- Published on Saturday, 19 January 2013 11:53
The news of Germany's intention to repatriate gold from France and the US has been played down in the media. Given that it is going to occur over a period of seven years, the repatriation may be of little significance. The official narrative suggests since the end of the Cold War (1991) there is no longer need to keep German gold as far away as possible from the former USSR.
But the Bundesbank's forced admission that some 69% of gold is held outside the country has increased suspicions among German politicians. Central banks which have custody of the gold (UK, France and Federal Bank of New York) have denied access to view the gold and questions are being raised:
…Several German politicians have … voiced unease. Philipp Missfelder, a leading lawmaker from Chancellor Angela Merkel’s center-right party, has asked the Bundesbank for the right to view the gold bars in Paris and London, but the central bank has denied the request, citing the lack of visitor rooms in those facilities, German daily Bild reported.
Given the growing political unease about the issue and the pressure from auditors, the central bank decided last month [September] to repatriate some 50 tons of gold in each of the three coming years from New York to its headquarters in Frankfurt for ‘‘thorough examinations’’ regarding weight and quality, the report revealed.
…Several passages of the auditors’ report were blackened out in the copy shared with lawmakers, citing the Bundesbank’s concerns that they could compromise secrets involving the central banks storing the gold.
The report said that the gold pile in London has fallen ‘‘below 500 tons’’ due to recent sales and repatriations, but it did not specify how much gold was held in the U.S. and in France. German media have widely reported that some 1,500 tons — almost half of the total reserves — are stored in New York.
( Associated Press, Oct 22, 2012, emphasis added )
There is also concern that if every country repatriated their gold from the NY Federal Reserve Bank, would there be sufficient held to meet all the demands? There are some who cite these doubts as heralding the demise of the US dollar as the primary global reserve currency.
Frenzy in the Gold Market: The Repatriation of Germany’s Post World War II Gold Reserves
By Prof Michel Chossudovsky
Uncertainty provides opportunity for speculation in the gold market and price volatility is expected to increase. It is worth remembering that much gold speculation takes place via the medium of Exchange Traded Funds (ETFs) which are ostensibly backed by real gold. Questions may also arise as to whether the volume of ETF trading is supported by real or illusory gold?
This is occurring against a backdrop of escalating tensions around the world: demonstrators in Amman, Jordan, are calling for faster transition to democratic rule than King Abdullah has agreed while the western backed civil war rages in Syria; French intervention in Mali has spilled over into Algeria threatening the stability of the Sahel and North Africa; newly elected Japanese prime minister, Shinzo Abe, is a belligerent voice in the east adding to growing animosity with China.
Gold is the traditional refuge in times of crisis and its price is likely to reflect growing global unease.