Bill Gross Gets It

Tyler Durden's picture

Last night, when breaking the Buba repatriation story, we summarized it simply as follows "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." We are happy that the implicit message is so clear that everyone now gets it, including Bill Gross:

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fonzannoon's picture

I am sure BG gets it and appopriately bought some 5yr treasuries as a hedge.

redpill's picture

Trust, but verify.  AKA, no.  lol.


francis_sawyer's picture

 "Hans...bubby! I'm ya white knight."

Pinto Currency's picture


Next SLV and GLD shareholders will sell and take delivery of physical - unless you absolutely trust JPM and HSBC.

Goodbye leveraged paper exchanges like LBMA and COMEX.

quintago's picture

German financial crisis engineering

EnslavethechildrenforBen's picture

When there is nothing left for the rich to steal from the poor...

bigkahuna's picture

They will take delivery in GLD.

Greyhat's picture

The Bundesrechnungshof would hang them higher!:)

In Germany even the Bundesbank has to do a regular yearly inventory check.

Nearly impossible if the physical gold is stored outside their own vaults.

centerline's picture

God bless the day we can really figure out who is listening to who and how they are playing thier book. I suspect the Tyler's know better than most though.

BTFDemocracy's picture

Didn't Bernanke say he say he reads blogs during his Tweetfest?
Chances are Bernanke reads ZeroHedge too.

Your "F-U Bernanke" posts are probably well directed here.

andrewp111's picture

Whatever else you may think of him, be assured that Bernanke is NOT a fool. You damm right he at least skims Zerohedge.

e_goldstein's picture

In that case:


jeff montanye's picture

i'm wondering how the netherlands, with about 500 tons of gold in foreign hands, is feeling about now.  does anyone know how much of the swiss 1,145 tons of gold reserves (2008) are in foreign hands?  the big holders italy and france (2,400+ tons each) are both insolvent so may be held for ransom by the ecb, but not all the nations' gold under 33 liberty street are as easily subject to confiscation (?). 

bilbert's picture

"They will begin to steal from each other??

Question:  "How many hedge funds can fit through AAPL's Emergency Exit?"

Goldilocks's picture

Mark 10:24-25

King James Version (KJV)

24 And the disciples were astonished at his words. But Jesus answereth again, and saith unto them, Children, how hard is it for them that trust in riches to enter into the kingdom of God!

25 It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.

The Duke of New York A No.1's picture

Agreed ... an easy way to counter the EU CDS games played from NY and London.

lasvegaspersona's picture


Unless you own 100,000 shares (about $15 million) you cannot take posession. Even then you need the cooperation of an Authorized Participant. GLD is NOT a way to get physical gold, it is a way to bet on the price of gold. To get physical gold you should just buy physical gold.

AlaricBalth's picture

Many others are starting to "get it" as well. Where I come from, when there is smoke, there is fire.

From German Spiegel Online, Oct 2012

For decades, German central bankers have contented themselves with written affirmations from their American colleagues that the gold still remains where it is said to be stored. According to the report, the bar list from New York stems from "1979/1980." The report also noted that the Federal Reserve Bank of New York refuses to allow the gold's owners to view their own reserves.

Not surprisingly, this prompted strong reactions in Berlin: The relevant Bundesbank board member Carl-Ludwig Thiele was summoned to Berlin to provide an explanation to the parliamentary budget committee. Heinz-Peter Haustein of the business-friendly Free Democratic Party (FDP) was even quoted by Germany's mass-circulation Bild newspaper as saying that "all the gold has to be shipped back."

As a result, in addition to safeguarding the reserves of over 60 countries, the Federal Reserve Bank of New York continues to hold 1,536 metric tons of German gold -- or nearly half of Berlin's reserves. This enormous hoard of gold is stored in the fifth subfloor of the bank's building on Liberty Street, 25 meters (80 feet) below street level, and 15 meters below sea level. According to the bank's website, the vault rests on the bedrock of Manhattan Island.

Tourists are allowed to venture below street level to see the vault. After descending in an elevator, they stand in front of an enormous steel cylinder that pivots like a door in a 140-ton steel-and-concrete frame. But not even the owners are allowed to view their own gold. According to the Federal Audit Office report, the Fed explained that "in the interest of security and of the control process" no "viewings" are possible.

Finally, in 2007, "following numerous enquiries," Bundesbank staff members were allowed to see the facility, but they reportedly only made it to the anteroom of the German reserves.

In fact, auditors from the Bundesbank made a second visit in May 2011. This time one of the nine compartments was also opened, in which the German gold bars are densely stacked. A few were pulled out and weighed. But this part of the report has been blacked out -- out of consideration for the Federal Reserve Bank of New York.

"I would like more transparency on the issue," says Bundesbank board member Thiele. The Americans are very sensitive, though, when it comes to security procedures in their gold storage facilities. In their second major depository, the legendary Fort Knox, practically no one in recent decades has been allowed to view the gold reserves."

Cathartes Aura's picture


According to the Federal Audit Office report, the Fed explained that "in the interest of security and of the control process" no "viewings" are possible.

no peeking, it's all under control.  !!

perception, managed.

Raynja's picture

the wonderful wizard of oz said to not question your perception

espirit's picture

The Golden Rule.

"Whoever has the Gold, makes the rules."

andrewp111's picture

They just don't want anyone tunneling in there or otherwise eyeballing the security measures. It is called "security by obscurity", and it usually means there are hidden flaws in the security.

AlaricBalth's picture

I especially liked this quote, "A few were pulled out and weighed. But this part of the report has been blacked out -- out of consideration for the Federal Reserve Bank of New York."

What happens in the FRBNY, stays in the FRBNY!

andrewp111's picture

Gross makes money off Fiat. He is a bond guy, after all. And he supported the Trillion Dollar Coin. No doubt, he was talking his book, since minting TDCs would drive interest rates negative and make Bill Gross a fortune.

DoChenRollingBearing's picture

@ Supernova Born, + mucho.  Au and Pt come from the stars blowing up...


I am waiting to see if there will be a Press Conference by the Bundesbank tomorrow (as a commenter replied in the "Germany wants their gold back" thread earlier today).  If this whole thing is true about Germany wanting their gold back, it will be what Tyler wrote: the biggest financial story of the year.

walküre's picture

Gold über alles


Der Schatz der Nibelungen and Richard Wagner's "Ring der Nibelungen" have been on my mind recently.

Siegfried will slay the dragon to get the treasure (back to Germany).

idea_hamster's picture

^ [post fail]

It's good to hear Gross say this out loud, but it can't come as too much of a surprise.

In 2008, inter-bank lending effectively ended not because the banks didn't know how risky other banks were, but because they did know -- they knew that everyone had the same crappy balance sheet and outlook.

Now that all the risk has been pawned off on the taxpayers, the central banks are coming to the same conclusion: "our book looks awful -- and that means theirs does too."

taxpayer102's picture


"...the world’s six largest central banks have collectively issued six trillion dollars’ worth of checks since the beginning of 2009 in order to stem private sector delevering. Treasury credit is being backed with central bank credit with the interest then remitted to its issuer. Should interest rates rise and losses accrue to the Fed’s portfolio, they record it as an accounting liability owed to the Treasury, which need never be paid back. This is about as good as it can get folks. Money for nothing. Debt for free." - Bill Gross

Raynja's picture

which only leaves one question

why are they taxing us>?

Cathartes Aura's picture

because that's what we're for - it's in the contract.

zorba THE GREEK's picture

Gross recently loaded up on MBS and is raking it in. He made a mistake shorting bonds before

but has made up for his past follies. It is good to learn from your mistakes. Zorba has learned

from his mistakes. Zorba will no longer date women with large Adams apples.

redpill's picture

Die Hard references always get +1

fuu's picture

Nice twitter questions yesterday.

redpill's picture

Thanks, shockingly none of them got asked.

The Gooch's picture

My guess is Ben Shalom will never do that again.

jumbo maverick's picture

Well I've been thinking about that. Why would Chairsatan go to twitter to "answer" questions? First off a grown man, never mind he is one of the most powerful men in the world, but a grown man using twitter, I mean come on.
Second what did he try to accomplish by going on twitter? Anyone with a turd for a brain could have seen what a PR disaster the whole idea was so why do it?
I think that this twitter stunt was all masterminded by a group smarter than Chairsatan. Chairsatan was being used and he didn't even know it.
Eventually when the economy starts getting really dark to even the most non interested Joe Sixpack the twitter stunt will come full circle.
When it's clear to all that the economy is in the tank then TPTB will come out strong against Ben and they will label him as unstable, a crazy and they will use the twitter stunt as part of the picture they paint against him
TPTB will insist that Ben began to run amok and he became uncontrollable. They will plead for support and cooperation from the public insisting that with Ben now out of the picture they can get the economy back on track and things will turn around because now that crazy Ben has been taken out of the picture.
Just watch this is what will happen. Ben is riding high now but who knows in a few months hell even maybe a few weeks he will be thrown under the bus. The twitter stunt is just a small part of the bigger picture. I wouldn't be surprised that government agencies locate kiddie porn on Ben's computer. That may start the whole downfall for him.i

The Gooch's picture

It was orchestrated by a University mostly funded by "loan a student a bubble".

The "rogue" commentators know Ben Shalom is just a kazoo, as do his handlers.

It' was still epic.

They underestimated us once again. No conspiracy necessary. 

Raynja's picture


thats exactly whats going to happen. i've been saying for a while that they are going to need a "volcker" to come in after the bernank or this dollar experiment is going to demonstrate exponential.

Silver Bug's picture

Western Central banks are starting to scramble. They are getting scared.

Keep voting with your dollars. Keep stacking gold and silver.

Assetman's picture

The Bundesbank has little reason to trust a printing crazy ECB, and why should they?  

The final recourse for the Germans is to prepare their gold holdings as the ultimate trump card in case the ECB prints itself into oblivion.  A prudent course of action for the Bundesbank is to prepare the presses for the New Deutchemark, which if backed by gold, could vie for the world's reserve currency if the rest of the developed world becomes fiat unwound.

Of course, one actually needs to have the gold be real and truly accessable in storage before the masses embrace it with any confidence.  It's not that the Bundesbank doesn't trust the Federal Reserve, moreso than the Bundesbank making prudent preparations in the event the developed world becomes unglued with currency crises.

And if gold isn't money, as hypothisized by our brilliant PhD in the Keynesian Realm, why does the Federal Reserve and our own goverment go though such intricate processes to store and protect it? 

Yeah, if I were the Germans, I'd be more than willing take that storage burden off of their hands.


Rusty Shorts's picture

but..but, gold is backed by nothing.