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Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

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Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#51

Post by ethbro »

uncle_d wrote: post #22
pyvpx wrote: post #14

Earlier quoted context omitted.

roads require maintenance and are only valuable between two points people wish to traverse. gold doesn't deteriorate, is trivially divisible, and can be moved when you want to -- stays put when you don't. gold has been a store of value for millennia , so I personally find it ignorant to ignore the historical significance. hopefully we can rope an asteroid with a few billion tons of gold (and other precious metals) an…

If diamonds are anything to go by, it is perhaps unlikely that the asteroid miners would dump the whole lot on the market in one go. It would be in their interests to maintain prices in order to maximise their profits, would it not?

Depends on if they're using the Bond villian playbook or not. I'm sure there's some convoluted plot you could cook up, given the threat to depress the world gold market.

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#52

Post by erikb »

jbmorgado wrote: post #20

I'm not really understanding what is going on here and the article doesn't address that: 1 - Why do Germany and Netherlands even store their gold in the USA? 2 - Why shall the USA/FED have any saying about Germany wanting their property back anyway? It's like me having to negotiate with my bank weather I can or not withdrawal my money from there.

Just google "site:news.ycombinator.com paypal" and you'll read a lot of stories where people need to discuss with an annoying bank to get their money back.

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#53

Post by mtempm »

mariuolo wrote: post #33

If not stolen, what's the advantage for the USG in keeping it there?

Unfortunately, all of the people of this world are not always as virtuous and honest as I would hope, especially those people in positions of great power.

Why did we drop 26,000 bombs on Muslim countries last year? Why is Snowden in Russia? Why did no one go to jail when evidence leaked of CIA torture, except the whistle blower? Why do the people of this planet produce a surplus of food and watch as some starve? Why did evidence the Bush admin lied about Iraq WMDs go unpunished?

The point is the leaders that exist dont mind cheating, and they usually get away with it. The advantage is that if they decide to take it, they can easily do so (and in the meantime it's significant bargaining leverage).

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#54

Post by VLM »

jtc331 wrote: post #9
Kenji wrote: post #3

"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…

> 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.

"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.

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#55

Post by krona »

> The US had paid for its imports with pieces of paper on the promise, that these pieces of paper were as good as gold and would be exchanged for gold at a fixed rate upon request. In 1971 Nixon just said screw you, you can keep those papers and we will keep your commodities and the gold. We stayed friends anyway. We had to.

It's a bit more complicated, isn't it? Wasn't it West Germany, in May 1971, that said "screw you" to the US and the Bretton Woods system (the same system that helped them rebuild their economy after the war) and performed a competitive appreciation by floating the currency, contributing to the resulting Gold crisis? The Nixon shock happened in August 1971, when the game was up.

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#57

Post by saalweachter »

mariuolo wrote: post #33

If not stolen, what's the advantage for the USG in keeping it there?

1200 tons of gold is worth $50B; Germany currently owes the US $175B. [1] Could it just be collateral?

[1] http://www.bbc.com/news/business-15748696

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#58

Post by mdekkers »

erikb wrote: post #49
mdekkers wrote: post #43

...the US will allow central banks to repatriate as much gold from New York as is absolutely necessary to allow them to have half of their gold at home.... What the actual fuck? Why do we need permission from the US to have our own gold?

Try to take the gold from someone with a bigger stick. You know how that'll end, right?

Indeed. FYI, I'm Dutch, not German, and am just wondering about the whole "the world needs permission" kind of thing.

Re: Why Deutsche Bundesbank had to promise to leave 1200 tons of gold in New York

#59

Post by brianwawok »

erikb wrote: post #38
patrickk wrote: post #2

Bloomberg has a very interesting article on this topic also: 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.

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.

Wasn't that movie only? I read book longer before but I never remembered the empty vault thing...
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