Tuesday, January 7, 2014

Is Germany's Gold Housed in New York, Paris and London All Gone?

By JS Kim, Managing Director of SmartKnowledgeU (via ZeroHedge)

Here is a recent correspondence from our friend Lars Schall, an independent financial journalist, and the German Central Bank, the Deutsche Bundesbank, regarding the exact whereabouts and specifications of Germany’s national gold reserve. From the correspondence below, it appears that the US Central Bank had already leased out Germany’s gold reserves in prior years and no longer has it, as the gold bars the US Central Bankers returned to Germany last year were clearly not the same ones that Germany originally deposited with them. The questions Mr. Schall’s revelations now beg is (1) if the Banque de France and the Bank of England have Germany’s original gold as well; and (2) if the various Central Bankers are deliberately returning Germany’s gold on a painfully slow timeline because they have already leased out Germany’s gold into the open market in prior years, no longer hold it, and mustctherefore scrape together Germany's gold from the open market now.

Below is Mr. Schall’s inquiry to the Deutsche Bundesbank:

December 26, 2013
Dear Ladies and Gentlemen:
I am an independent financial journalist. In connection with the transfer of 37 tons of Bundesbank gold from New York to Germany, I came across the news that the bars were a melted before the transfer. May I kindly ask you for the following information:
Why were the bars melted at all? And why couldn’t that wait until the bars arrived in Frankfurt?
Kind regards,
Lars Schall
 

Below is the Bundesbank’s curious reply that is riddled with a lack of transparency:

January 3, 2014
Dear Mr. Schall:
Thank you for your enquiry.
At a press conference on the topic of Germany’s gold reserves on 16 January 2013, Executive Board member Carl-Ludwig Thiele presented the Deutsche Bundesbank’s new storage concept. In addition to the relocation of gold bars, this concept includes, amongst other things, measures to ensure that the specifications of the London Good Delivery (LGD) standard are met. You can find these specifications on Page 17 of the
following presentation:
Storage plan (new)
                 2012          2020
Frankfurt    31% ………… 50%
New York   45% ………… 37%
London      13% ………… 13%
Paris          11% …………  0%
Planned relocations:
– Phased relocation of 300 tonnes of gold from New York to Frankfurt.
– Phased relocation of 374 tonnes of gold from Paris to Frankfurt.
– Achieve LGD standard, where this is not already the case.
You can find the specifications for the London Good Delivery (LGD) standard at the following address:
http://www.lbma.org.uk/pages/index.cfm?page_id=27
In cases where these specifications were not already met, the Bundesbank had these original gold bars melted down and recast in order to meet this standard. This was achieved without any difficulties. Please understand that in order to ensure the security of the gold transports and our employees, the Bundesbank is unable to provide you with any further information.
Yours sincerely,
DEUTSCHE BUNDESBANK
Communication
Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Tel.: +49 69 9566×3511 or 3512

And below are questions raised by Peter Boehringer, president of German Precious Metal Society and co-initiator of the Repatriate our Gold campaign, to the opacity and oddities of the Bundesbank’s response:

Why does the Bundesbank continue to avoid transparency regarding Germany’s gold holdings?

Why not just come up with easy-to-deliver facts instead of repeated rhetoric about an alleged remelting of gold bars in the United States that even people with some knowledge of the gold industry and some common sense fail to understand?

There is no reason why the original gold bars acquired in the 1950s and 1960s (if they ever existed at all, which has never been proven, as by publication of bar lists or photos) had to be melted down and recast into LGD-compliant bars in New York as opposed to Frankfurt. Nor is there reason why all this had to be done in obscurity without any published report of the recasting.

The public is still waiting for answers to crucial questions like these:

– What kind of gold bars were melted? Original material from the 1950s and ’60s?
– How can the Bundesbank hint in its press release that some of the old bars already met the LGD specifications when those specifications were not defined and made a standard for central bank bars until 1979?

Why has the Bundesbank not published a bar number list of the old bars?
How can there be security concerns about bars that no longer exist?
Why has the Bundesbank not published a bar number list of the newly cast
bars?
– Who exactly melted the bars? Where exactly was this melting performed? Is there a smelter at the Federal Reserve Bank of New York?
– Who witnessed the melting and recasting of the bars?
– Are there any reports on this in writing with a valid signature? By whom?
– And especially: Why was it deemed necessary to perform this action in the United States as opposed to Frankfurt or nearby Hanau, where there are some of the best facilities in the world for metal probing, melting, and recasting? Had these actions been performed in Germany in a fully transparent manner, it would have been so easy for the Bundesbank to dismiss all questions from “paranoid gold conspiracy theorists.”

The Bundesbank is just the custodian of Germany’s national gold, which is worth more than $125 billion. The Bundesbank owes the public full transparency in all these gold matters. That is, physical audits,
independently verified storage reports, and a publication of the full bar lists of all its gold in all national or international vaults. Despite having now had the excellent opportunity of this partial repatriation, the Bundesbank has again failed to produce any proof or indication that at least 37 tonnes (out of 1,500 tonnes of German gold at the New York Fed) still existed through 2013 in their original 1950s-’60s bar form. Instead, Germany is now owner of almost 3,000 LGD-compliant standard bars, which proves nothing and dismisses no allegations of decade-long manipulation of the gold price.

It is still possible and even probable that the old German bars were lent into the market long ago or that they have multiple owners or are backing multiple gold exchange-traded fund derivatives. Of course the same holds for our remaining 120,000 bars at the New York Fed. The “repatriation” of a mere 1.5 percent of Germany’s foreign gold holdings and the supposed melting and recasting of the original gold bars do not prove the continued existence of Germany’s remaining gold holdings supposedly vaulted at the New York Fed. The Bundesbank has missed a great opportunity to bring transparency to Germany’s gold reserves. What a pity. And at its current speed the Bundesbank will require 60 years to accomplish the repatriation mission forced upon it by an impatient public. What a shame.

The initiators of the Repatriate Our Gold campaign  are considering legal action based on freedom-of-information law against the Bundesbank and possibly also against its auditors, who have certified the Bundesbank’s balance sheet without having adequately considered the risks associated with a non-transparent gold hoard, which is the only asset of substance on the Bundesbank’s books. (Ninety percent of those assets are mere paper claims, many of dubious quality, like “Target 2? claims.)

Our objective remains to achieve the publication of all gold bar lists and full transparency involving Germany’s gold. The German people are entitled to have all information about their golden property. And the American people have a right to know as well. After all, it is the U.S. Federal Reserve System and the U.S. Treasury Department that have been obscuring their gold holdings and foreign gold holdings since the last proper audit in 1953.

11 comments:

  1. Tuesday, January 7, 2014
    Precious Metals Intervention In The Extreme - Let's Call It What It Is

    Anyone who calls what is happening a "flash crash" or hedges on their assertion of "possible" direct intervention is either completely ignorant of the facts or they write their commentary in fear of public ridicule and doubt from other intellectual hedgers. It is what it is: a nuclear currency war rooted in the historical intervention of the gold market by the Federal Reserve and the U.S. Treasury.

    In the last two days, 26+ tonnes was delivered on the Shanghai Gold Exchange. The enormous physical off-take in China is a freight train w/out brakes.

    http://truthingold.blogspot.com/2014/01/precious-metals-intervention-in-extreme.html

    ReplyDelete
  2. Why Does It Even Matter?

    So here we are today. Yes, gold has been begrudgingly revalued higher but what once was a 1 to 1 relationship has become a 100 to 1 relationship as ounces (tons) have been pledged as collateral and then re-pledged many times over. Notice I used the word “collateral” here? Collateral is “backing” or “foundation” as security or guarantee if you will for loans extended. The problem is that this same and singular collateral has been used many many times over. Clear title and ownership cannot any longer be determined. No problem though…because it has worked and is still working right?

    The answer is “yes” it has and still is working but would it? Will it work if this 100 to 1 re hypothecation was commonly known? Would it work if it was commonly known that the vaults were emptied in an effort to suppress the price of gold? Maybe it could or would here in the US because the population has been brainwashed for so long that we no longer understand the definition of money. Will it work with foreigners? Do you really believe that the Chinese will continue to send us fabricated widgets in exchange for pieces of paper just because they have pictures of past U.S. presidents on them?

    http://blog.milesfranklin.com/why-does-it-even-matter

    ReplyDelete
  3. Chinese FX expert says gold is a currency that China must dominate

    Gold researcher and GATA consultant Koos Jansen today discloses a speech given to a gold conference in Beijing last year by Tan Ya Ling, president of the China Foreign Exchange Investment Research Institute, arguing that gold is a currency and and potentially the world reserve currency and that China needs to dominate the world gold market.

    http://www.gata.org/node/13469

    ReplyDelete
  4. "It is still possible and even probable that the old German bars were lent into the market long ago or that they have multiple owners or are backing multiple gold exchange-traded fund derivatives."

    It wouldn't surprise me if this were true. If is, then the attempt to obfuscate the origin of the German gold bars could indicate a fear of being caught at funny business by paper trail. It got me to thinking about whether forensic accounting of publicly available documentation could be used to demonstrate specific examples of funny business.
    Some questions that, if they could be answered, could bring us a smoking gun:
    If there were to be multiple contracts sold for the same gold, what would the mechanics of this crime actually look like? If one were to think like a criminal, at what specific points in the gold trading process could it occur? Could narratives be written describing how the crime could be enacted?

    What kind of various publicly available records, specifically, exist for things like paper gold contracts which if, assembled as a patchwork and analyzed, could be used to demonstrate that particular bars are pledged multiple times?

    Computers are good at analyzing and graphing relationships. Does the intersection of the available information with the categories of potential bad actors produce an immediate smoking gun? If not, do the likely scenarios point to possible specific actors, methods, and artifacts that can be detected?

    ReplyDelete
  5. COMEX Needs 50+% More Registered Gold for February

    JP Morgan Stopped 96% of Notices in December
    10,157 December 2013 COMEX Gold future contracts stood for deliver on first notice day November 27th. By December 30th, the end of the contract month 64% or 6,493 delivery notices were issued and stopped. The remaining open interest was lost; possibly to cash settlements or rolled over to new, future dated contracts. JP Morgan house account stopped 6,254 or 96% of the delivery notices. Thus ownership of 625,400 ounces of gold in COMEX registered inventory was transferred to JP Morgan during December. CME Group reporting shows that HSBC, Bank of Nova Scotia, and Jefferies Bache were the largest issuers.

    For comparison, in December 2012 there were 3,253 delivery notices or 46% of the 6,999 contracts that stood for delivery on first notice day. The bar charts below show how deliveries and lost contracts progressed each day of the December contract month.

    JP Morgan Now Owns Most Registered COMEX Gold

    http://rikgreeninvestorforum.blogspot.com/2014/01/comex-needs-50-more-registered-gold-for.html

    ReplyDelete
  6. Germany's gold is gone. So is ours. We are a nation of debtors maintaining our illusion of prosperity with smoke, mirrors and threats. We will soon have to pay the piper.

    [You're not going to like it...]

    ReplyDelete
    Replies
    1. Bundesbank just changed the story on the melting of the bars AGAIN yesterday....now they say they melted them in Germany and not the US.

      Delete
  7. Here's what I would have done: Promise/lend/sell the gold for cash many times over, pocket the cash, delay and obfuscate as long as possible, enjoy life as long as possible, die and let your children inherit the cash but not the criminal consequences.

    ReplyDelete
    Replies
    1. Guess that would make you a piker...

      Delete
  8. "It is still possible and even probable that the old German bars were lent into the market long ago or that they have multiple owners or are backing multiple gold exchange-traded fund derivatives."

    ReplyDelete
  9. Chinese FX expert says gold is a currency that China must dominate

    Gold researcher and GATA consultant Koos Jansen today discloses a speech given to a gold conference in Beijing last year by Tan Ya Ling, president of the China Foreign Exchange Investment Research Institute, arguing that gold is a currency and and potentially the world reserve currency and that China needs to dominate the world gold market.

    ReplyDelete