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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mayhem_korner's picture



You, my friend, are a moron.  I read Peter Pan's comment as "Germany is now the stronger economy, the shoe should rightly be on the other foot."  His comment was an observation of relative economic strength and that, if anything, it should be Germany that is the trustworthy steward of bullion.  But that is not the case.

My response is that irrespective of economic might, Germany does not trust the situation and simply wants to hold its bullion in its own hands (for which I cannot blame them as I do the same).  Whether Germany's bullion is held in the U.S. or its own land does not affect the value of what it shows on its balance sheet.  So there must be another reason for it to want to hold it in its own banks.  That reason is as I stated.

You're view that countries should not hold gold in foreign CBs is a correct, but completely irrelevant one.  Given that bullion is held in foreign lands, the issue - and the news here - is that a major player wants to rectify that. 

You are about three moves behind the actual conversation.  But thanks for playing.  Remember, this is fight club and if you don't have the stones to take some heat, then continue polishing your stinger in your sister's closet.

mayhem_korner's picture



One more thing.  Here's what you say:

If I want to protect my soverignty, then I would NOT want to store my gold abroad.

Let me make this kindergarten-easy for you (which is probably the limit with you, anyway)...

If I want to protect my sovereignty - and my gold is already stored abroad - then I would _________________.

If you come up with an answer different than "repatriate my gold", let me know.  Once you realize that that is the one and only answer consistent with your prior thought, it should dawn on you that you are criticizing me while at the same time agreeing 100% that this is about sovereignty.  You have more than a few disconnected synapses.

FeralSerf's picture

What sovereignty?  The U.S. military bases in Germany prevent that.

sessinpo's picture

Yes, but you are unlikely to have military action to get to vaults holding gold without great problems and notice. On the other hand, as TD has just posted, the Fed is claiming it would take 7 years to give Germany back 300 tons of gold. Would Germany have that problem if it stored that gold on its own land?


And so I got a lot of down arrows and NO LOGICAL RESPONSE. Come on people. Let's see some debate here. I'm waiting.


Anyway, FeralSerf, your point is well taken but in the context of the thread I do not think it applies. The US is not going to attack Germany any time soon.

mayhem_korner's picture



Illogical premises do not typically elicit logical responses.  There are several degrees of separation between what you believe to be a logical thought and reality.

Peter Pan's picture

If it's about soverignty then maybe Germany needs to get rid of foreign troops on its soil as well.

Zigs's picture

Just listened to CNBC cabal going out of their way to joke around about the announcement. 

Kaiser Sousa's picture

bunch of fucking propagandist they are....

not a mention of the story all day yesterday...


GetZeeGold's picture



The boys at CNBC better start paddling faster....cause this is quickly turning into one hell of a media snafu.

Kaiser Sousa's picture

nah, they aint worried...

they'll just bring in the serial Gold fondler Warren (ima buffoon) ButFuckBuffet to deflect...

mayhem_korner's picture



Can someone drum up a chart of boat insurance premiums?  I'm sort of longing to see a parabola...

Pseudo Anonym's picture


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

i bet a dime that the fed told buba to fuck off and now buba is trying to save face.  no deliveries will happen.  by 2020 is like by eternity

FunkyOldGeezer's picture

Why telegraph intentions 8 years ahead of conclusion????

Proof positive that (a) it doesn't actually exist in physical form that is available for delivery and (b) they've been shafted. IF there was no problem getting hold of physical, they wouldn't have to wait that long. I can't see the German people buying this.

Bullish for Gold until at least 2020?

mayhem_korner's picture



Bullish for physical gold.  Whether it moves or not, this is a steroid boost for physical/paper decoupling.

waterwitch's picture

I think Venezuela got their gold back, didn't they? Shmaht.

Pseudo Anonym's picture

deep storage, bitches

(a) it doesn't actually exist in physical form that is available for delivery

Super Broccoli's picture

i wouldn't leave 37% of my gold in Uncle Sam's vault !

HoofHearted's picture

And that's why we've all traded out our FRNs for the phyzz. No way Uncle Scam is eroding my buying power via inflation or confiscation.

SpanishGoop's picture



                           31 December 2012 31 December 2020

Frankfurt am Main 31 %                     14 %

New York              -4 %                       0 %

London                -3 %                       0 %

Paris                  -10 %                       0 %

kondratus's picture

ha ha ha

Till 2020 nobody will return German's gold))))

Till 2020 it will be international monetary instrument.

But this German's statement may urge other's, like Netherlands, etc to start repatriation of their gold

pndr4495's picture

First and intuitve thought about this is that THE RED SHIELD wants its gold in home port. My gut tells me it marks a macro shift in their strategy.

Silver Garbage Man's picture

How do you say "Turning Point" in German?

busted by the bailout's picture

Yes, but turning point in what?

The era of fiat currency?

The dollar as the world's reserve currency?

Dissolution of the EU?

All of the above?

Whatever it is, Germany is looking increasingly like the strong horse in the race.

paint it red call it hell's picture

"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." - and so it starts out..

I wonder if German citizens can feel it? Being jaw boned over the brow to keep trust in the elite of NY, Chicago, and DC? They will be first politically impoverished then financially responsible for the arrogance of those despots in Brussels.

THE DORK OF CORK's picture

"only country left in Europe that is not an all out parasite.................................."


Thats funny - what makes you think Germany is virtous ?

Its the biggest destroyer of capital in Europe by virtue of its car Industry.


Also trouble in its home market ? (depends what they are buying I guess but the numbers look bad)


major decline in German car reg this December………..could be a stat blip but
Dec car reg : – 16.4 %

this is 40,000~ less cars then last December………….half of the total yearly Irish consumption.
Greece total for the year was 58 ,482 (-40.1%) the largest % decline in Europe from a already very small 2011 base.
(In 2007 Greece car reg was 279 ,374.)

In contrast the albeit tiny Icelandic car market is up 56% in 2012.
Why is this ?
Icelandic savings is more or less internal / capital controls
It is not bailing out global banking /wage arbitrage operations so more capital is available in the home market to purchase external goods although car purchase is a waste of resources in my book.




rpboxster's picture

By 2020 includes "by 2013".  The long date may be just for calming effect.

ltsgt1's picture

I would love to know the logic behind German repatriating all of its gold from France but none from England.

IamtheREALmario's picture

Maybe family ties ...

Hapsburgs > German

Rothschilds > German

France is irrelevant

Mi Naem's picture

Like Germany, France is on the Euro, but Britain is on the Pound.  They collateralize their extensive trade with England. 

Besides, I think this is phased announcement number 1, designed to begin the homeward movement of their assets in a such a way as to avoid too much public embarrassment and panic.  They want to get as much of their gold home as they can before the stuff hits the fan, and they can't do that if they are throwing stuff up into the fan. 

And, yeah, it looks like France is irrelevant. 

Toronto Kid's picture

The Brits may have let Germany inspect their vaults. 'See, Otto, it is all here. Come, you can even put your own lock on the door ...'. That way the Germans figure this pile of gold is safe but it still remains in British hands.

The Americans are next - they won't even let themselves inspect the vaults.

The French are first as they look the likeliest to, spend, uh, lose the gold. Any country that already imposes an 85% tax rate on annoying French actors strikes me to be a little too desperate for cash. Maybe Germany feels the same way?

MillionDollarBoner_'s picture

Why 100% of their French gold?


France has no choice - hand over the gold or its tanks up the Champs Elysee before you can say "Kamerad"

The UK and USA...well, we know how that one usually works out ;o)

No Euros please we're British's picture

The German's sent their girl Liz Saxe-Coburg Gotha to inspect the gold. It was on the telly the other week.

e_goldstein's picture

Because you can't get back what Gordon Brown already sold.

Inthemix96's picture

Right, so in seven years time, Germany will officialy hold 50% of its OWN gold inside German vaults?

Fuck off and talk sense my German friends.  Why?  Why not take it all back now?  Why wait 7 years?

My spidey sense is tingling here folks, 'cos we aint making it to 2020, I think we all understand that.  There is no fucking way I am logging on here day in day out for another 7 years to see this shit-show still going, bring the fucker down already for fucks sake.

IamtheREALmario's picture

"This gold was stored in US vaults for obvious reasons"

This much as least I get. Up until 1971 there was no point shipping physical gold around the world in exchange for dollars to settle accounts. Less so, now that dollars are digital. I suppose gold could be just as digital as dollars, eh?

Since 1971 it makes no sense for a country to store its gold in another country unless it is akin to MAD or two men holding the each others balls in their hand. Foreign countries cannot attack the dollar standard in fear of losing their gold.

France is obviously irrelevant.

Kim Jong-Il's picture

Reason for storage outside Germany = to keep out of Soviet hands in the event of war

forwardho's picture


Modern man has no sense or knowledge of history.

Do all forget the Fulda gap plan?

It was a real fear.

Kim Jong-Il's picture

Reason for storage outside Germany = to keep out of Soviet hands in the event of war

Antifederalist's picture

This establishes the precedent. They are asking for some gold back. It is a HUGE deal. The flow is now in the wrong direction for the fiat masters. Later they can ask for more.

Fiat masters should be very afraid.

Tradition my ass BEN. This shit is money, you are about to get schooled you fraudulent motherfucker.

Vlad Tepid's picture


I liked the part when you called him a fraudulent motherfucker.