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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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Thu, 01/17/2013 - 09:42 | Link to Comment AlphaHunter001
AlphaHunter001's picture

 

It would be absolutely foolish for anyone to transfer that much gold in ONE move!

 

Of course the prudent course of action is a slow move back, all of which should be under tight security... I'm surprised they aren't moving at a slower pace to ensure security.

 

Second of all, who cares. It's only $180 billion dollars worth. It's a trivial amount when the German GDP is over $3.6 trillion.

Thu, 01/17/2013 - 11:56 | Link to Comment Orange Pekoe
Orange Pekoe's picture

Bank run!

Thu, 01/17/2013 - 12:29 | Link to Comment lakecity55
lakecity55's picture

Sorry, Krauts, but Sandy flooded our account books and all the ink ran off. It will take several years to locate your gold and get it back to you. Your patience is appreciated.

---Ben

Fri, 01/18/2013 - 14:35 | Link to Comment Factotum
Factotum's picture

Seriously???  300 tons of gold.   Do you think that you just call up UPS or the post office?

A semi can carry 40 tons, as can a large cargo aircraft.   You gonna ship 40 tons of gold via aircraft, and hope to get insurance on that billion dollars worth of cargo?  Or maybe just cross your fingers and hope that the aircraft does not crash.

You could put it on a ship.   Boy would that be a tempting target.   Or the ship could just sink.  Accidents happen.  So all you smart asses who have all the answers.  How would you move a ton of gold from the Fed to one of the nearby airports or shipping docks.   And do not forget that you have to co-ordinate with the Germans on the other hand who have to receive and transport.  And each ton, a cube about 40 cm on a side --- kinda small,  represents 50 million dollars so it will be a tempting target.

 

I doubt that most of you who have commented could plan anything more complicated than serving a microwave pizza, or on a longer time frame than two weeks (End of playoffs to superbowl)

Fri, 01/18/2013 - 14:36 | Link to Comment Factotum
Factotum's picture

Seriously???  300 tons of gold.   Do you think that you just call up UPS or the post office?

A semi can carry 40 tons, as can a large cargo aircraft.   You gonna ship 40 tons of gold via aircraft, and hope to get insurance on that billion dollars worth of cargo?  Or maybe just cross your fingers and hope that the aircraft does not crash.

You could put it on a ship.   Boy would that be a tempting target.   Or the ship could just sink.  Accidents happen.  So all you smart asses who have all the answers.  How would you move a ton of gold from the Fed to one of the nearby airports or shipping docks.   And do not forget that you have to co-ordinate with the Germans on the other hand who have to receive and transport.  And each ton, a cube about 40 cm on a side --- kinda small,  represents 50 million dollars so it will be a tempting target.

 

I doubt that most of you who have commented could plan anything more complicated than serving a microwave pizza, or on a longer time frame than two weeks (End of playoffs to superbowl)

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