For more than a year, the story of the German gold reserve has continued. If someone had not heard, then Germany demanded that the United States and France return part of the reserves to it. The latter have been in storage at these countries for more than a dozen years. But how did they end up there? And why does the United States refuse to return what it rightfully does not belong to?
History reference
Of course, the Germans did not carry their gold in the United States. Just many years ago, back in the post-war period, it was acquired and left for storage there. The Bundesbank to this day considers such a policy reasonably reasonable. Why take gold away from major trading places? In the event that Germany’s gold stock needs to be quickly sold for foreign currency, it will be right at hand. Here is such a system. And not to say that only Germany holds such views.
How did the scandal begin?
About a year ago, several deputies of the Bundestag “unexpectedly” found out where Germany’s gold reserves are stored, namely 45%. The word “unexpectedly” is put in quotation marks because it causes not just surprise, but a grin at the very thought that politicians holding such high posts still did not know about it. Most likely, it was a populist step aimed at improving their own rating.
There is another version: the situation is so deadlocked that there was no point in keeping silent. It seems that this version is correct.
In general, the Germans, of course, have something to worry about. The reserve gold reserve of Germany is 3386 tons, the second largest in the world! In the first place, of course, is the United States of America , the presence of precious metal in the storage of which for some time has been questioned.
Give me a little bit
In March 2013, the Bundesbank did not request the United States to return the entire gold reserve, but only 300 tons, which are in the office of the Federal Reserve in New York.
Total German precious metal in the US is more than 1,500 tons. But naturally, not all of Germany’s gold reserves are stored there. It is known that 31% of the reserve is located in the homeland, away from major trade centers. Another 13% are in the Bank of England and 11% in the Bank of France. By the way, the German government plans to return all gold in Paris and 300 tons of precious metal from the USA until 2020. Why so little? Is it really just because of being driven far? It turns out that they will only sell their gold in New York and London? Not certainly in that way.
Low-quality ingots
Recently another story of the post-war years was made public. It turns out that after the Second World War a shipment of ingots of notorious low quality was delivered from the USA to England, which the central banks of these powers were well aware of. The documents found indicate that gold did not meet the so-called standard of London quality supply. Since the last delivery was intended for Germany at the expense of regular payments, they did not mention this. And the Germans, who at that moment were not up to the debate, accepted the “gold” without talking.
This is one known case. It remains a mystery how many low-quality gold deliveries to Germany were in general, and what is now actually stored in Germany?
Immediately I recall a different story from the recent past. The Chinese have discovered that some banks in the world store fake ingots that were made of tungsten and coated with gold. What was actually delivered to Germany, one can only guess. But back to London.
Secret export
We assumed that the Germans were going to trade gold in large trading centers such as London and New York. But it became known that Germany’s gold reserves “disappeared” from England: they exported it almost two-thirds. Until 2000, there were about 1.5 thousand tons, and by 2001 only 550 tons remained! Recall that the Germans wanted to export 300 tons from the United States in seven years, and then in just a year, almost 1,000 tons were easily taken? Is it all about the high cost of transportation?
Incidentally, the export of gold from England was almost "silent", there was no scandal. An interesting fact is that the gold reserves of Germany returned from there were remelted. It is alleged that this was done to increase its sample to the level of London quality supply. It is strange, because it is known that the Bank of England does not take anything else for storage. Maybe a poor delivery again? ..
American bubble
For several years now, everyone has been repeating that the US economy is undergoing a serious crisis. American foreign debt hangs on the verge of a fiscal cliff, but this world power continues to not only “stay afloat”, but also to control world politics and finances. What is the secret of such success? It is clear that much is tied to the dollar. Oil is sold and bought mainly for their currency. It is very beneficial for the United States, although recently there has been talk of using other currencies.
Another plus is the largest US gold reserve on the planet. Again, only in words. What then prevented the American authorities from satisfying Germany’s demands and returning a fraction of its gold?
At first, the Germans were refused at all. Then Germany expressed a desire to make sure that Germany’s gold reserves in the United States are safe and sound. As a result, one of the storages was opened, but no one was allowed inside. And it is not known what the German inspectors saw there. By the way, 5 tons of precious metal from the United States still managed to return. According to some German publications, several hundred thousand euros were spent on its transportation. The latter is again in doubt. If transportation is so expensive, then the 1,000 tons that were urgently returned from England should have depreciated this gold. Many will argue that it is farther to drive from the United States and, indeed, more expensive, because the costs are mainly spent on security. Fuel costs for ships or aircraft are hardly comparable.
But back to American gold. It turns out that experts who saw these ingots claim that they are marked with 2013. That is, these are not the ingots that were accepted for storage at all. Nothing is known about the quality of the latter either.
Complicated story
As you know, the American economy (let alone the world economy) rests on virtual (electronic) money. Every day, thousands of stockbrokers sell and buy stocks, currency, and precious metals. And if with the last two cases the situation is quite transparent, then with bonds it is a dark matter. People buy and resell bonds, and according to some reports, they have now accumulated in an amount twenty times greater than world GDP! And if one day you have to pay for these obligations?
According to this principle, a huge external debt of the United States appeared, because the printing press does not belong to the state. The government has to borrow money from a group of private banks for social reforms. Agree that to lend money to someone who will never give it back, banks will for the time being. At least this cannot go on for long.
There is an opinion that there is no more gold in the United States federal reserve (and this is in the country where Germany’s gold reserve is stored!). It was either pledged to debt or actively sold to keep the price of gold low. Confirmation of the first assumption is another scandal of the recent past.
When the ends don't meet
In 2011, one of the largest private gold custodians in the world was forced to sue to determine who actually owns the precious metal worth $ 850 million. This happened when several owners began to claim the same bullion. The latter, in turn, was led by the fact that during credit operations gold was re-pledged several times, and now it simply does not seem possible to determine its real owner. And all this despite the fact that the precious metal in storage is not subject to such operations.
All possible answers
Is Germany's gold reserves in the US? The question remains open. Legally, yes, but in fact ... Has the gold reserves of Germany disappeared? Most likely, he went into circulation. Gold is either mortgaged or sold. The Americans acted in the same way as any bank where you deposit your money. Suppose you put a large amount on your account today, and if you require it back in a couple of days, then most likely they will refuse you, explaining that you need to look for cash. Your money was put into circulation, for example, by giving someone a loan. Agree, the bank must also earn.
It is believed that the Americans do not want to give Germany gold because they fear that the Germans will leave the Eurozone. Germany intends to return the brand to circulation, providing it with its own gold. After all, the Germans have more than half of Europe. A good leash holds in the hands of the United States, is not it? It is good to have a political and economic ally, whose gold reserves you are in full control of.
Current situation
Officially, German authorities have denied reports that Germany is returning gold reserves from America. They say that the United States turned out to be a good partner and kept German gold for free (unlike England and France). Why is it for the Americans? One can only guess. They say that gold gives weight to their currency as a reserve. But wouldn’t it be better for the Germans if it was where the gold reserves of Germany provided such a currency as the euro?
But the Fed itself is not even trusted by the Americans. So the question of where Germany’s gold reserves are located remains open to this day.