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Germany Repatriating Gold From NY, Paris 'In Case Of A Currency Crisis'

16 points by bitcartel 14y ago

flexie 14y ago
The article asserts that this could be seen as a lack of confidence in the Euro but fails to explain why this should not be seen as a lack of confidence in the dollar or in America. After all, if the Euro broke down, the Germans might want to secure their holdings in France, and not just their holdings in the US.
- gotofritz 14y ago
  If the Euro collapses, they want to be able to get other currencies with their gold. The gold in France is pretty useless for thet.
  - deleted 14y ago
    [deleted]
  - flexie 14y ago
    Let me make myself more clear. The article says that the Germans are planning on repatriating all the gold from France. But why is that a sign of distrust in the Euro, whereas bringing back gold from New York is not distrust in the dollar? Gold is gold, right? For me the whole thing about being able to get foreign currency quickly sounds less credible. Even if the Euro collapsed and the gold were in Germany they could get American dollars quickly, should the situation arise. Isn't is more a distrust in all the institutions and all the systems as such, in case one or more of the major currencies collapses?
    - SyneRyder 14y ago
      Forbes skipped part of the original quote from the Deustche Bundesbank press release. The full quote is: "With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time." I read that as Germany strengthening domestic trust & confidence (via gold repatriation), at the expense of exchanging gold for foreign currencies: specifically, the US Dollar, since that's the only currency where gold reserves are being reduced (ie the amount of gold in Euro & Pound countries remains unchanged).
    - bitcartel 14y ago
      The plan is to move 300 tonnes from NY to Germany over 7 years, so whatever the reason, they're not doing it in a hurry to meet any immediate crisis.
    - rtpg 14y ago
      Because one good usage for having all that gold would be to back an independent currency (if they decide to pull out of the Euro). Although I'm not sure if investors care whether the gold is actually in Germany or not, it does send a signal.
mynameishere 14y ago
No good explanation. They only had so much gold in NYC because of the small but real threat of the Soviets invading. The only reason to bring it back is the tiny threat of it being stolen by the US or France. and to have the ability to sell gold quickly If needed. Eh, they can sell it while it's still in the vault. That's how it's always done.
- bitcartel 14y ago
  Another reason is to make sure they get their gold back first, just in case there's a been a financial ponzi scheme in gold trading where paper instruments are not backed up by real assets. http://www.bloomberg.com/news/2011-12-09/hsbc-sues-mf-global-brokerage-over-stored-gold-silver-bars-1-.html http://www.bloomberg.com/news/2011-12-09/hsbc-sues-mf-global... "Five gold bars and 15 silver bars underlie eight Comex contracts between the brokerage and its client Jason Fane of Ithaca, New York, the unit of London-based HSBC said in a court filing yesterday. Both parties have asserted claims to the bars, creating difficulties for HSBC, which is storing them, the bank said. HSBC asked a judge to decide who the rightful owner is."

16 points by bitcartel 14y ago

The article asserts that this could be seen as a lack of confidence in the Euro but fails to explain why this should not be seen as a lack of confidence in the dollar or in America. After all, if the Euro broke down, the Germans might want to secure their holdings in France, and not just their holdings in the US.

gotofritz 14y ago
If the Euro collapses, they want to be able to get other currencies with their gold. The gold in France is pretty useless for thet.
- deleted 14y ago
  [deleted]
- flexie 14y ago
  Let me make myself more clear. The article says that the Germans are planning on repatriating all the gold from France. But why is that a sign of distrust in the Euro, whereas bringing back gold from New York is not distrust in the dollar? Gold is gold, right? For me the whole thing about being able to get foreign currency quickly sounds less credible. Even if the Euro collapsed and the gold were in Germany they could get American dollars quickly, should the situation arise. Isn't is more a distrust in all the institutions and all the systems as such, in case one or more of the major currencies collapses?
  - SyneRyder 14y ago
    Forbes skipped part of the original quote from the Deustche Bundesbank press release. The full quote is: "With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time." I read that as Germany strengthening domestic trust & confidence (via gold repatriation), at the expense of exchanging gold for foreign currencies: specifically, the US Dollar, since that's the only currency where gold reserves are being reduced (ie the amount of gold in Euro & Pound countries remains unchanged).
  - bitcartel 14y ago
    The plan is to move 300 tonnes from NY to Germany over 7 years, so whatever the reason, they're not doing it in a hurry to meet any immediate crisis.
  - rtpg 14y ago
    Because one good usage for having all that gold would be to back an independent currency (if they decide to pull out of the Euro). Although I'm not sure if investors care whether the gold is actually in Germany or not, it does send a signal.

mynameishere 14y ago

No good explanation. They only had so much gold in NYC because of the small but real threat of the Soviets invading. The only reason to bring it back is the tiny threat of it being stolen by the US or France. and to have the ability to sell gold quickly If needed. Eh, they can sell it while it's still in the vault. That's how it's always done.

bitcartel 14y ago
Another reason is to make sure they get their gold back first, just in case there's a been a financial ponzi scheme in gold trading where paper instruments are not backed up by real assets. http://www.bloomberg.com/news/2011-12-09/hsbc-sues-mf-global-brokerage-over-stored-gold-silver-bars-1-.html http://www.bloomberg.com/news/2011-12-09/hsbc-sues-mf-global... "Five gold bars and 15 silver bars underlie eight Comex contracts between the brokerage and its client Jason Fane of Ithaca, New York, the unit of London-based HSBC said in a court filing yesterday. Both parties have asserted claims to the bars, creating difficulties for HSBC, which is storing them, the bank said. HSBC asked a judge to decide who the rightful owner is."