It Will Take The Fed Seven Years To Deliver 300 Tons Of German Gold

Tyler Durden's picture


With the market yet another algo-controlled snoozer, programmed to close the S&P just green (as otherwise confidence in central planning may fail), the key things we learned today are as follows:

Obama proposed 23 "gun controling" executive actions, which do little to actually control guns - that part falls to Congress, where the proposal will be promptly killed - but which will add some $4.5 billion to US spending, and which will "push for further action on his health care law, including insisting on the kind of mental health coverage states must provide under their Medicaid programs."

The breakdown of the spending is as follows, per Weekly Standard:

  • $4 billion for the president’s proposal “to help keep 15,000 cops on the streets in cities and towns across the country.” (That is roughly $266,000 per police officer.)
  • $20 million to “give states stronger incentives to make [relevant] data available [for background checks] … “$50 million for this purpose in FY2014”
  • “$14 million to help train 14,000 more police officers and other public and private personnel to respond to active shooter situations.”
  • “$10 million for the Centers for Disease Control to conduct further research, including investigating the relationship between video games, media images, and violence.”
  • $20 million to expand the National Violent Death Reporting System.
  • $150 million to “put up to 1,000 new school resource officers and school counselors on the job.”

What can one say: politics, fully, theatrically and embarrassingly "endorsed" by the children sitting behind the president.

* * *

But the biggest news of the day comes from the official Buba announcement that, in its official capacity as a prudent central bank, it - as first of many - is looking to repatriate some 300 tons of gold from the New York Fed. That, however, is not today's news - that was Monday's news.

What is news is that courtesy of the supplied calendar of events in the Buba statement, it will take the Fed some seven years to procure Germany's 300 tons of gold. This is the same Fed that, in its own words, holds some "216 million troy ounces of gold" or some 6720 tons, in its vault 80 feet below ground level.

Putting the above in perspective, the amount of gold that Germany will have to wait 7 years for is shown in red. The amount of gold the Fed supposedly holds, is shown in yellow with a shade of tungsten. Why it will take the Fed 7 years to part with an amount of gold that is less than 5% of its total holdings is anyone's guess...

unless of course, the bulk of the gold in the column on the right has been rehypothecated numerous times to serve as collateral for countless counterparties, and it is no longer clear just who own what to anyone.

* * *

We can only wonder how many centuries it will take the New York Fed to deliver all the gold held by third parties in its vault, once the demand notices start rushing in...

For all those curious how the Fed itself describes the gold vault and its contents, can read more in the pamphet below:


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Wed, 01/16/2013 - 18:47 | 3160016 Coldfire
Coldfire's picture

This is as bad as it looks. In terms of real money, the Fed is broke.

Wed, 01/16/2013 - 19:49 | 3160282 are we there yet
are we there yet's picture

The last US fed gold audit was all the way back in Eisenhower's administration. They have avoided it erer sence in vigorously lame ways ....... for a reason. It has been plundered by those with invisibility and power in an agency that has no acountability to the public.

Wed, 01/16/2013 - 18:48 | 3160018 reTARD
reTARD's picture

It takes time to mine this stuff! Tradition takes time.

Wed, 01/16/2013 - 18:50 | 3160026 yogibear
yogibear's picture

Ron Paul to Bernanke: "Is gold money?"

Well is it Princeton punk? Is it?

Wed, 01/16/2013 - 18:51 | 3160031 Super Broccoli
Super Broccoli's picture

what about we give the french gold to the germen ? oh no wait, the french already asked for their gold 40 years ago and we never gave them back ...

Wed, 01/16/2013 - 18:53 | 3160034 steve from virginia
steve from virginia's picture
"It Will Take The Fed Seven Years To Deliver 300 Tons Of German Gold ..."


First, the Fed has to take the SV Peking out of moth-balls.


Second, they have to hire and train a crew ... by sailing around Cape Horn.


Third ... sailing ships are very slow. Thanks for your patience!



Wed, 01/16/2013 - 18:52 | 3160035 news printer
news printer's picture


  1. it's to heavy and trucks may brake down,
  2. ship may sink
  3. plane may fall ?

May or may not; that is the question :p


Wed, 01/16/2013 - 18:54 | 3160042 q99x2
q99x2's picture

If they have to go through Blythe Masters they'll be lucky to get anything other than tungsten.

Wed, 01/16/2013 - 18:55 | 3160046 Pairadimes
Pairadimes's picture

The interesting thing to watch for is if vault employees who may have learned too much start disappearing.

Wed, 01/16/2013 - 18:55 | 3160048 Billy Shears
Billy Shears's picture

Then it's ours, I guess?

Wed, 01/16/2013 - 18:55 | 3160049 100pcDredge
100pcDredge's picture

What about platnum?

Wed, 01/16/2013 - 19:03 | 3160053 billsykes
billsykes's picture

The US is so 3rd world- we will store your gold, not hypothcate it but it will take us 7 years or 1820 business days (not inc. holidays) to deliver it. 

Broken down this is less than 6 big bars of gold a day (1000oz). 

America the worlds largest economy, with GDP of $14 Trillion and a population over 300m people can only best Barrick gold's production by 2x?

Barrick with a market cap. of $34 Billion and 20 thousand employees?


The lies, fort knox is just an mushroom farm.  Bottom line is they dont have it. Good.


So now they have to dip into the market and buy gold. And they have to buy twice what is being put out by the largest producer of gold in real physical. 


Let get physical in 2013! Gold Bitchez. 




Wed, 01/16/2013 - 18:56 | 3160058 Yen Cross
Yen Cross's picture

Confucius Say / Life is really simple,but we insist on making it really complicated...

Wed, 01/16/2013 - 18:57 | 3160060 Super Broccoli
Super Broccoli's picture

Oh i get it, it's probably just a shoe problem, look what wiki says about it :

Nearly 98% of the gold at the Federal Reserve Bank of New York is owned by the central banks of foreign nations.[9] The rest is owned by the United States and international organizations such as the IMF. The Federal Reserve Bank does not own the gold but serves as guardian of the precious metal, which it stores at no charge to the owners, but charging a $1.75 fee (in 2008) per bar to move the gold. Moving the bars requires special footwear for the staff, to protect their feet in the case that they drop a 28 pound bar on their feet.

Let's call Al Bundy !

Wed, 01/16/2013 - 19:05 | 3160087 Yen Cross
Yen Cross's picture

 I watch "pin heads" such as yourself , when I'm not postulating my future.  The Al Bundy comment shows promise.

   FWIW, people. What can't go up, usually goes down? Balloons come to mind.  I have seen this top heavy price action many times. (most recently in the yen crosses)

Wed, 01/16/2013 - 23:08 | 3160986 secret_sam
secret_sam's picture

A good point.  We should expect to see Au in 5% daily swings for at least a few days before the really important moves ever start.

Wed, 01/16/2013 - 19:40 | 3160228 WTFx10
WTFx10's picture

Where do the central banks get the money to buy the gold? Oh yeah the print it. Kill the banksters and take the gold?

Central banks don't own shit cause they stole it with paper.

"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks." John Dalberg Lord Acton

Wed, 01/16/2013 - 21:04 | 3160546 W74
W74's picture

Sheeeeeet, I didn't even get boots the first day of basic training because the contract workers passing out clothes quit at FOUR O CLOCK and I was one of the last thirty or so in line.

Wed, 01/16/2013 - 18:58 | 3160066 100pcDredge
100pcDredge's picture

And who is willing to give the French some free uranium, s'il vous plait?

Wed, 01/16/2013 - 21:43 | 3160674 DaveyJones
DaveyJones's picture

exactly and who just happens to have an energy system dependent on the stuff

Wed, 01/16/2013 - 19:00 | 3160072 Dre4dwolf
Dre4dwolf's picture

7 year? hahahaha thats funny, cause I could load the gold up onto a tanker and have it there by next month, so pretty much "we don't have the gold, uh try again in 7 years" Germany got played! first by Greece than by the USA ;P

Wed, 01/16/2013 - 19:01 | 3160074 The Proletariat
The Proletariat's picture

Dear Buba,

We apologize for the delay in your gold shipments.  Unfortunately, due to the hurricane that flooded the vault where your gold was stored, we are still efforting to gain access to the vault where your gold is located....this will probably take several years.  I'll keep you updated and we are working diligently in regards to your request for that barbaric relic.





Wed, 01/16/2013 - 19:05 | 3160083 grunk
grunk's picture

It's REALLY heavy, and the Fed only has one dolly.

Budget cuts, fiscal cliff and all the cutbacks.

Either that or someone ate all the gold. Or it's at the bottom of some lake.

Wed, 01/16/2013 - 19:06 | 3160090 stant
stant's picture

its only worth 42.222 dollars a oz to the fed

Wed, 01/16/2013 - 19:54 | 3160294 Savyindallas
Savyindallas's picture

Right  -just admit Nixon was wrong to go off the gold standard, revert back to 1971 and write them a check for $35 an ounce. What choice do they have -the Gold allegedley stored by the Fed is gone anyway  - storage fees ate it all up.  The storage firm of Goldman, Steinberg, Friedmann and Cohen has our gold. We will gladly, however, write them a check backed by federal reserve notes or the future slave labor of the American peasants.  

Wed, 01/16/2013 - 19:06 | 3160095 dunce
dunce's picture

Could it be that after France started demanding gold in the 70s and nixon stopped converting paper to gold that most of the gold was gone then? Is this a kind of fractional reserve warehouse operation?

Wed, 01/16/2013 - 19:26 | 3160179 InconvenientCou...
InconvenientCounterParty's picture

fictional reserve

Wed, 01/16/2013 - 19:10 | 3160102 Super Broccoli
Super Broccoli's picture

Dear IRS officers,

I hereby inform you that i have decided to pay 20% my 2013 income taxes over the next 7 years. Please be reasured i'll keep the remaining 80% safe for you.

Best regards

Thu, 01/17/2013 - 00:06 | 3160694 DaveyJones
DaveyJones's picture

dear taxpayer, we don't think it's safe. Don't you remember, we took your guns away in 2014?

Wed, 01/16/2013 - 19:09 | 3160109 Its_the_economy...
Its_the_economy_stupid's picture

Germany: Please present us with your plan for re=patriating our gold held by the Fed Reserve.

Ben: Shalom.

Germany: Shalom????

Wed, 01/16/2013 - 19:10 | 3160113 DeficitAlchemist
DeficitAlchemist's picture

Minor maths question, supposedly US had 45% of Germany's holdings (probably pulled from concentration fillings mind) and Germany has 3300+ tons... why are we just talking about 300 tons?

Wed, 01/16/2013 - 19:12 | 3160120 Super Broccoli
Super Broccoli's picture

because if it take Benny 7 years to give Germany 300 tons back it would take 35 years for the whole of it ...

Wed, 01/16/2013 - 20:30 | 3160424 Yen Cross
Yen Cross's picture

  Wrong! Stamps just get switched! ( Bernanke says this is our gold) BUBA shifts some deposits From another C.B. on paper and it's all good.

  If BUBA moved all their 2000+ tons of xau back it would take less than a week!

Wed, 01/16/2013 - 19:11 | 3160117 VonSalza
VonSalza's picture

We will send some u-boats to New York to speed up the process, gib uns heute unser GOLD Schnell you tungsten cowboys.

Wed, 01/16/2013 - 19:16 | 3160132 MissCellany
MissCellany's picture

All your golds are belong to us...

...for the next seven years at least!

Wed, 01/16/2013 - 19:18 | 3160141 Poor Grogman
Poor Grogman's picture

When your only tool is a foot (in mouh) every problem looks like a can that needs kicking.

Wed, 01/16/2013 - 19:21 | 3160161 jomama
jomama's picture

nyah nyah, what's germany gonna do about it?

Wed, 01/16/2013 - 19:22 | 3160162 Al Huxley
Al Huxley's picture

The Germans have small, slow boats that they are using to move the gold from NY to Frankfurt, and that is why it is going to take until 2020.  Certainly it has nothing, NOTHING, to do with whether or not the gold is actually there.

Wed, 01/16/2013 - 19:23 | 3160167 icanhasbailout
icanhasbailout's picture

Thank you for your money Germany!

Wed, 01/16/2013 - 19:32 | 3160199 Al Huxley
Al Huxley's picture

Bad news for you - you don't have claim to any of that gold, it's in the pockets (ok, private vaults) of the Fed's owners.  They're the ones who should be thanking Germany.

Wed, 01/16/2013 - 19:26 | 3160181 Pseudolus
Pseudolus's picture

Titanic 2 anybody?

(except this is going the other way over the Atlantic)

Thu, 01/17/2013 - 01:22 | 3161289 The Heart
The Heart's picture

What a fantastic idea. Now all we have to do is figure out how to get all the important bankers, big wall street financiers, and politicians of the day on to it for the free ride.

Wed, 01/16/2013 - 19:30 | 3160191 Kreditanstalt
Kreditanstalt's picture

"Few European nations could maintain their gold standards during World War I, however, as shipments of the metal frequently were embargoed."

Ah..., but that disingenuous statement is not the REAL reason for the demise of the gold standard, is it?  

Instead, what about "Due to the need to PRINT to fight a war, most European governments defaulted on their promise of gold convertibility in order to inflate their currencies."


Wed, 01/16/2013 - 19:44 | 3160227 steelrules
steelrules's picture


 LMFAO because Chavez is.


Wed, 01/16/2013 - 19:45 | 3160254 orangegeek
orangegeek's picture

"... Why it will take the Fed 7 years to part with an amount of gold that is less than 5% of its total holdings is anyone's guess.. ...."


Probably because the US guv is going to keep it.

Wed, 01/16/2013 - 19:46 | 3160260 Duke Dog
Duke Dog's picture

The folks here on ZH are smarter than this. It is obvious the Bundesbank is in on this bullshit with the Fed - otherwise they would have said "we want our gold and we want it fucking now", not in fucking 2020! Bullshit to appease the german people. It is very similar to what big 0 did today - people are breathing a big sigh of relief that Obama didn't use an EO to immediately ban ARs and high capacity mags. The end result is of his actions today will do much more damage to the 2nd Amendmend right for tens of millions of Americans once every single citizen that has ever been prescribed a "mood enhancing drug", which happens to be tens of millions, are forbidden to ever legally own a firearm. 

The worst of this bullshit is right around the corner - stay awake! jd.

Wed, 01/16/2013 - 19:48 | 3160269 enoch_root
enoch_root's picture

"Deep storage gold" ... 7 years is how long it takes to mine and refine.

Basically it is a default by any other name but that word is not mentioned in central banking anymore, where any amount of printing and appeals to latter day Keynesian "Economics" can do away with any and all defaults.

Wed, 01/16/2013 - 19:47 | 3160271 JohnGaltsChild
JohnGaltsChild's picture

The Fed has enough gold. They just need enough tungston to plate.

Wed, 01/16/2013 - 19:48 | 3160272 yogibear
yogibear's picture

The simple point of Germany wanting it's gold should be a raising a concern.

Wed, 01/16/2013 - 19:59 | 3160290 honestann
honestann's picture

Germany should say, "Fine.  The next $20-billion dollars any German company owes to any company in the USSA will instead be spent to purchase physical gold on the open market, and then put into our own gold vaults.  Once we have our 300 tons replaced, you may consider the contents of that empty vault to be entirely yours.  And BTW, up yours, liars!".

How long would it take the federal reserve to send them $20-billion dollars worth of fiat, fake, fraud, fiction, fantasy computer-bit-dollars?  Maybe 7 microseconds?

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