Wednesday, February 11, 2015

where is germany's gold?


bloomberg |   Gold bugs around the world are winning unprecedented concessions from their governments, and gold is streaming out of 33 Liberty St. and across the Atlantic.
 
In May 2014, the Bank of Italy, which has the third-biggest gold reserves after the U.S. and Germany, ended years of secrecy by disclosing the locations of its holdings. Citing the German repatriations, the central bank said about half its gold is in Rome and most of the rest is beneath the New York Fed. Then in November, the Dutch central bank announced that it had secretly moved 122.5 tons of gold from New York to Amsterdam. In apparently just months, the Dutch had shipped almost 25 times the gold that Germany moved in all of 2013. “Beyond realising a more balanced distribution of the gold stock across the different locations, this may also have a positive effect on public confidence,” the Dutch bank said in its announcement. Soon after, the leader of France’s anti-euro, anti-immigration National Front party, Marine Le Pen, asked the Bank of France for an independent audit of its gold and to reveal any lending or financial commitments related to the reserves.

At the end of November, a referendum in Switzerland to repatriate some holdings failed but led the country’s central bank to disclose locations and amounts of its gold for the first time. Swiss politicians are pushing for more. “I want a clear inspection where you have a list of all the gold bars, where it’s written that it’s fine gold and only belongs to Switzerland,” says Lukas Reimann, a member of the Swiss parliament who led the referendum.

On Jan. 19, the Bundesbank delivered its own surprise, publishing a tally of its 2014 gold repatriations. During the year, the German central bank had shipped 85 tons from New York to Frankfurt, blowing away the mere 5 tons from 2013 and setting a pace at which the Bundesbank would easily meet its target of 300 tons returned by 2020.

Even if the world’s biggest central banks did explain away his gold bug speculations, Boehringer had triumphed. But for him, and his sense of order, the itch is never scratched. There were still 1,447 tons of German gold under Manhattan at year’s end, and he wants all of it back in Frankfurt. At the current rate it would take more than 30 years for all German gold stored abroad to return, he says.
And there’s this detail from the German announcement: “The Bundesbank took advantage of the transfer from New York to have roughly 50 tonnes of gold melted down and recast according to the London Good Delivery standard.” Bar lists were cross-checked with bar markings, the statement said. Spot checks found no irregularities. Yet any identifying trace of the original gold had been wiped out, the bars “now destroyed,” a freshly fired-up Boehringer says. Melted bars might not prove something’s rotten under Liberty Street, but the mere disclosure shows Boehringer is making a difference.