21 January 2014

The Bundesbank & the Narrative of Central Bank Omnipotence

My post yesterday on the German gold repatriation got a lot of comments pro and con. GATA picked up on my post and said that I didn't seem to think that the secrecy around it implied that something was wrong (central bank secrecy and transparency deserves its own post). I also got people telling me that it was easy to ship all the gold over in one go and therefore that lack of doing so was proof there was no gold. Before I address these issues, I want to explain my post from a different angle, which may help in people understanding my point.

Unfortunately, I was late catching up on Ben Hunt's latest piece, which I would have used as my intro to yesterday's post as it mentions gold specifically in relation to the trust and central banking club point I attempted to make.

Ben observes that "the meaning of gold [within the mainstream, goldbugs have their own narratives] has shifted from an alternative store of value to insurance against Central Bank policy error. ... gold prices will go up on ANY news – even deflationary news – IF that news creates a worker bee perception that the queen bees are rattled by the news. And vice versa, gold will go down on ANY news – even inflationary news – IF that news improves the perception that global central banks are large and in charge."

Ben has noted in past articles that a new narrative has established itself: the Narrative of Central Bank Omnipotence, where central bankers use "communications as a policy tool, and this is what Yellen (and Draghi and Abe and everyone else in the club) will continue to do ... use public statements to play the Common Knowledge Game and drive market outcomes by proxy."

The Bundesbank is part of this club and if they are seen as distrusting another central bank then they open up questioning of the Narrative of Central Bank Omnipotence, and doing so undermine their own power as well. I cannot see why they would want to make themselves impotent.

Now while I believe that the German central bankers have drunk their own kool-aid and trust the US, or as Ben Hunt says, they have internalised their behavior, "falling into what Kant called a 'dogmatic slumber'", in does not actually matter to explaining why they are repatriating in an excessively languid manner. Even if the Germans do not trust the US and wish to get their gold back as soon as possible and even if it is all there, they would still drag out the repatriation . The reason is because to request it all immediately questions the Narrative of Central Bank Omnipotence.

Victor The Cleaner pointed me to an exchange he and Motely Fool had with some Zero Hedge commenters (paraphrased by me) which explains it in another way:

"What possible action could the Bundesbank have taken that would invite more notice and speculation. The only other is asking for everything immediately as it would show an extreme lack of trust at international level between some of the most powerful entities that exist. To others it would imply that the Bundesbank knows something they don't and perhaps that the Bundesbank expected an imminent collapse. That would have sent others scrambling for gold that would crash the gold market (and others) immediately. Even though the Bundesbank would get every ounce from the Fed, just this action of asking will break things."

So unfortunately for those looking for proof that the US doesn't have their or others' gold, the rate of German repatriation does not provide this proof as the German central bankers would act the same way whether the gold was there or not, or whether they trusted the US or not.

Now on to some of the other questions raised.

Shipment Logistics

Those who think Germany could put 300 tonnes in a big plane or warship and move it in one or a few days have been watching too many Die Hard movies. As I noted yesterday, Venezuela took 4 months to get its 160 tonnes. Do you think Hugo trusted the central bankers? Don't you think he wanted to get his gold ASAP? That would translate to around 8 months in German's case.

Alternatively, consider that an armoured truck can carry only a couple of tonnes or so of gold. From an insurance point of view you couldn't get coverage for more than that anyway. So 300 tonnes at 2 tonnes a day equals 150 working days or 7.5 months. Certainly you could do two trips a day without attracting attention, so 4 months, just like Venezuela.

Some may argue that you could use non-secure trucks with heavy security. Even so we are talking 20 tonnes or so maximum weight carry capacity per truck. That is 15 trucks. Hard to secure a convoy like that I think - Google maps tells me that the trip from the Fed to JKF is 20 miles and 30 minutes. OK, so we will shut down 20 miles of roads in busy New York for this convoy with military escort. Yes that will not attract any public attention or present a Die Hard-style security risk.

However, even if this was possible, we have an additional problem. Go and watch this National Geographic documentary on the Federal Reserve, the stuff on the gold vault is at the beginning. Note the following:

1. At best they could fit two armoured trucks in their dock. No room for a big rig - are they going to forklift the gold pallets into the truck sitting out in the open on the street?
2. Look at the rabbit warren of corridors and lifts. The lift would fit only 2 tonnes of gold per go.
3. Look at the checking off process for each bar.

JohnM in the comments to yesterday's post noted that Germany's gold in the Fed "consist of 82,857 according to the report bullion stored mostly in sealed containers with 50 bars, which are kept in four separate locked safe boxes. Part of it (6183 bar) stored on open shelves, therefore in a separate vault – the so-called gold chamber."

Even if we ignore the massive amount of time it would take to just pack the open shelves gold on to pallets and then check and seal the 82,857 bars (at 15 seconds to pick up and check off each bar it would take 43 days at 8 hours a day) and ignore the fact that the Fed probably doesn't have room to store 300 x 1 tonne pallets of gold ready to ship, it would still take say 5 minutes per pallet to get "ready to ship" gold pallets out of the Fed basement and loaded on to trucks. 1500 minutes is 25 hours or 7 days. Just to load. With no breaks.

While I'd like to think the above will put an end to the idea that Germany (or anyone else) can move hundreds of tonnes of gold in a few days, I'm not hopeful, because, you know, they would have got away with it in Die Hard if it wasn't for Bruce Willis.

Now I agree that 4 months or so is a lot faster than 7 years. But as argued above, just because Germany could do it quicker, doesn't mean they would want to.

Gold Pawning

An anonymous commenter noted that "The Bundesbank also objects to this notion for another reason. It says the gold is supposed to act as an emergency buffer. In the extreme situation of a currency collapse, the bankers say that the gold bars could easily and quickly be exchanged on location for pounds or dollars to pay urgent bills."

Here the Bundesbank is talking about pawning their gold, although central bankers like to call it "swapping" as it sounds a lot more dignified. I agree with the commenter that while London and the US are major gold trading centers, for the purposes of "dollar liquidity" Germany could record an ownership change in a swap by putting book entry into the name of the US or other central bank while the gold stayed in Germany. No different to the US changing the name on Germany's gold held with them to another central bank who is "temporarily" lending Germany some cash.

If you are planning on permanently selling your gold, then yes you may need to have it in a location with a lot of trading liquidity. Even so, it is bread and butter business of bullion banks to do location swaps. But for inter central bank swaps that is not necessary (especially given the swap will be unwound in the future and the gold becomes Germany's again).

I therefore don't really see any need for any country to hold gold in trading centers if all they are looking to do is use it for swaps.


Note the un-LBMA form in which the current gold is held in at the Fed. Given the Bundesbank has argued that they need gold in the US for possible future swaps, then that assumes that they could get a swap on this non-LBMA gold. Therefore the state of the gold is not relevant to swap needs and refining/recasting of the gold into LBMA standard bars is not justified on that basis.

Nor is there a need to refine/recast as an audit/checking process. There are many non destructive tests as well as random sample bar refinings that could be performed to ensure the purity and weight of the bars.

While it would be nice to have the gold in LBMA form, that would only really matter if you were intending to sell it. Even then, bullion banks are more than happy to buy non-LBMA bars (at a discount reflecting refining cost). I can see no point in refining now when there may never be any intention to sell. The Bundesbank was happy with non-LBMA bars in the Fed all these years, why can't the non-LBMA bars happily sit in Germany's vaults?

Bar List

Carl-Ludwig Thiele, Bundesbank Board Member, said that "we have at our disposal fully documented lists of the bars, and our partner central banks send us every year confirmation not only of the bars’ existence but also of their quality."

I see no reason why this bar list could not be made public without any location or other identification information of a security risk nature. Again, a bar list of weight and purity should be sufficient for swap, LBMA or non-LBMA.

In closing I would also direct readers to the following additional points made in a Bullion Vault article:
  • Bundesbank says the program only began in the autumn because contracts had to be arranged with shipping companies and refiners
  • Employees of the Bundesbank supervised the bars' removal from the New York Fed crossing those bar numbers off the vault's inventory lists
  • Converting non-LGD bars into market-acceptable form was done in Europe
  • Bundesbank agreed to accept non-LGD gold bars into its New York Fed account in the 1960s because the run on America's gold had depleted the Federal Reserve's stockpile of Good Delivery metal and the Fed compensated the Bundesbank for both the costs incurred from the melting process and the discrepancy in the weight of the bars.


  1. and to add:

    All goldbugs should be happy that only 5t were shipped and all those contradiction occured.
    What else would GATA & KWN have to write about all day if there werent?

    Let's assume Germany would have picked it up immediately, all the +2000t? Now that would be a storry: Lots of gold all over the place!

    The whole narrative of the "shortage" would be gone, a narrative of decades would have been destroyed, why would anybody be so dumb to buy gold in that case?

    So please, dear truthers, conspiratists, car-salemen, tin foil heads, nutjobs, be grateful that it happend this way, otherwise you would have been on the street the next day.

  2. So why are you still here Mr Advocado, when you think anybody would have to be dumb to buy gold?

    And note closely that central bankers do care about quality, unlike you.

  3. "So why are you still here Mr Advocado,"

    because personally I find gold to be one of the most interesting assets.

    "when you think anybody would have to be dumb to buy gold?"

    indeed, that's when I stopped further buying. Just like I stopped buying silver, once I noticed the nutjobs in silver.
    Will I buy ever again? Hopefully not, although I am tempted for the latest Perth Mint 25yrs. Kangaroo, at least to complete the collection :)

  4. Transporting 50 tonnes of gold in a time frame of a year is too difficult to organize. Really?

    How on earth are they able to do the same thing at LBMA every week? Are the roads to Heathrow blocked on a weekly basis when bars are transported from London vaults to Swiss refineries? Are the roads to Zurich Kloten blocked regularly to transport gold from the refineries to China?

    No. They are not. Neither would they be in New York. Secure transports are not THAT difficult to organize.

    IMHO, no excuse is better than a lousy one.

  5. Re: melting

    Here's an image of gold bars received by the Bundesbank. The image was shot when the bars were publicly inspected by the german authorities.


    The bars have a Johnson Matthey stamp in them. Melting of the gold received last year was thus done in the U.S. or Canada.

  6. OneEyedBug, could you please state the source of your picture.

  7. Helsingin Sanomat. The biggest newspaper in Finland.

  8. This discussion about how much gold that can be move in whatever size and the “logistic issues” is just a distraction. For example, from the information that I have seen, In the 3Q, Switzerland has imported 808 tons of gold in 2013, and exported 680 tons. It's doable, so let's not quibble about it.

    I agree that this is rapidly escalating into existential crisis of trust in the central banks and the monetary system in general. Gold (other precious metals and hard assets) assume a greater importance in wealth preservation when creation of massively more currency becomes the norm.

    And, let's face the facts, the CBs are creating the currency. We can argue that they create currency to sustain the system of government profligacy but this is not what I see as the CBs role. The move from hard (gold and silver) money to fiat currency has been led by these central banks on the generally accepted idea that they are RESPONSIBLE stewards of the monetary system. Their vaunted “independence” was part of the “leave us alone and we will do it right”. They sold themselves as having backbone, integrity and gravitas. Instead they increasingly look like snake oil salesman and I'm being CHARITABLE.

    This German repatriation is a symptom of the crisis in trust. The hubris of the CBs is on display. Five tons is an insult to my intelligence. If they had moved, say thirty tons, with a statement that this takes time, “logistics”, etc., they may have retained some semblance credibility and could have plausibly kicked the can down the road. It comes down to two main possibilities: 1) The US has the gold but is not going to release it and they don't care who claims ownership 2) The US doesn't have the gold (to what degree this is true is ULTRA TOP SECRET) and so they will not (can not) deliver it. There may be more possibilities.

    Increasingly, I see a situation where there are some CBs in the tent and some that are out of the tent. The one's in the tent are the Fed, BOE, BOJ and the European Central Bank (let's call this the WEST) to name a few. But it seems to me that the numbers outside the tent are very quietly growing. Now this may in quieter circumstance be a small point but in a situation where physical demand for gold outside the banking system is so strong the the US is limited to repatriating just 5 tons to Germany in ONE year, this starts to loom large.

    This brings me to another point. When does perception management by the WEST flounder due to reality caused by “Failure to Deliver”? This wilful blindness of the German central bankers (and others within the tent) to buttress a crumbling monetary system will reach an “OH SH!T” moment. The WEST is in a controlled retreat, but to where?

    My thinking is that the “where” will be some of the possibilities brought up by Tainter's “The Collapse of Complex Societies” and Taleb's “Antifragile”.

    Whatever the case, I believe that an increasing amount of your saved wealth should be shifted from “investments” to physical gold under your control.

  9. Maybe the time frame to transport is itself the distraction? For all anyone really knows (outside the club), the gold was already transferred or never will be transferred. It could all be a mirage for reasons yet unknown.

  10. The conclusion that the Bundesbank does not want to blow the cover off the Central Bank 'confidence' game is logical. Because it is not the German Central Bank that wanted to repatriate gold but rather the federal government. The Bundesbank was brought into the arrangement more or less kicking and screaming. Other sources indicate that only 5 tonnes have been shipped from the NY Fed thru 12/31/13. Not much, and as other posters have stated, 100's of tonnes have gone through Swiss refiners without any of the logistic issues cited in the article. The other 'red flag' in my view is the refusal of NY Fed officials to allow any German representative to perform a physical on-site inspection of their gold. What exactly is the security issue or logistics problem here? Perhaps the elevator will only hold one person at a time? Its like your neighbor borrowing your lawnmower. You ask for it back and he won't return it or let you into his garage. In that case logic would point you to the conclusion you mower is gone.

  11. Bron,

    I don't buy the argument that it would be logistically too difficult to repatriate the entire 1500 tonnes from New York in short order.

    When the Bundesbank announced the planned repatriation of 350 tonnes from New York over 7 years, at the same time, they published the following spreadsheet on their website:


    From it, you can see that they relocated about 950 tonnes from London to Frankfurt in 2000 and 2001 (without telling anyone for another decade, by the way).

    So we conclude that it can be done.

    As a side remark, with that spreadsheet published, there is very little secrecy about their gold remaining, isn't it? We see that they have closed all unallocated, leased and swapped positions, and that their gold is now fully allocated.

    Finally, when they request 350 tonnes of their gold over 7 years from the U.S. Treasury, why would they publish the spreadsheet from which everyone can see that they shipped 950 tonnes from London to Frankfurt in 2000/1?

    IMO there is only one answer: "Yes, we could ship everything within a few months, but we decided not to."

  12. A second remark.

    Above, you are quoting my exchange with MF, but you do so out of context which has twisted its meaning a bit.

    Here is how you ought to understand it:

    1) The U.S. have zero leverage over the German gold. They have no option other than to store it carefully and release it whenever requested. Why?

    Should the U.S. not follow the German request, the main pressure that Germany can exert is not (a) to sell some gold in order to defend the Euro - which the U.S. might prevent by not handing over the gold, but rather (b) to purchase additional gold in the market - which would in extremis kill the dollar instantly because it would force everyone else who is holding an excessive amount of dollars relative to their gold (and that's basically everyone outside the Euro area plus Switzerland plus the Gulf Arabs), to immediately covert from dollars to gold as well - if you panic, panic first.

    2) So, given that the U.S. has almost no leverage over the German gold, why would Germany choose the slow way (and at the same time show everyone the example from London, that it is in fact possible to ship it much more quickly)?

    IMO there is also only one possibility: remind everyone that the U.S. Treasury has a schizophrenic relationship to gold (think 1933, 1934, 1968, 1971) and to imply distrust, but without violating any diplomatic protocols. In particular, remind the Asians that the U.S. gold will not flow.


  13. VtC,
    I wonder, as long as the euro lasts, why should BB/Germany give a damm about their gold anyway?
    If in the EUdSSR all gains (currency appreciation/trade surplus) of a single nation are eaten up by the pigs, why care for any wealth or hard work at all anyway?
    So what that could mean as well: all gold withdrawn from Paris (socialist greediest pigs center of all). Withdraw from London (AFAIR didnt they even charge fees for storing the gold?), but leaving most of the offshore gold in the US... well, maybe that could be a sign that finally the BB wakes up and prepares for the euro exit.
    Greets, AD

  14. @OneEyedBug, I did a search and that image appears to be a stock picture used in early 2013 e.g.


    So unlikely to be an actual photo of Germany's Gold.

  15. Victor

    Let's say you are correct.

    Is there any chance that in carrying out such a threat they would lose their gold at the fed due to political reasons?

    If so, isn't it an empty threat, since they would not find that volume of gold on market anyway, and the $imfs is doomed regardless?


    Motley Fool ( plus e apparently)

  16. MF,

    I think I learnt the following from FOFOA, or at least at his blog. Around 1979 when there was the revolution in Persia (now Iran), the U.S. blocked the Iranian foreign assets in NY, including the gold. Remember, Khomeini's people took the personnel at the U.S. embassy hostage.

    After the crisis had been resolved, the U.S. had to release the Iranian gold. This was at a time at which Khomeini was still in power.

    Question to everyone: Is the above correct? (And why do I think of "loco swaps" in this context?)


    So if the U.S. even return the gold after one party to a foreign civil war took the U.S. embassy personnel hostage, the international custodial arrangements are pretty sound, no?


  17. Victor

    I do not know my friend. I submit the world was a much different place even just 30 odd years ago. There was still some shards of integrity. These days I am not so certain.


  18. OneEyedBug,

    Never said 50 tonnes in a year is too difficult. It is entirely reasonable.

    As to your other point about the LBMA, note that there is a difference between moving large amounts of gold from many vaults to many destinations and moving a single large amount from one vault to one destination.

    The bar image the newspaper used came from the Bundesbank press conference in 2012 I believe where they showed some of their existing bars and the testing of them.

  19. JohnM,

    I'm not sure I agree with the comment that this "is rapidly escalating into existential crisis of trust in the central banks and the monetary system in general"

    Maybe within goldbug circles or even central bankers, but certainly none of this has penetrated the mainstream.

    While Germany's actions may not have credibility within goldbug circles, we are far more knowledgable than the mainstream.

    Germany's statements and the reporting of 37t has come back is probably all the mainstream has digested. They don't know about the 5t/32t etc etc. It may be enough to make them feel everything is OK.

    An open question to our German readers - how do you think this repatriation is perceived by the average German?

  20. Victor,

    660t was moved from 1999 to 2000, which is in line with the Venezula move or about 3 tonnes per working day.

    If by "short order" you mean "a few months" then I disagree because you are not addressing any of the specific issues (bars not on pallets, loading dock restrictions etc etc) I raised in relation to German's gold at the Fed.

    660t in one year does not equal 1500t in a few months.

    As to the exchanged with MF, I was aware of the "leverage over the US" aspect but did not want to introduce that as is was not relevant to the specific point about the message taking all of the gold would send.

    Yes it was out of context but I think that section and its point, can stand on its own.

    Re your point about implying distrust, I can see that as valid, but what I would say is maybe it is a good example of a dog whistle - to central banker insiders it has a distrust message but to average mainstream doesn't imply distrust (no rush). That is far more subtle than having a warship arrive in New York.

  21. Bron,
    only people interested in gold pay attention to news re gold. The rest is too poor or have no clues.

    As to how "Germany" would react in case it were robbed of its gold, well, most of you here have very poor background as to its status vs USA. You seem to forget that G is still occupied, the MSM is extremely pro transatlantic and the guv is just as bad as in USA.

    Extracts from Zbigniew Brzezinski:
    The Grand Chessboard. American Primacy and its Geostrategic Imperatives, New York 1997, pp. 68–86

  22. @Bron,

    re: Johnson Matthey bars.

    Apparently you're right. The article I referred to has errors in it and the caption of the image (which states that the image was shot in Frankfurt on December 2013) may well be one of them.


    Lesson learned: trust no info unless it has been double-checked from independent sources.

  23. "An open question to our German readers - how do you think this repatriation is perceived by the average German?"

    Well, Bron, it’s got a good beat and you can dance to it ;)

    No, seriously, it is hard to tell. Sure, it is a MSM headline you can sell for a couple of days to the public. Just like when a german became pope, the sheeple have been fed "we are pope" and danced to it (even if they werent katholic). Besides that I think without MSM the majority does not really care. The public is used to it, that they cut of their testicles since WWII and that they have to bear with any kind of situation or abasement, regardless of the disadvantages for Germany, since "we are guilty forever" and any kind of victim can not be great enough.
    On the other hand the phrase "our gold" is somehow still rooted in the back of their minds of the german people. Hell knows why, since it is not "their" gold, it is the gold of the people that hold it in their hands, but not "the people".
    IMHO if you tell the people: Your gold is save, it is stored somewhere savely on the moon, they would be happy with that, but if you tell them: Upps, we sold the gold to bail out some PIGS, you know, we have to show some solidarity.... I guess they would be kind of angry, but still bear with it, as long as you tell them it is for solidarity and for repayment of the guilt. Nobody would never ever stand up in public to question such reasoning. It is some unwritten law of the MSM to destroy any person that would point out to finally claim some selfinterst for Germany.
    Greets, AD

  24. it would have been real funny if France had only given Germany about 100 oz of gold.

    and when Germany asks where is the rest, France can just tell them about the difficulties, etc, or transporting large amounts of gold.

    wonder what Germany would have said then?

  25. Bron,

    After Lehman some german goldbugs started to discuss in forums if Germany's gold reserves are really save in Fed vaults.

    These people initiated "Get our gold home" subscriber list sent to Bundestag and brought the current setup into the newspapers for more public awareness.

    Bundesbank's argument to rely into Fed statements was so weak that Bundesrechnungshof, who is in charge to look after bad financial behavior in public organizations, asked Bundesbank to review its policy.

    As a result Bundesbank and government facing elections in 2013 had to provide in 2012 the outlook of at least some small steps to calm the people down.

    Still 50% of Germany's gold reserves in London and New York vaults by the end of 2020 was the outcome.

    But Bundesbank did not present a linear year-by-year plan with 37,5 tons in each year from the Fed and nearly 47 tons from Paris.

    Therefore German people accepted 5+32 tons in 2013 "due to logistics and security reasons in the starting phase".

    But the announcement presented a couple of days ago that only 30-50 tons will be delivered in 2014, which is less than expected from Paris alone, will restart public discussion in the newspapers as European Parliament election in May is coming closer.

  26. @GermanGoldbug

    "As a result Bundesbank and government facing elections in 2013 had to provide in 2012 the outlook of at least some small steps to calm the people down."
    is maybe some tin foil head goldbug wet dream in some weirdo forums, but besides that, just plain outright bullshit.
    All that happend was that some nutty politians jumped the populist train to travel with the BILD newspaper to the NY-FED "let me in to see our gold" in order to have their martyr picture on the front page.
    Oh, by the way, that populist martyr has a big mouth, but still voted for basically everything that TPTB wanted: Syria, ESM, EFSF, Bail-out-the-world....

  27. AD is completely right.
    German guv is not much more than a puppet guv not unlikely those occupied by the USSA.

  28. AD

    You should think about your style of communication. Even in an anonymous forum. As something happened it is not a dream anymore.

    Regarding Philipp Missfelder who raised the question if Germany should get all gold reserves back from NY and London we have different views.
    He voted in some topics as his party recommended to do and where his CDU party has no official guideline he stated his personal opinion.

    As mentioned in the article the priority is not to get the gold back as soon as possible, as this would destroy confidence and might lead to a financial system crash. The Bundesbank has to balance the different interests of getting the gold back while stabilizing also the FIAT paper money system.

  29. "He voted in some topics as his party recommended to do..."
    a behaviour which is something I would call a brownnoser, how do you call that? Does not really add to his credibilty?

    "...and where his CDU party has no official guideline he stated his personal opinion."
    doesnt make him more credible, when these "personal opinions" arent any better.

    Let me check from the link, for what he voted:
    He basically voted for any kind of military action possible for the german army and any kind of weapons exports possible. Oh boy, when it comes to guns, you can count on his vote, regardless who's being killed.
    He voted for absolutely all bail-outs of whomever over the last three years.
    He voted for all EFSF, ESM whatever actions over the last three years.
    He voted against public referendums.

    And as a funny side note for all libertarian readers: He voted against marriage of homosexual people.

    But sure besides all of this, really nice dude and I take his efforts regarding "german gold" of cause serious and honest.

  30. The Germans do not need to hurry, as the gold is safe in America, for now. Their announcement merely exerts subtle pressure on America.

    However, they must see which way the wind is blowing in America (towards a totalitarian, civil war period) as its empire dies. Recent spying revelations have confirmed the shadow powers that are already running America.

    WW2 proved that it can be a tricky job to get your gold back if stolen by madmen(ask the Czechs).
    The Fed won't survive the troubles to come. The US treasury, in extremis, will do what Germany did during WW2, spend any gold it needs to to keep its imports flowing. Once its been spent, tough luck Germany.

    But Germany knows that this period is still 15+ years ago, and hence, no need to rush. Yet.

  31. Thanks for that info on BILD trip. I think the nature of this trip has been lost in translation with most thinking this was an official trip and that the Fed denied a valid request from the Bundesbank to view their gold when in fact it was a publicity stunt.

  32. The denial of BB officials to view German gold in the Fed vaults is indeed problematic.

    Bron quoted from an article in Das Spiegel that visitors to the NY Fed were taken down on a tour of the gold vault; and possibly this is offered as evidence that gold is present in the vault.

    There's a big difference however in a distant view of shiny yellow bricks arranged on their side behind iron bars seen by visitors and proof of real gold.

    I liken the visitors tour to something like dinosaur models at a museum. There is nothing to suggest that they are anything but a display. It's not hard to arrange base metal bricks painted or plated in gold giving the appearance of a vault full of gold.

    Obviously a bank official getting behind the bars and examining the display would give the game away.

    A mummer's show IMO.

  33. Just one question: How long did it take for Germany to move its 674 tons from Germany to the USA? I doubt very much that it took 7 years to move a small fraction of it. I bet it took a few months but I cannot find the answer on the internet - that information must be some where though. If it took years, then your analysis is correct. Secondly, if the Federal Reserve is simply a safety deposit box then no one should be shocked by Germany withdrawing it's own stuff from the box anymore than if I have a personal safety deposit box at my local bank and go there and take everything out.