On January 16, 2013, Germany’s central bank, the Bundesbank, said it would ship back home all 374 tonnes it had stored with the Banque de France in Paris, as well as 300 tonnes held in Manhattan by the U.S. Federal Reserve, by 2020.
Fast forward a year and the Germans have managed to bring home a paltry 37 tonnes of gold.
And a mere five tonnes of that came from the U.S., the rest from Paris. The Fed holds 45% of the total 3,396 tonnes of German gold.
Needless to say this prompted renewed questions about whether Germany’s gold still exists in those Manhattan vaults or whether it has been melted down, leased or even sold. At the time of the original Bundesbank announcement, there were rumours that Germany wanted its gold back because the Fed refused German officials a viewing of the bullion a couple of months earlier.
The rather flimsy reasons supplied by German officials to Die Welt am Sonntag why only five tonnes have been repatriated from America won’t satisfy the conspiracy theorists who maintain there is no gold in U.S. vaults:
“The Bundesbank explained by saying that the transport from Paris was simpler and therefore was able to start up quickly.”
Another explanation was that the gold held by the Fed on the Bundesbank’s behalf in the U.S. was non-standard size and shape:
“The bullion stored in Paris possesses the elongated shape with bevelled edges of the “London Good Delivery” standard. The bars in the basement of the Fed, on the other hand, have a previously common form. They will need to be remelted. And the capacity of smelters is just limited.”
The inability to move the bullion also occurred despite Germany enlisting the help of the Bank for International Settlements, the central bank of central banks, which is in the business of leasing hundreds of tonnes of bullion each year.
At the time of the initial announcement Bill Gross of Pimco, the world’s largest money manager, summed up the situation in a tweet, which today appears even more prescient:
@PIMCO Gross: Report claims Germany moving gold from NY/Paris back to Frankfurt. Central banks don’t trust each other?
In November 2011, Venezuela repatriated some 180 tonnes of gold held in vaults in London and elsewhere to store it with the Caracas central bank under orders from late president Hugo Chavez.
Reprinted by permission of MINING.com