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Bloomberg has a very interesting article on this topic also: https://www.bloomberg.com/news/features/2015-02-05/germany-s-gold-repatriation-activist-peter-boehr

Bloomberg has a very interesting article on this topic also: https://www.bloomberg.com/news/features/2015-02-05/germany-s-gold-repatriation-activist-peter-boehringer-gets-results https://www.bloomberg.com/news/features/2015-02-05/germany-s... Reading in between the lines, it seems as if a good chunk of gold has gone missing and there is an attempt by both sides to save face.

phyalow 9y ago
I'll just leave this here: http://www.zerohedge.com/news/2013-03-02/why-jpmorgans-gold-vault-largest-world-located-next-new-york-fed http://www.zerohedge.com/news/2013-03-02/why-jpmorgans-gold-...
- owenversteeg 9y ago
  As fascinating as that is, what I find to be even more interesting is that the total wealth in that insane concrete-bubble structure built to withstand atomic attack... is just over a billion USD. That's nothing in the scale of global wealth. And that's the largest gold vault on Earth. Pretty disappointing if you ask me. The entire gold vault (one million ounces of gold) is worth about a third of one percent of JPMorgan Chase's entire market capitalization.
  - dualogy 9y ago
    Well, that's a telling finding. It's just "telling" different conclusions about "global wealth", "JPMorgan's market capitalization", and gold's "fair" value to different minds ;) The only thing that's safe to assess about that bullion is that for all human intents and purposes, it'll outlast infinite numbers of generations, and the other stuff --- won't. That alone tells of the impossibility and futility of putting any sort of currency number on it, in fact, any figure will do --- $100 or $100k, whatever the world perceives will be equally valid and equally workable. Doubly so since "you can't eat it", it's in the final consequence not broadly "needed at any price" for industry, and the actual supply for its prime purpose (preserve some proxy of wealth through the generations) need not be increased, and every physical ounce above or below ground is in extremis already owned by someone.
    - Zigurd 9y ago
      Yes, it's about the symbolism. The value of gold does not track the total value of other assets, making it unable to be use as a currency substitute because you would need too much of it to do anything meaningful. Revealing a "problem" with US-held gold would be a blow to US currency dominance. The value of such a shift in global power is vastly more than the total value of gold on the planet, which is about 8-9 trillion US$. In other words, gold is nowhere near able to become a currency substitute, but it is potentially a bomb that can damage the dollar.
      - deleted 9y ago
        [deleted]
      - NotSammyHagar 9y ago
        Eventually there will be asteroid mining, and like we already have a sense of 1 trillion dollars worth of palladium in an asteroid, there will be 1 trillion dollars worth of new gold - which did cost a lot to get. Google claims the entire mined gold in the world's history is 8 trillion, but tons (ha) have been lost over time. Anyway, you get 12.5% more in that first shipment. Maybe it will be a 100 years from now. And then we find another and so forth. Will that cause a panic? Will anyone care?
        xyzzyz 9y ago
        If we find vast amounts of gold in asteroid, the price of gold will fall to just above the marginal cost of recovering that gold as long as it's lower than its current price -- this is some very basic economics. A good example to consider is aluminium. In early 1880s, the price of aluminium was around $10000 of today's dollars for kilogram -- actually the price of ounce made more sense, as you very rarely saw pieces of aluminium so large to weigh a kilogram back then. For example, the capstone for Washington Monument, weighing 9 kilograms, was the largest single piece of aluminium ever cast at that time. Then, in 1888, the modern process of aluminium was invented, and soon its price rapidly fell by orders of magnitude.
        9y ago
  - mannykannot 9y ago
    It certainly underscores the fact that gold is now a historical anachronism, economically speaking. Maybe what is going on here is just a step in the slow termination of that relationship, that has to be kept secret to stop it unraveling in a rush?
    - tonfa 9y ago
      I've always wondered: what would happen when most nations central bank's gold holding drop below say 20%? or 10%? Is there a cliff where gold as a store of value just starts crashing? Or would the fantasy continue for the non-institutional holders for a while?
      - pas 9y ago
        20% of what? Most central banks have foreign reserves ( https://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves https://en.wikipedia.org/wiki/List_of_countries_by_foreign-e... ) and and central banks' gold reserves are typically less than 1% of their reserves. So gold backing any currency is just a small part of all gold in existence (about 170 000 000 kg ~ 7T USD) For "all currency", the money supply is a lot (converted to USD): US M0 is 10T, UK 2.85T USD, Eurozone ~8T, Australia ~1.8T. And China, Japan, India and so on also has big monetary bases.
  - joering2 9y ago
    You miss the point. You CONVERTING gold into USD on a current value. But rest assured if one million ounces are rendered untouchable for period of 100 years due to radioactivity, you can bet your bottom dollar the price of gold (remaining stock) will sky rocket.
    - NotSammyHagar 9y ago
      Uhm, there will be other problems if someone nukes nyc.
  - iamben 9y ago
    The largest _private_ gold vault. The Federal Reserve Bank of New York is meant to be the largest (there may be more in Swiss banks) holding about 7000 metric tons (apparently).
    - avar 9y ago
      Which is around $280 billion, or about 1.5% of us GDP.
      - nickjarboe 9y ago
        If the world decides to leave fiat currencies and return to gold, the value of gold will be much (10x?, 100x?) higher.
  - panarky 9y ago
    Exactly this. What is it about gold that triggers wild conspiracy theories from seemingly rational people?
- oxryly1 9y ago
  Off topic, but what is up with comments on zerohedge.com? Not this article necessarily, but so many of the articles on that site it seems the comments are just ridiculous alt-right bot armies arguing back and forth, peppered with links to obviously newly-invented sites touting crackpot theories.
  - gumby 9y ago
    Despite (or because of?) the fact that quite a surprisingly high number of my friends read zero hedge, I've always referred to it as a "gold standard flat-earther conspiracy site." I will say that, like a stopped clock, it generates something meaningful once in a while. But so does a Markov model.
    - pyvpx 9y ago
      it was slightly more useful in 2010 and before.
the_mitsuhiko 9y ago
> Reading in between the lines, it seems as if a good chunk of gold has gone missing and there is an attempt by both sides to save face. Or more likely: you do not want to cause any confusion in the markets. Ultimately the state of that gold has very little impact on the world as it moves. However any speculation about it, potentially can have impact (and most likely not positive one). When people in Europe started to question the state of that Gold Germany and other countries had to act in some form. So for as long as the general population does not further dig into the issue (or we have some sort of cataclysmic event) the gold does not matter all that much.
- Theodores 9y ago
  "The gold in the U.S. was earned by West Germany through trade surpluses in the 1950s and 1960s and was never moved out of the United States due to fear of invasion by the Soviet Union." https://en.wikipedia.org/wiki/Gold_repatriation https://en.wikipedia.org/wiki/Gold_repatriation So for a while the U.S. was saying to Germany 'thanks for those cars, machine tool and other goodies, have some gold, we will keep it in the vault safe until you need it...' and, after a while, got a bit lax about moving the piles of gold from one vault to the next. So it is not as if this gold got there due to the Germans prudently shipping it across the Atlantic for safe keeping, it is money that should have been paid in gold for goods exported by Germany to the USA. I think they were promised to be paid and no physical gold was ever moved or paid.
  - slv77 9y ago
    The US would be more than happy to pay back the Germans through exports of machine tools and cars and other goodies. I believe that German structural trade surpluses are an issue both inside and outside the Eurozone. Also after WWII the US had accumulated essentially all the worlds gold reserves leaving their currencies without backing. The alternative to the Bretton Woods agreement was the US gifting gold reserves.
erikb 9y ago
Ah that reminds me so much of Game of Thrones were this one dude builds all his power and businesses based on an empty vault and a promise of what is inside.
- brianwawok 9y ago
  Wasn't that movie only? I read book longer before but I never remembered the empty vault thing...
  - ciroduran 9y ago
    In the TV show there is Xaro Xhoan Daxos http://gameofthrones.wikia.com/wiki/Xaro_Xhoan_Daxos http://gameofthrones.wikia.com/wiki/Xaro_Xhoan_Daxos
    - brianwawok 9y ago
      Xaro was in the books, but his plot was totally different. At no point did he open a giant empty vault.
      - erikb 9y ago
        I seem to have forgotten that. Thanks for clearing it up!
- mannykannot 9y ago
  There have been some recent analogs in real life. Mostly in the tech. industry, but also in luxury real estate.
  - aswanson 9y ago
    I read that as theranos on the tech side. What real estate scam are you referencing?
mannykannot 9y ago
This puts me in mind of the rai stones of Yap, and particularly of one that was lost at sea, but which continued to be used in transactions because of a general agreement that it still existed and so its ownership could be recognized. I have lost track of the clearest version of this story that I have seen, but it is mentioned in the 'Transfers by Clearing' section here: http://www.wondermondo.com/Countries/Au/MicronesiaFS/Yap/RaiOfYap.htm http://www.wondermondo.com/Countries/Au/MicronesiaFS/Yap/Rai...
- mattnewton 9y ago
  I read about this in Felix Martin's Money: The Unauthorized Biography, which was quite good (in my uninformed opinion).
- slv77 9y ago
  One funny thought down these lines is that after 50+ years the gold in the vaults has been cold welded together. Gold is soft, malleable and heavy and after years maybe it's effectively a solid chunk of metal. Would explain the logistic challenges and the need to re-melt the bars if they had robbed chiseled apart.

phyalow 9y ago

I'll just leave this here: http://www.zerohedge.com/news/2013-03-02/why-jpmorgans-gold-vault-largest-world-located-next-new-york-fed http://www.zerohedge.com/news/2013-03-02/why-jpmorgans-gold-...

owenversteeg 9y ago
As fascinating as that is, what I find to be even more interesting is that the total wealth in that insane concrete-bubble structure built to withstand atomic attack... is just over a billion USD. That's nothing in the scale of global wealth. And that's the largest gold vault on Earth. Pretty disappointing if you ask me. The entire gold vault (one million ounces of gold) is worth about a third of one percent of JPMorgan Chase's entire market capitalization.
- dualogy 9y ago
  Well, that's a telling finding. It's just "telling" different conclusions about "global wealth", "JPMorgan's market capitalization", and gold's "fair" value to different minds ;) The only thing that's safe to assess about that bullion is that for all human intents and purposes, it'll outlast infinite numbers of generations, and the other stuff --- won't. That alone tells of the impossibility and futility of putting any sort of currency number on it, in fact, any figure will do --- $100 or $100k, whatever the world perceives will be equally valid and equally workable. Doubly so since "you can't eat it", it's in the final consequence not broadly "needed at any price" for industry, and the actual supply for its prime purpose (preserve some proxy of wealth through the generations) need not be increased, and every physical ounce above or below ground is in extremis already owned by someone.
  - Zigurd 9y ago
    Yes, it's about the symbolism. The value of gold does not track the total value of other assets, making it unable to be use as a currency substitute because you would need too much of it to do anything meaningful. Revealing a "problem" with US-held gold would be a blow to US currency dominance. The value of such a shift in global power is vastly more than the total value of gold on the planet, which is about 8-9 trillion US$. In other words, gold is nowhere near able to become a currency substitute, but it is potentially a bomb that can damage the dollar.
    - deleted 9y ago
      [deleted]
    - NotSammyHagar 9y ago
      Eventually there will be asteroid mining, and like we already have a sense of 1 trillion dollars worth of palladium in an asteroid, there will be 1 trillion dollars worth of new gold - which did cost a lot to get. Google claims the entire mined gold in the world's history is 8 trillion, but tons (ha) have been lost over time. Anyway, you get 12.5% more in that first shipment. Maybe it will be a 100 years from now. And then we find another and so forth. Will that cause a panic? Will anyone care?
      - xyzzyz 9y ago
        If we find vast amounts of gold in asteroid, the price of gold will fall to just above the marginal cost of recovering that gold as long as it's lower than its current price -- this is some very basic economics. A good example to consider is aluminium. In early 1880s, the price of aluminium was around $10000 of today's dollars for kilogram -- actually the price of ounce made more sense, as you very rarely saw pieces of aluminium so large to weigh a kilogram back then. For example, the capstone for Washington Monument, weighing 9 kilograms, was the largest single piece of aluminium ever cast at that time. Then, in 1888, the modern process of aluminium was invented, and soon its price rapidly fell by orders of magnitude.
        9y ago
- mannykannot 9y ago
  It certainly underscores the fact that gold is now a historical anachronism, economically speaking. Maybe what is going on here is just a step in the slow termination of that relationship, that has to be kept secret to stop it unraveling in a rush?
  - tonfa 9y ago
    I've always wondered: what would happen when most nations central bank's gold holding drop below say 20%? or 10%? Is there a cliff where gold as a store of value just starts crashing? Or would the fantasy continue for the non-institutional holders for a while?
    - pas 9y ago
      20% of what? Most central banks have foreign reserves ( https://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves https://en.wikipedia.org/wiki/List_of_countries_by_foreign-e... ) and and central banks' gold reserves are typically less than 1% of their reserves. So gold backing any currency is just a small part of all gold in existence (about 170 000 000 kg ~ 7T USD) For "all currency", the money supply is a lot (converted to USD): US M0 is 10T, UK 2.85T USD, Eurozone ~8T, Australia ~1.8T. And China, Japan, India and so on also has big monetary bases.
- joering2 9y ago
  You miss the point. You CONVERTING gold into USD on a current value. But rest assured if one million ounces are rendered untouchable for period of 100 years due to radioactivity, you can bet your bottom dollar the price of gold (remaining stock) will sky rocket.
  - NotSammyHagar 9y ago
    Uhm, there will be other problems if someone nukes nyc.
- iamben 9y ago
  The largest _private_ gold vault. The Federal Reserve Bank of New York is meant to be the largest (there may be more in Swiss banks) holding about 7000 metric tons (apparently).
  - avar 9y ago
    Which is around $280 billion, or about 1.5% of us GDP.
    - nickjarboe 9y ago
      If the world decides to leave fiat currencies and return to gold, the value of gold will be much (10x?, 100x?) higher.
- panarky 9y ago
  Exactly this. What is it about gold that triggers wild conspiracy theories from seemingly rational people?
oxryly1 9y ago
Off topic, but what is up with comments on zerohedge.com? Not this article necessarily, but so many of the articles on that site it seems the comments are just ridiculous alt-right bot armies arguing back and forth, peppered with links to obviously newly-invented sites touting crackpot theories.
- gumby 9y ago
  Despite (or because of?) the fact that quite a surprisingly high number of my friends read zero hedge, I've always referred to it as a "gold standard flat-earther conspiracy site." I will say that, like a stopped clock, it generates something meaningful once in a while. But so does a Markov model.
  - pyvpx 9y ago
    it was slightly more useful in 2010 and before.

the_mitsuhiko 9y ago

> Reading in between the lines, it seems as if a good chunk of gold has gone missing and there is an attempt by both sides to save face. Or more likely: you do not want to cause any confusion in the markets. Ultimately the state of that gold has very little impact on the world as it moves. However any speculation about it, potentially can have impact (and most likely not positive one). When people in Europe started to question the state of that Gold Germany and other countries had to act in some form. So for as long as the general population does not further dig into the issue (or we have some sort of cataclysmic event) the gold does not matter all that much.

Theodores 9y ago
"The gold in the U.S. was earned by West Germany through trade surpluses in the 1950s and 1960s and was never moved out of the United States due to fear of invasion by the Soviet Union." https://en.wikipedia.org/wiki/Gold_repatriation https://en.wikipedia.org/wiki/Gold_repatriation So for a while the U.S. was saying to Germany 'thanks for those cars, machine tool and other goodies, have some gold, we will keep it in the vault safe until you need it...' and, after a while, got a bit lax about moving the piles of gold from one vault to the next. So it is not as if this gold got there due to the Germans prudently shipping it across the Atlantic for safe keeping, it is money that should have been paid in gold for goods exported by Germany to the USA. I think they were promised to be paid and no physical gold was ever moved or paid.
- slv77 9y ago
  The US would be more than happy to pay back the Germans through exports of machine tools and cars and other goodies. I believe that German structural trade surpluses are an issue both inside and outside the Eurozone. Also after WWII the US had accumulated essentially all the worlds gold reserves leaving their currencies without backing. The alternative to the Bretton Woods agreement was the US gifting gold reserves.

erikb 9y ago

Ah that reminds me so much of Game of Thrones were this one dude builds all his power and businesses based on an empty vault and a promise of what is inside.

brianwawok 9y ago
Wasn't that movie only? I read book longer before but I never remembered the empty vault thing...
- ciroduran 9y ago
  In the TV show there is Xaro Xhoan Daxos http://gameofthrones.wikia.com/wiki/Xaro_Xhoan_Daxos http://gameofthrones.wikia.com/wiki/Xaro_Xhoan_Daxos
  - brianwawok 9y ago
    Xaro was in the books, but his plot was totally different. At no point did he open a giant empty vault.
    - erikb 9y ago
      I seem to have forgotten that. Thanks for clearing it up!
mannykannot 9y ago
There have been some recent analogs in real life. Mostly in the tech. industry, but also in luxury real estate.
- aswanson 9y ago
  I read that as theranos on the tech side. What real estate scam are you referencing?

mannykannot 9y ago

This puts me in mind of the rai stones of Yap, and particularly of one that was lost at sea, but which continued to be used in transactions because of a general agreement that it still existed and so its ownership could be recognized. I have lost track of the clearest version of this story that I have seen, but it is mentioned in the 'Transfers by Clearing' section here: http://www.wondermondo.com/Countries/Au/MicronesiaFS/Yap/RaiOfYap.htm http://www.wondermondo.com/Countries/Au/MicronesiaFS/Yap/Rai...

mattnewton 9y ago
I read about this in Felix Martin's Money: The Unauthorized Biography, which was quite good (in my uninformed opinion).
slv77 9y ago
One funny thought down these lines is that after 50+ years the gold in the vaults has been cold welded together. Gold is soft, malleable and heavy and after years maybe it's effectively a solid chunk of metal. Would explain the logistic challenges and the need to re-melt the bars if they had robbed chiseled apart.