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"I am not criticizing the Bundesbank for storing 37 percent of Germany’s official gold in in a place there it has no control over it. It seems clear that they n

by Kenji 10y ago

"I am not criticizing the Bundesbank for storing 37 percent of Germany’s official gold in in a place there it has no control over it. It seems clear that they negotiated hard with the US and acted rather shrewdly." I am sorry, but as a layperson, I do not know what's to negotiate. If I own something, I should be able to take it home whenever I want?? This is mind-boggling. What's the point of property that you cannot access? That's not property.

RandomBookmarks 10y ago
Yeah. Can anyone comment on the trustworthiness of this blog post? I also do not understand what is there to negotiate (except storage fees).
- tonfa 10y ago
  It's a lot of "clearly that's how it happens" because from the author viewpoint (pro gold holdings), anything else would not make sense. E.g.: "It seems clear that they negotiated hard with the US and acted rather shrewdly." does not provide any source for the statement, and it's the same for almost everything in the article, just speculations. One could also imagine, that Germany plans on lowering their gold holdings and having them on account at the FRBNY would be a convenient thing to make that happen.
- the_mitsuhiko 10y ago
  There is very litte content in the blog so very little to not trust. The situation as described is hardly news. Foreign countries have troubles repatriating gold and that is hardly surprising. The US are in a better position to negotiate here.
jtc331 10y ago
> that's not property That's the whole point. The US government effectively treats other country's good reserves as their own. It was shrewd negotiation because they got much more than zero, and then US government/Federal Reserve has significant negotiating ability on its side by virtue of having the world reserve currency and the ability to impact monetary policy and systems so heavily on a global scale.
- kasey_junk 10y ago
  The blog post implies, without much proof, that it is the US Fed that is causing the gold to be moved slowly, which conforms to the blog posters political opinions. It could of course also be that the German gold is not moving out of the US Fed quickly because the German central bank has promised it as collateral for something, or it is involved in some other financial deal. The Swiss for instance were able to move about this much gold out of the Fed during the same time period with no problems.
  - tonfa 10y ago
    Is there anything on record claiming that the Bundesbank tried to withdraw more than 300 tons but was denied (besides the speculations)? Officially, they wanted to rebalance some of their holdings. The original plan was to remove 150 tons in 3 years, but due to undisclosed issues, that became a 300 tons withdrawal in 7 years, which was achieved three years ahead of schedule. I'm also wondering why all those articles assume that moving tons of gold is trivial, is there any description at what is involved in X tons of gold transportation (insurance / planning / protection / etc.).
- VLM 10y ago
  "US government/Federal Reserve has significant negotiating ability" Yeah about that, in public, the only lever we can pull against Germany is stalling. Not exactly a show of strength. If you take away our leverage over you by removing your gold, we'll... um... ah... we'll punish you by doing it really slowly, yeah that'll teach you a lesson. Like trying to cancel your cable TV or a gym membership, the only influence they can exert is to make the transaction as slow and painful as possible. Which has certain implications WRT perceived long term odds of reconciliation. In private more interesting deals might be going on of course. Just pointing out in public its the opposite of a show of strength LOL. Against the Swiss we can, and have, and will again, pull the privacy lever so holding their shiny yellow metal is unnecessary to retain leverage over them. You do what we say, because we have your computerized account records, not because we have your gold. I don't think we've powned the German financial system to the level we have the Swiss.
jpalomaki 10y ago
Well the article hints that there is not as much gold in the store as there should be. Or if the amount is there, it is not as high quality as it should be. If this was the case and Germans could prove this, it might not be in their interest to call out the Americans for cheating. The article point out that this could destabilize the world economy and that could be very costly for the Germans. Think about local banks collapsing and industrial exports plummeting.

by Kenji 10y ago

RandomBookmarks 10y ago

Yeah. Can anyone comment on the trustworthiness of this blog post? I also do not understand what is there to negotiate (except storage fees).

tonfa 10y ago
It's a lot of "clearly that's how it happens" because from the author viewpoint (pro gold holdings), anything else would not make sense. E.g.: "It seems clear that they negotiated hard with the US and acted rather shrewdly." does not provide any source for the statement, and it's the same for almost everything in the article, just speculations. One could also imagine, that Germany plans on lowering their gold holdings and having them on account at the FRBNY would be a convenient thing to make that happen.
the_mitsuhiko 10y ago
There is very litte content in the blog so very little to not trust. The situation as described is hardly news. Foreign countries have troubles repatriating gold and that is hardly surprising. The US are in a better position to negotiate here.

jtc331 10y ago

> that's not property That's the whole point. The US government effectively treats other country's good reserves as their own. It was shrewd negotiation because they got much more than zero, and then US government/Federal Reserve has significant negotiating ability on its side by virtue of having the world reserve currency and the ability to impact monetary policy and systems so heavily on a global scale.

kasey_junk 10y ago
The blog post implies, without much proof, that it is the US Fed that is causing the gold to be moved slowly, which conforms to the blog posters political opinions. It could of course also be that the German gold is not moving out of the US Fed quickly because the German central bank has promised it as collateral for something, or it is involved in some other financial deal. The Swiss for instance were able to move about this much gold out of the Fed during the same time period with no problems.
- tonfa 10y ago
  Is there anything on record claiming that the Bundesbank tried to withdraw more than 300 tons but was denied (besides the speculations)? Officially, they wanted to rebalance some of their holdings. The original plan was to remove 150 tons in 3 years, but due to undisclosed issues, that became a 300 tons withdrawal in 7 years, which was achieved three years ahead of schedule. I'm also wondering why all those articles assume that moving tons of gold is trivial, is there any description at what is involved in X tons of gold transportation (insurance / planning / protection / etc.).
VLM 10y ago
"US government/Federal Reserve has significant negotiating ability" Yeah about that, in public, the only lever we can pull against Germany is stalling. Not exactly a show of strength. If you take away our leverage over you by removing your gold, we'll... um... ah... we'll punish you by doing it really slowly, yeah that'll teach you a lesson. Like trying to cancel your cable TV or a gym membership, the only influence they can exert is to make the transaction as slow and painful as possible. Which has certain implications WRT perceived long term odds of reconciliation. In private more interesting deals might be going on of course. Just pointing out in public its the opposite of a show of strength LOL. Against the Swiss we can, and have, and will again, pull the privacy lever so holding their shiny yellow metal is unnecessary to retain leverage over them. You do what we say, because we have your computerized account records, not because we have your gold. I don't think we've powned the German financial system to the level we have the Swiss.

jpalomaki 10y ago

Well the article hints that there is not as much gold in the store as there should be. Or if the amount is there, it is not as high quality as it should be. If this was the case and Germans could prove this, it might not be in their interest to call out the Americans for cheating. The article point out that this could destabilize the world economy and that could be very costly for the Germans. Think about local banks collapsing and industrial exports plummeting.