Germany Wants it’s Gold Back

The German central bank is planning a “phased relocation” of 300 tonnes (metric tons) of gold from New York to Frankfurt as well as an additional 374 tonnes from Paris to Frankfurt by 2020.  The reserves should end up looking like this:

• Frankfurt (31%, currently) 50% by Dec. 31, 2020
• New York (45%, currently) 37% by Dec. 31, 2020
• London 13% no change
• Paris (11%, currently) 0% by Dec. 31, 2020

And So It Begins…Germany To Commence Repatriating Gold From New York Fed

• In what could be a watershed moment for the price, provenance, and future of physical gold, not to mention the “stability” of the entire monetary regime based on rock solid, undisputed “faith and credit” in paper money, German Handelsblatt reports exclusively that the long suffering German gold, all official 3,396 tons of it, is about to be moved.

• Specifically, it is about to be partially moved out of the New York Fed, where the majority, or 45% of it is currently stored, as well as the entirety of the 11% of German gold held with the Banque de France, and repatriated back home to Buba in Frankfurt, where just 31% of it is held as of this moment. And while it is one thing for a “crazy, lunatic” dictator such as Hugo Chavez to pull his gold out of the Bank of England, it is something entirely different, and far less dismissible, when the bank with the second most official gold reserves in the world proceeds to formally pull some of its gold from the bank with the most.

• In brief: this is a momentous development, one which may signify that the regime of mutual assured and very much telegraphed – because if the central banks don’t have faith in one another, why should anyone else? – trust in central banks by other central banks is ending.

• Once the scramble to satisfy physical gold deliverable claims manifests itself in the market, you can’t help but wonder what will happen to the price of gold: both paper and physical?

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