture

Let the show begin! Good luck trying to get it all back Germany! Price of gold is going much much higher.

GetZeeGold's picture



New York.......we have a problem.

CH1's picture

Plugs being pulled, Bitchez!

GetZeeGold's picture



Gonna be a late night at the BIS. Better order in some pizza.

SDRII's picture

Good compendium articles about China redeploying its reserves into offshore companies as Bloomberg reminds everyone that the now C/A deficit Japan will be the Treasury buying savior...Next article will be how the demand for the forthcoming floaters is epic


China reserves



Half_A_Billion_Hollow_Points's picture

china please dump the fuckin usd!

willwork4food's picture

Funny. If they did that you couldn't afford that hot icon unless you gave up your rent & food money.

On the other hand , there would be plenty HERE...

Al Gorerhythm's picture

Double anchovies 'r gonna cost ya.

balolalo's picture

Makes you reallly want to hold on to your puny silver rounds.  Don't forget, 2000 years ago you could end the life of a God for only thirty of 'em.  Now that's some real purchasing power. 

Imagine what could be done with 3,396 tons of gold...   

Shit is hitting the fan.  

SamAdams's picture

That's a lot of metal to print!!!!

Yes, if this really happens, then yes... this is a big SHTF deal.  Germany (on paper) is 2nd largest holder of physical (albeit in foreign banks).  This could be the start of a run.

jeff montanye's picture

unlike the comex, this will be harder to settle in currency.

moonstears's picture

Hey I did the math once on those 30 pieces of silver, most likely Ag composition...13.50 OZT IN TOTAL!

SilverRhino's picture

Actually it's a lot less than 30 silver rounds .... see the math on Judas and Jesus.   

  • 30 silver shekels (Judas' 30 pieces of silver) were equal to 120 silver denarii (also 120 silver drachma) [Mat17:24].
  • 120 silver denarii (4.5gr silver late Roman Republic) was roughly equal to 120 days pay for a legionnaire [Matt20:9-10]
  • 1 silver denarii was roughly $21 in 2005 dollars for bread purchasing.  (about 20 loaves)
  • Based on weights and purchasing power silver was approximately 146 dollars per troy ounce using the same 2005 dollars as a metric.
  • So Jesus was betrayed for less than 3 grand ($2520).   Judas worked cheap.

mt paul's picture

is that

before or after taxes...

MisterMousePotato's picture

Someone should be commended for thinking this through; however, $21.00 for 20 loaves of bread? $1.05 per loaf?

Was three or four bucks the last I noticed.

Was bread really a dollar a loaf just eight years ago?

willwork4food's picture

I was making triple what I am now, and spending half on things like pizza, cigs, gas...

That was only 18 years ago.

PhilofOz's picture

The two biggest supermarket chains in Oz sell loaves of homebrand sliced for $1.00. Casual wages for cleaners here range from $20 an hour to $26.40 an hour for one Filipina friend. Life is good for the lower middle/working class here at the moment. 

moonstears's picture

Rhino from wiki, and my point earlier "The Tyrian shekel weighed four Athenian drachma or about 14 grams"

13.50 ozt silver? 31.25x13.50=$422 today silver has devalued by 80+% using your points.

AGuy's picture

"Imagine what could be done with 3,396 tons of gold... "


I see a tragic ending to the ship that transport all that gold tungsten across the Atlantic... I hear the Federal Reserve is looking for a group of sailors for the sucide mission. Any Volunteers?


nmewn's picture

I'm good at underwater recovery...but my labors not cheap ;-)

Acidtest Dummy's picture

I is not free -- I is expensive! -Firesign Theater

balolalo's picture

I don't see them having trouble manning it. Have you ever read about the Bismarck?

Ze Germans are not afraid of some blood.

Bawneee Fwank's picture

War with Germany?...Germans = Al Qeeeuuudahhh

WonderDawg's picture

Does that mean we're going to supply them with weapons, too?

sun tzu's picture

We will supply the German "rebels" with weapons so they can overthrow the tyrannical Angela Merkel regime. 

tenpanhandle's picture

I can see it now:  The warming oceans cause an old WW11 mine to float to the surface over the deepest trough in the Atlantic.  How ironic, the news story will read, that a ship of the German Navy was lost due to an old Nazi anti-ship mine.  Furthermore, the US had included all its own gold for safekeeping at Ramstein. What an unfortunate end to all that barbarous relic.

UnpatrioticHoarder's picture

Ironically the Bundesbank may not recognise any downside in their decision, they don't think it is a prisoners' dilemma. When the whole house of fiats has fallen it will be clear in retrospect.

Cursive's picture


Yeah, but the first one to sell is generally the last man standing.

PhD's picture

Yeah, they are probably clueless.

Being able to print trillions of dollars without causing inflation takes no skill, none. Easy as shit.

Yupp, its all just one HUGE fucking coincidence.

Yupp Yupp, no worries!

Nothing sinnister going on here. Juuuuuust cluelessness.

They’ve probably never even heard of the prisoners dilemma! HAH, what a bunch of clueless fucks! This will teach them fuckers!

Uchtdorf's picture

Just wondering out loud here, but aren't the words Bundesbank and Rothschild both Germanic in origin?

Cathartes Aura's picture

funny you should ask,

The Rothschild family (pron.: /?r??s.t?a?ld/, German:[??o?t.??lt], French: [??t.?ild], Italian: [?r?t?ild]), or more simply as the Rothschilds, is a family of German Ashkenazi Jewish origin that established a European banking dynasty starting in the late 18th century that even came to surpass leading contemporary banking families such as Baring and Berenberg. The family originates in Frankfurt. Five lines of the Austrian branch of the family have been elevated to Austrian nobility, being given hereditary titles of Barons of the Habsburg Empire by Emperor Francis II in 1816. Another line, of the British branch of the family, was elevated to British nobility at the request of Queen Victoria, being given a hereditary title of Baron.[1][2]

City of London,   *nods*

F. Bastiat's picture

Makes a lot of sense.

Certainly, there is no reason to have any faith in the nonsense that emanates from the despot's regime on a daily basis.

kliguy38's picture

There's more where dis came from..........TRUST US

cynicalskeptic's picture

There was still some Libyan gold left over after sending Chavez back 'his' gold.....

I wouldn't want to be last in line asking for 'my' gold back.....  sooner or later tehy ARE going to run out of gold to steal and then.... tough luck as the charade collapses...

SamuelMaverick's picture

No problem Germany, here is a huge wad of green pieces of fiat, we reserve the right to settle in paper.  Go out and buy your own gold somewhere else.   LMAO

Rogue Trooper's picture

Who wouda thought. Zee Germans.... Bloody Terrist!  I for one, welcome the imminent declaration that they are now part of the new AXIS of EVILTM.  How else can one explain their untrusting and declaration of financial WAR on the reserve currency of the FREE world.

I assume the 1st Armoured Division will be rolling back into Frankfurt this time.

/Sarc tag.... for those without a (sense) of humour.

OldPhart's picture

3,396.0 German Tons of Gold


45.0% Stored at the New York Fed


1,528.2 Tons at NY Fed


305,640.0 Pounds at NY Fed


4,890,240.0 Ounces at NY Fed


489,024,000.0 ETF Equivalent Ounces


$1,671.0 Spot Price of Gold/Ounce


$817,159,104,000.0 ETF Equivalent to 'disappear'
Ignatius's picture

How the Germans gonna react when Corzine tells 'em "it just vaporized"?