Bundesbank Official Statement On Gold Repatriation

Tyler Durden's picture




 

When we first heard about it, we thought Handelsblatt had gotten something very wrong. The implications were just so staggering. Turns out the news was spot on. Here is the official announcement from the Bundesbank, which roundly refutes all the spin the Frankfurt bank spoon-fed the people in October and November when it repeated time after time that there is nothing wrong with keeping German gold in NY and Paris, and on the contrary, it was better for everyone involved.

From the Bundesbank:

By 2020, the Bundesbank intends to store half of Germany’s gold reserves in its own vaults in Germany. The other half will remain in storage at its partner central banks in New York and London. With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time.

The following table shows the current and the envisaged future allocation of Germany’s gold reserves across the various storage locations:

  31 December 2012 31 December 2020
Frankfurt am Main 31 % 50 %
New York 45 % 37 %
London 13 % 13 %
Paris 11 % 0 %

 

To this end, the Bundesbank is planning a phased relocation of 300 tonnes of gold from New York to Frankfurt as well as an additional 374 tonnes from Paris to Frankfurt by 2020.

The withdrawal of the reserves from the storage location in Paris reflects the change in the framework conditions since the introduction of the euro. Given that France, like Germany, also has the euro as its national currency, the Bundesbank is no longer dependent on Paris as a financial centre in which to exchange gold for an international reserve currency should the need arise. As capacity has now become available in the Bundesbank’s own vaults in Germany, the gold stocks can now be relocated from Paris to Frankfurt.

* * *

So it took the Bundesbank over 10 years to figure out that "the Bundesbank is no longer dependent on Paris as a financial centre in which to exchange gold for an international reserve currency should the need arise."

Well, as long as it has nothing to do with the recent political schism between socialist beggar France and the only country left in Europe that is not an all out parasite, all is well.

Finally, compare the above statement with the following from November:

Remarks On German Gold Reserves:

 

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.

 

Let’s get back to facts and figures: I would like to remind you that our gold reserves are part of the German currency reserves. These were accumulated over time thanks, in part, to Germany’s economic boom in the 1950s and 1960s. Germany’s growing economic strength, especially its strong external position, resulted in rather large trade account surpluses, most of them acquired in US dollars. At that time, the International Monetary System, known as the Bretton Woods System, was dominated by the US currency. As long as this system was in force, which was up until 1971, the US Fed was obliged to exchange its currency for gold.

 

Any current account surplus thus resulted in an increase in Germany’s gold reserves. This gold was stored in US vaults for obvious reasons [ZH: sorry, we don't have an econ PhD: what are the "obvious reasons"?]. This was not only the case for the gold hold by the Bundesbank – it was, in fact, common practice. By the way: it was the only practical thing to do, since running a trade account deficit meant a decrease in gold stocks.

 

Thus, we are now looking back at sixty years not only of fruitful cooperation in many fields and international fora, but also of storing gold and trading via the New York Fed. As a matter of fact, it is sensible for us to do so in New York, as Frankfurt is not a gold trading venue.

 

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.

 

At the same time, you can be assured that we are confident that our gold is in safe hands with you. The days in which Hollywood Germans such as Gerd Fröbe, better known as Goldfinger, and East German terrorist Simon Gruber, masterminded gold heists in US vaults are long gone. Nobody can seriously imagine scenarios like these, which are reminiscent of a James Bond movie with Goldfinger playing the role of a US Fed accounting clerk.

 

While gold is important, we have to combat a crisis of confidence in the euro area. This is the task we need to concentrate on. And we will do so.

Until we don't, three months later, and decide to repatriate said gold after all...

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Wed, 01/16/2013 - 09:33 | 3157147 economics9698
economics9698's picture

"By 2020, the Bundesbank intends to store half of Germany’s gold reserves in its own vaults in Germany."

To be changed to 100% by 2015. 

Wed, 01/16/2013 - 09:36 | 3157158 GetZeeGold
GetZeeGold's picture

 

 

Only half.....cause asking for all of it would be crazy.

Wed, 01/16/2013 - 09:38 | 3157169 JPM Hater001
JPM Hater001's picture

I see no reason to repatriate any of it in that case.  You are going to go to war to recover it eventually anyway.  whats the difference between half and all?

Wed, 01/16/2013 - 09:46 | 3157204 CH1
CH1's picture

The ONLY purpose of this statement is to keep the suckers asleep.

Wed, 01/16/2013 - 10:01 | 3157264 Pladizow
Pladizow's picture

"By 2020, the Bundesbank intends to store half of Germany’s gold reserves in its own vaults in Germany"

So the 2nd half will be written off as a complete loss!

Wed, 01/16/2013 - 10:02 | 3157273 GetZeeGold
GetZeeGold's picture

 

 

.....and it's gone.

 

It's gonna take some time to explain it.

Wed, 01/16/2013 - 10:05 | 3157288 Pladizow
Pladizow's picture

All of that repatriated gold will be mined between mid 2013 and 2020!

Wed, 01/16/2013 - 10:21 | 3157344 Rossalgondamer
Rossalgondamer's picture

+Plad

A simple search of ZH would benchmark time for completed Europe to South American repatriation.

Then project upon West-to-East European transfer....minus English Channel boating accident.

Wed, 01/16/2013 - 10:33 | 3157375 Harlequin001
Harlequin001's picture

Hey, fuck, I mean, I believe him.

I mean, why not?

sounds reasonable...

Wed, 01/16/2013 - 10:39 | 3157394 The Juggernaut
The Juggernaut's picture

hahaha 0 to Paris... they'd tax it.  Then why the hell leave it in USA?  Their leaders are the biggest theives.

Wed, 01/16/2013 - 10:54 | 3157452 BaBaBouy
BaBaBouy's picture

"" "By 2020, the Bundesbank intends to store half""

Und 2020 ?

Und Only Half ?

Und Are You Idiots ???

 

Und the other Half Stays in the Global Cabal Mainipulation Machine in perpetuity...

Und I don;t think its gonna Fly With The German People.

Wed, 01/16/2013 - 11:02 | 3157492 BaBaBouy
BaBaBouy's picture

Shit, It's Gonna Take 7 YEARS For The Germans to Get 19% Of Their GOLD Back !

 

Does anyone actually beleive the BULLSHIT ???

Wed, 01/16/2013 - 11:07 | 3157518 trav777
trav777's picture

it takes a long time to dig this gold up from deep storage.  German gold is buried under a lot of stuff.

Wed, 01/16/2013 - 11:09 | 3157522 Manthong
Manthong's picture

“On the tape, Mr. Juncker says he has “had to lie” and, speaking about touchy economic topics, “When it becomes serious, you have to lie.”

http://www.zerohedge.com/article/head-eurogroup-admits-lying-about-secret-greek-meeting-out-fears-market-collapse-when-it-bec

Wed, 01/16/2013 - 11:17 | 3157545 strannick
strannick's picture

The key word in the press release is ''2020''. Thats the same time ZIRP will end, Bart Chilton will announce the findings of the CFTC Silver Investigation, QE will end, the economy will recover and Pigs will fly. They wont repatriate their gold because they cant. Which means buy gold.

Wed, 01/16/2013 - 11:18 | 3157553 Harlequin001
Harlequin001's picture

Why go to the bother of storing it when you can share it with 4 million other investors...

Wed, 01/16/2013 - 11:35 | 3157605 Manthong
Manthong's picture

Why go to the bother of storing it when you can share the notion of it  with 40 million other investors...

Wed, 01/16/2013 - 12:57 | 3157911 FEDbuster
FEDbuster's picture

Does this mean we can pull half our troops out of Germany now and close half our bases there?

Wed, 01/16/2013 - 15:34 | 3159069 Enslavethechild...
EnslavethechildrenforBen's picture

It means that the green paper confetti we are paying our troops will buy them absolutely nothing in their retirement. Poor fools.

Wed, 01/16/2013 - 11:09 | 3157530 AlaricBalth
AlaricBalth's picture

 

This is the response today from Germany's Repatriate Our Gold campaign.

 

Statement by Peter Boehringer
on behalf of
Repatriate Our Gold
and the German Precious Metals Association

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

Wednesday, January 16, 2013

We welcome the Bundesbank's announcement to repatriate significant portions of Germany's gold held abroad.

All reasons cited in the past for this storage had either been false or at least outdated since 1990 (with the end of the Cold War and the theoretical military threat to the Bundesbank's domestic gold vaults).

We are also satisfied that propaganda arguments (e.g. "chauvinistic/nationalistic demands for repatriation," "repatriation too expensive," "absurd debate questioning the integrity of US/UK central banks," etc.) have not been repeated at the Bundesbank's press conference today. Actually, by announcing some repatriation, the Bundesbank has implicitly acknowledged our point of view of gold as real money and integral part of a nation's monetary reserves.

But we do not approve of the speed and volume of the planned repatriation.

The Bundesbank has just announced that it will repatriate only 675 tonnes by 2020 by then bringing the total of German gold held in Germany to approximately 50 percent (1,700 tonnes) of total German gold reserves. The Banque de France will allegedly be given up as a Bundesbank storage facility (374 tonnes) and up to 300 of 1,535 tonnes will be repatriated from the New York Fed.

In our view, there is a lot of room for speeding up and increasing the volumes for this repatriation.

In addition, the Repatriate our Gold campaign insists on proper and independent physical and full audits of the Bundesbank's own vaults in Germany. This includes the publishing of bar number lists, which has been overdue for years. These gold bar number lists are important to prove or disprove multiple ownership of specific bars which could have come about through gold loans. This is one more reason to audit and repatriateall gold bars -- as an incomplete audit and incomplete lists would not fulfill this important purpose.

To quote from the statement of purpose of the Repatriate Our Gold campaign:

"Gold has been natural money for thousands of years. It has been used throughout history either as physical coinage or as the solid cornerstone for stable paper currencies. Up until 1913 most Western societies prospered and grew steadily and naturally under a monetary standard with at least partial gold backing. The gradual abandonment of the gold backing throughout the 20th century and the ultimate delinkage of all currencies from gold in 1971 is the fundamental cause of the ongoing inflation (the U.S. dollar has lost 98 percent of its purchasing power since 1913) as well as the main reason for the global financial crises since 2007. We believe it is essential to re-introduce a partial gold backing for the world's monetary system. And to back future national currencies, the gold needs to be physically present in the respective country. Gold needs to be re-monetized -- at least on a voluntary basis as a means of payment the people are free to choose at any time.

"We therefore campaign for:

"-- Independent, full, neutral, and physical audits of the gold hoards of the world's central banks.

"-- The repatriation of all central bank gold; that is, the physical transport into the respective ownership countries."

Wed, 01/16/2013 - 11:17 | 3157540 Harlequin001
Harlequin001's picture

Yes, and they should repatriate ours as well.

Oh, hang on, wait a minute, yes, er I think they've sold it...

Wed, 01/16/2013 - 11:45 | 3157648 JeffB
JeffB's picture

Thank you,  AlaricBalth.

That is an important bit of info I wouldn't have been privvy to otherwise. It is a very sound and reasonable statement and should be heeded.

If it isn't, I think it points all the more to the validity of their concerns.

Wed, 01/16/2013 - 11:52 | 3157662 Sofa King Confused
Sofa King Confused's picture

Gold confiscation in the U.S. to begin in 5.....4.......3....

Wed, 01/16/2013 - 18:53 | 3160039 MagicHandPuppet
MagicHandPuppet's picture

It's OK.  All of your golds are safe with us.

Wed, 01/16/2013 - 10:21 | 3157345 pemdas
pemdas's picture

Why take 8 years to move 300 tons of gold?  Am I wrong in thinking Fed Ex could do it overnight?

Wed, 01/16/2013 - 10:28 | 3157362 Stuck on Zero
Stuck on Zero's picture

Don't be silly.  It takes years to unrehypothecate the gold from a long line of claimants.

 

Wed, 01/16/2013 - 11:17 | 3157422 DaveyJones
DaveyJones's picture

"By 2020, the Bundesbank intends... to still exist

Wed, 01/16/2013 - 12:37 | 3157809 smlbizman
smlbizman's picture

as stated below...they have to dig it out of the ground first..

Wed, 01/16/2013 - 12:26 | 3157760 markovchainey
markovchainey's picture

+1000

Wed, 01/16/2013 - 12:24 | 3157754 glenlloyd
glenlloyd's picture

Something Juncker said, "when it's serious you have to lie," makes me believe 50% is actually 100%. I would guess that internally this is already understood at the BUBA

Wed, 01/16/2013 - 09:48 | 3157213 pan-the-ist
pan-the-ist's picture

Wars are expensive.  At some point even the US will l earn you cannot finance them on credit.

Wed, 01/16/2013 - 10:43 | 3157412 marathonman
marathonman's picture

Wrong.  The US has been doing it for over 100 years and the UK has been doing it for over 300 years.  It's really the only way to pay for wars.  Inflation does the heavy lifting.

Wed, 01/16/2013 - 10:54 | 3157445 DaveyJones
DaveyJones's picture

long history disagrees. So does common sense. If wars are nothing more than resource grabs and system control it becomes increasingly expensive to merely protect yourself as both your enemy list and military percentage of the budget expands exponentially and your return on investment moves in the opposite direction. Just as troublesome, your competitors can hurt you with all sorts of other weapons. See: us   

Wed, 01/16/2013 - 15:35 | 3159084 Enslavethechild...
EnslavethechildrenforBen's picture

Wars aren't financed on credit, their financed on theft and slavery.

Wed, 01/16/2013 - 16:56 | 3159505 newdoobie
newdoobie's picture

"A Short Victorious War" War for Profit

Wed, 01/16/2013 - 10:49 | 3157441 kliguy38
kliguy38's picture

EXACTLY......but they will get VERY little back ....as this plays out there will be extraordiinary excuses and foot dragging as a meager amount of bullion finds its way into the light and then "suddenly" the entire process will magically be put on "hold"......pooof!

Wed, 01/16/2013 - 09:40 | 3157172 AlaricBalth
AlaricBalth's picture

"By 2020..."
Are they planning on rowing it across the Atlantic in a kayak, brick by brick?
What a joke!

Wed, 01/16/2013 - 09:45 | 3157191 GetZeeGold
GetZeeGold's picture

 

 

It will take 8 years of careful planning to know how to handle it....you have to understand that they haven't had experience dealing with the actual stuff for quite some time.

Wed, 01/16/2013 - 09:47 | 3157200 mayhem_korner
mayhem_korner's picture

 

 

I was thinking it was going to be a DHL shipment of GLD certificates...

(oh...)

Wed, 01/16/2013 - 09:58 | 3157247 GetZeeGold
GetZeeGold's picture

 

 

Might be faster to sew it into lining of your clothes and walking it across the border.

Wed, 01/16/2013 - 10:33 | 3157376 imbrbing
imbrbing's picture

Or make a couple hundred thousand shirts out of it.

Wed, 01/16/2013 - 10:59 | 3157478 DaveyJones
DaveyJones's picture

or fill a shitload of teeth

Wed, 01/16/2013 - 11:03 | 3157495 Citxmech
Citxmech's picture

"Is it safe?"

Wed, 01/16/2013 - 11:16 | 3157546 CH1
CH1's picture

"Is it safe?"

No, in fact it's not! Gold bars have a highly concentrated mass, and are therefore more deadly than rocks, hammers, and even crowbars!

They must be regulated for your safety!

Wed, 01/16/2013 - 09:58 | 3157249 mayhem_korner
mayhem_korner's picture

 

 

Maybe Frodo can lug it for 'em...

Wed, 01/16/2013 - 10:30 | 3157369 Rossalgondamer
Rossalgondamer's picture

Tradition's a slow-mover

Wed, 01/16/2013 - 10:05 | 3157290 smlbizman
smlbizman's picture

it will take this long "cause u have to dig it out of the ground first...

Wed, 01/16/2013 - 11:04 | 3157504 Citxmech
Citxmech's picture

At least it only costs $5.00.

Wed, 01/16/2013 - 09:43 | 3157184 CPL
CPL's picture

By 2013, the Bundesbank intends to store All of Germany’s gold reserves in its own vaults in Germany. The Tungsten will remain in storage at its partner central banks in New York and London.

 

Fixed the statement.

Wed, 01/16/2013 - 11:06 | 3157512 kensdad
kensdad's picture

The Bundesbank will not get its gold.  They blew their chance.  They have now signaled to other central banks that it is time to repatriate, and I expect that others will not take 7 years to repatriate a small fraction.  The run on gold will mean that the Bundesbank goes to the back of the line.

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