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 - 11:18 | 3157552 boogerbently
boogerbently's picture

How long until all countries nationalize their native gold (mines)?

Wed, 01/16/2013 - 12:39 | 3157817 Chuck Walla
Chuck Walla's picture

Don't forget that pesky gold to tungsten ratio!

 

FORWARD SOVIET!

Wed, 01/16/2013 - 22:16 | 3160829 Buck Johnson
Buck Johnson's picture

But remember, it will take 7 FREAKING YEARS TO DELIVER!!!!!!!!  Why can't they get the tonnage at one time or in 7 months or 1 year why that long.  It's because the Fed has Hypothicated all the gold to such a  point that they don't know who owns what.  And what this should tell you is that they don't have the gold if they need that much time.

Wed, 01/16/2013 - 09:40 | 3157173 Stuart
Stuart's picture

you know it. 

Wed, 01/16/2013 - 10:14 | 3157177 Mercury
Mercury's picture

 Yes, soon to be amended to:

 

Given that each of the other listed countries operate a fiat monetary system controlled by an aggressive central bank with a strong, inflationary bias, the Bundesbank no longer forsees a need in these financial centres to exchange gold for any of these international currencies. Germany and the German people are particularly wary of formidable inflationary forces due to our country's hard earned experience in this area during the 20th century.

 

In conclusion, it's not you, it's us. We really hope we can still all be friends. :)
What time do you open on Monday?

Wed, 01/16/2013 - 09:44 | 3157190 I need more cowbell
I need more cowbell's picture

Yes, there is no Goldfinger, banksters. Pussy galore on the other hand...

Wed, 01/16/2013 - 10:06 | 3157277 IamtheREALmario
IamtheREALmario's picture

A. Given that WWIII is prophecized to complete destroy NY City, I guess it depends on when the war is scheduled.

B. It makes me wonder where the gold that was taken out from the vaults under the twin towers before they were pulled down on 9/11 went. The ghosts of the Gruber brothers planned and executed the perfect heist.... with a little help from Dick Cheney and Larry Silverstein?

Wed, 01/16/2013 - 10:46 | 3157432 Hobbleknee
Hobbleknee's picture

You know the US has bases in Germany, right?

Wed, 01/16/2013 - 11:04 | 3157501 FeralSerf
FeralSerf's picture

Not to worry.  It's safely in a vault in Tel Aviv.

Wed, 01/16/2013 - 10:57 | 3157461 eddiebe
eddiebe's picture

"To be changed to 100% by 2015. " Doubtful.

The statement by the bundesbank just shows that the mighty US. is still large and in charge. After all they are still an occupying force in Germany, and Germany still is forced to kiss ass. Maybe that will change eventually, who knows? If Germany turns into an enemy, their chances of getting the gold turn to nil. I would imagine it took some serious negotiating to get the small amount from the Fed that they were able to get.

 I know one thing: If I had my 'drathers' and given the option to hold all the gold that is owed to me in my own hand rather than someone elses, I would choose mine.

Wed, 01/16/2013 - 11:05 | 3157502 pupton
pupton's picture

Germany just "got physical". 

So does this leave less gold in NY for the banksters to leverage and short sell against, etc.?

Wed, 01/16/2013 - 11:08 | 3157520 Crassus
Crassus's picture

We built a really nice tunnel under Berlin during the cold war.

Wed, 01/16/2013 - 11:38 | 3157613 Silver Garbage Man
Silver Garbage Man's picture

Bob Pissani told me it was because " at half a million euros for storage, it's too expensive for such a small storage space."

Wed, 01/16/2013 - 11:41 | 3157626 MFLTucson
MFLTucson's picture

Or sooner!

Wed, 01/16/2013 - 12:41 | 3157822 tmosley
tmosley's picture

*Because the rest was stolen.

Wed, 01/16/2013 - 09:34 | 3157149 Troy Ounce
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Strange to write about James Bond. Sure this is not from The Onion?

Wed, 01/16/2013 - 09:44 | 3157192 CPL
CPL's picture

No, once the Onion was humour.  Turns out it really was prognostication of how bizarre things have become.

Wed, 01/16/2013 - 09:35 | 3157154 PontifexMaximus
PontifexMaximus's picture

why not immediately? are there still problems to have it phys available in NY?

Wed, 01/16/2013 - 10:02 | 3157268 holdbuysell
holdbuysell's picture

They could do it all by tomorrow and the by 2020 wording would still be by the letter correct, albeit misleading.

I've seen enough of these statements that are by the letter correct but misleading to think this is of the same feather.

So, who's next?

Wed, 01/16/2013 - 10:52 | 3157454 waterwitch
waterwitch's picture

How do we know that it hasn't been done already?  Maybe they tried and got tungsten, and this time they'll check?

Wed, 01/16/2013 - 10:07 | 3157308 IamtheREALmario
IamtheREALmario's picture

Oye, the paperwork ...

Wed, 01/16/2013 - 10:29 | 3157367 Shevva
Shevva's picture

It takes time to arrange minis strong enough to take the gold.

Wed, 01/16/2013 - 09:35 | 3157155 perchprism
perchprism's picture

 

Gold is wherever you find it.

Wed, 01/16/2013 - 09:35 | 3157157 RubberMartyr
RubberMartyr's picture

That's what I was thinking.

Wed, 01/16/2013 - 09:36 | 3157159 mayhem_korner
mayhem_korner's picture

 

 

And this from the spin doctors as evidence there is 'nothing to see here':

Dominic Schnider, global head of commodity research at UBS Wealth Management told CNBC, "Holding gold in key financial centers (New Tork, London or Paris) makes sense and can give access to foreign currencies like the U.S. dollar. On the other hand, we have seen how easy money printing is. Thus, we don't need gold anymore as collateral."

http://www.cnbc.com/id/100382718

Only in the parable of the rich man and Lazarus has a greater chasm existed than the one between reality and what the soothsayers at CNBC put out.

Wed, 01/16/2013 - 11:03 | 3157500 DaveyJones
DaveyJones's picture

"we have seen how easy money printing is. Thus, we don't need gold"

the most ironic proof of value I've ever heard

Wed, 01/16/2013 - 09:38 | 3157163 tuttisaluti
tuttisaluti's picture

What country is next and will try to fronrunning germany? Could be that by 2020 no more Gold is left for them.

Wed, 01/16/2013 - 09:42 | 3157180 youngman
youngman's picture

I think there are quite a few asking for the order if you know what I mean............

Wed, 01/16/2013 - 15:00 | 3158885 jeff montanye
jeff montanye's picture

netherlands: 500 tons in foreign hands.  switzerland, over 1000 tons of reserves, some (how much?) in foreign hands.  

france and italy have about 2400+ tons each, again how much in foreign hands?  supposedly 95% of the n.y. fed's gold is foreign owned.

the post above notes it took ten years for the buba to realize the euro made obsolete the french connection, but apparently they realized at least that some gold should be repatriated then:

http://www.telegraph.co.uk/finance/financialcrisis/9631962/Bundesbank-sl...

Wed, 01/16/2013 - 09:45 | 3157199 farragut
farragut's picture

It's quite possible (even probable?), the 2020 date is mentioned only to assuage any fears in the general public about the demand for gold. Meanwhile, Germany has told the Fed et al, "we want all our gold by the end of 2013--or sooner."

Wed, 01/16/2013 - 10:04 | 3157267 Pseudo Anonym
Pseudo Anonym's picture

yeah, i agree:

Germany has told the Fed et al, "we want all our gold by the end of 2013--or sooner."

and what did the fed say?  fuck off.  now the krauts are trying to save face with meaningless statements, like by 2020.  bullshit.  if you dont sit on your stash of phyzz gold now, you dont have it germany.  and will not have it by any time soon either.  so stop that ass kissing and boot licking like we 'have a trusting and mature relationship with the fed" and all that.  that wont help you get your gold.  deal with it.

Wed, 01/16/2013 - 09:38 | 3157164 10PastMidnight
10PastMidnight's picture

I guess letting everyone else in on the fun n run was not in their plan.

Wed, 01/16/2013 - 09:38 | 3157165 coulous
coulous's picture

tungstene stock shortage

Wed, 01/16/2013 - 09:38 | 3157167 pvzh
pvzh's picture

"By 2020" is basically never.

Wed, 01/16/2013 - 09:49 | 3157219 fonzannoon
fonzannoon's picture

2020 my anus. They put that in there as a favor. Behind the curtains they said "we want all our shit, asap mfkers".

So does anyone else hold gold anywhere else that will now start asking for it?

Wed, 01/16/2013 - 09:55 | 3157239 jmcadg
jmcadg's picture

Absolutely fonz. 2020 is a headfake to stop a global panic.

Good luck with that.

Reminds me of this

http://www.youtube.com/watch?v=lLxkyWhgaSQ

'follow the money'

Wed, 01/16/2013 - 11:02 | 3157498 MsCreant
MsCreant's picture

Everyone with a Gold ETF? Heh, heh, heh.

Wed, 01/16/2013 - 10:25 | 3157353 Shell Game
Shell Game's picture

2020 is the new 2013..

Wed, 01/16/2013 - 10:38 | 3157386 CPL
CPL's picture

Notice how the five year view has turned into seven.

 

Inflation isn't just fixed on prices, it's fixed on operational timelines and availability now.  It was bad enough that TPTB was wasting money, now they are printing 'time'.

 

That's how surreal the situation has become.  Printing 'time'.  One thing humans are lousy at managing.

Wed, 01/16/2013 - 11:06 | 3157509 MsCreant
MsCreant's picture

All of these debates (debt ceiling, fiscal cliff) are like that, distractions from the truth (Bankruptcy). In both cases (fiat time, fiat money) eventually everyone loses faith in it and there is a hard landing.

Wed, 01/16/2013 - 11:09 | 3157525 DaveyJones
DaveyJones's picture

I'd rather they do time than print it

Wed, 01/16/2013 - 09:40 | 3157178 youngman
youngman's picture

So they saved 50% of their gold.....lost the other half....so sad...bad decisions are well....bad decisions....

Wed, 01/16/2013 - 09:41 | 3157183 frenchie
frenchie's picture

oops

dommage pour les frenchies 

Wed, 01/16/2013 - 09:44 | 3157185 Kaiser Sousa
Kaiser Sousa's picture

good morning my fellow ZH real money comrades.....

(yawn.........)

FUCK YOU BERNANKE.....

Wed, 01/16/2013 - 09:43 | 3157187 Peter Pan
Peter Pan's picture

None of this explains why a more stable and prudent economy would want to store gold in the USA. If anything the USA shoukd be storing its gold in Germany.

In any case the timetable and percentage change in location is measly and will be dirched before long.

Wed, 01/16/2013 - 09:49 | 3157215 mayhem_korner
mayhem_korner's picture

 

 

This is not about economics.  It's about sovereignty.

Wed, 01/16/2013 - 10:17 | 3157265 sessinpo
sessinpo's picture

Peter Pan: "None of this explains why a more stable and prudent economy would want to store gold in the USA."

 

Mayhem_korner:   "This is not about economics.  It's about sovereignty."

 

My comment: A perfect example of non critical thinking. Peter Pan is asking why a nation would store its gold on foriegn land. Mayhem_korner makes a nonsensical response (quoted above). I respond:  Yes, it's about sovereignty, which is why one should store its gold on their own land.

 

Then Peter Pan makes a ridiculous statement that the USA should store its gold in Germany. Again, nonsensical. Why do I, why would you want to place your assets in someone else's hands where you have to physically fight to get it back if there is a dispute?

 

I'll tell you what, how about both Mayhem_korner and Peter Pan give me all their assets for safe keeping and you'll get them back (wink, wink), or maybe I'll just replace your assets with a 308 winchester shell to your brain, because obviously you are both brain dead with those statements.

 

Have we lost all logic here even amongst ZH?

Wed, 01/16/2013 - 10:32 | 3157336 mayhem_korner
mayhem_korner's picture

 

 

Why do you agree with me and criticize me in the same paragraph, troll?  Did you short yourself one of your 4 xanax pills this morn...?

You seem to ignore the rather important fact that the current state has Germany's gold on deposit in the U.S.  So "not storing it" in a foreign country is a option long since gone and not really insightful relative to the current situation.  Obviously you don't have a bank account, a job, or anything else that places certain of your claims of your assets/returns of labor in the custody of another entity.  If you did, you wouldn't make such statements... (Either that or you've had a close call yourself with yer Winchester, Jethro...)

Wed, 01/16/2013 - 19:44 | 3160221 sessinpo
sessinpo's picture

repeat

Wed, 01/16/2013 - 19:42 | 3160222 sessinpo
sessinpo's picture

mayhem-korner  "Why do you agree with me and criticize me in the same paragraph, troll?"

 

Because you are inconsistent in your thought. And the fact that you lower the discussion into name calling make YOU the troll, not me. But I an not a whimpy liberal and I respond in unkind and call you an asswipe troll. Now let's see you lower the discussion once more.]

 

Let me clearify my post as you don't have much critical thinking skills.

Peter Pan stated: "None of this explains why a more stable and prudent economy would want to store gold in the USA. If anything the USA shoukd be storing its gold in Germany" 

If you, Mayhem_korner, reads that correctly, Peter Pan is asking for an explanation as to why a nation would want to store its gold in a foriegn land.

YOU responded: "his is not about economics.  It's about sovereignty."

Your response is illogical. If I want to protect my soverignty, then I would NOT want to store my gold abroad.

 

Now, I patiently await YOU, the asswipe troll, to respond logically to my post or go down the path of name calling. By the way, I'm a bigger ASSHOLE then you so bring it.

 

And as an addition, Thread,  http://www.zerohedge.com/news/2013-01-16/it-will-take-fed-seven-years-de... , It Will Take The Fed Seven Years to Deliver 300 Tons of German Gold , supports my post.

 

My position is why would you trust a foriegn nation to hold your gold. We have so many people on here, rightly, that don't trust central banks. Do YOU NOT see the hypocracy? I say hold your gold in your own land and in hands your trust the most - yourself.

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