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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

#121

Post by [deleted] »

Zigurd wrote: post #114
dualogy wrote: post #84

Earlier quoted context omitted.

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 a…

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 tril…

[deleted]

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

#122

Post by ekianjo »

erikb wrote: post #37
21 wrote: post #35

> Switzerland is a small, neutral country without a serious army. They would hardly refuse to hand the gold back on request. This guy is suggesting that Germany could invade Switzerland if they refuse to give back their gold, so this is a good reason to keep it there. I'm pretty sure such action would be illegal under UN rules, ie: you can't invade a country because they don't give you back your posession. And Switze…

As Russia-Ukraine has shown you can take stuff by force without creating big scale war. And remember how Hitler just went state shopping before there was a war? The thing about war is that most party's don't really want it. So sometimes it's possible to grab some advantage that theoretically should result in war.

> And remember how Hitler just went state shopping before there was a war?

Hitler went state shopping because the regions he started to invade had a majority of German speaking folks. As soon as he started to do something else (i.e. Poland) it started a war.

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

#123

Post by b5u »

sandworm101 wrote: post #120
erikb wrote: post #36

> Gold is money, which is based on physical ownership, not on trust in the willingness and ability of another party to honor their promises. If you have gold, but you do not have it under your control, it is almost pointless to have gold. Really digging this one. That's why I proactively not listen to investors/consultants who suggest to buy some gold derivates for savety purposes. In other regards: What's the point…

Gold is no longer tied to power. Real estate now defines who is to be king. Look to the wealth funds of the middle east. They dont trade oil for gold these days. They buy land, the real international currency. The man with the most diversified land across many countries is king.

Land may be valuable at the moment, but that will likely change in the future when fresh, clean water will be more scarce and climate changes will render parts of Earth uninhabitable.

I'd recommend you reading this interview with M. Burry (guy who foresaw the real-estate crises in '08): http://nymag.com/daily/intelligencer/2015/12/big-short-geniu...

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

#124

Post by mamon »

lispm wrote: post #118
mamon wrote: post #107

There's no need for Germany to invade other EU members, because the ultimate goal of EU was to give the Germans control over the Europe without using military force, and that's working pretty well for them - they can keep other countries in check just because they provide most of the money to EU budget. But, Switzerland is NOT an EU member, so that's a different story :)

The ultimate goal of the EU is to promote peace and collaboration in Europe.

...under wise and benevolent German rule.

EDIT: of course a German (lispm) would deny that and downvote me for saying so :)

But the fact is that whenever an important decision is made in EU it is first made in Chancellor Merkel's office, and then approved by EU Commision and Parliament, which act as a decoys.

The latest example of that informal decision making process is the current refugee crisis.

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

#125

Post by tomohawk »

throwanem wrote: post #85
tomohawk wrote: post #34

When we build systems, we run tests to see if they actually work the way we think the should. We verify, as independently as possible, because it is important. What would happen if we went to evidence based banking instead of just taking the word of people with obvious ulterior motives.

Somebody'd figure out how to game a blockchain, or just render it irrelevant. You cannot engineer around human ingenuity. But it's always so much fun to watch people try.

That's not the point I'm trying to make. A simple way to test this system would be to allow the 'owners' of the gold to count it once in a while. As it is, there's no verification of anything.

A system with no transparency or verifiability is just waiting for abuse.

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

#126

Post by mannykannot »

tonfa wrote: post #97
mannykannot wrote: post #83

Earlier quoted context omitted.

These may be reasonable propositions (or were when they applied, especially in the cases of a) and c)), but if and only if one assumes the deposits are effectively on call, and apparently they are not. Your last sentence gets close to the key issue: if there is an innocent explanation, why have the parties who could remove the doubt over that explanation stopped talking about the issue?

> the deposits are effectively on call, and apparently they are not IMO you need more than speculation to claim that. Besides, it is known that US gold bars are of poor quality (a lot of the Banque de France gold is being recast because of it). "buyers don’t want the beat-up American gold" and “American gold,” the official says. “It is the ugliest.” https://www.bullionstar.com/gold-university/banque-de-france...

You say it needs more than speculation, but you are speculating about an alternative explanation (to be clear: I am not calling the Banque de France statement you quote as speculation, but the implication that it is the explanation for the stalled transfer appears to be so. Note that the Banque de France is itself performing the recasting of its American bars.)

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

#127

Post by ar0 »

pg314 wrote: post #82
ar0 wrote: post #41

Earlier quoted context omitted.

No, not really. The "nothing is amiss" argument goes like this: a) Until 1971, gold was regularly moved between central banks. The United States exchanged U.S. Dollars against gold and Germany made use of this. Obviously, it was easiest to just leave the gold where it was bought - in the United States. This was also where a lot of other central banks had (and still have) their gold, so it also made exchanges easier.…

> I also find it a bit strange that they seemed to go through a lot of effort in melting these bars to make sure no one can inspect the originals . You're inferring a motive. The stated reason is that those bars didn't conform to the London Good Delivery specification.

You're correct, I wasn't precise there. Good call! In fact, now that I think about it, there's also another potential and innocent explanation for this (pure speculation, though): Maybe the insurance companies for the transport only accepted to insure LGD bars, as otherwise they would have to value each and every individual bar prior to shipment to determine the insurance value.

(Opens up new questions for speculation, though: If that was the case, why didn't the Bundesbank disclose that as the reason for melting them?)

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

#128

Post by lispm »

mamon wrote: post #124
lispm wrote: post #118

Earlier quoted context omitted.

The ultimate goal of the EU is to promote peace and collaboration in Europe.

...under wise and benevolent German rule. EDIT: of course a German (lispm) would deny that and downvote me for saying so :) But the fact is that whenever an important decision is made in EU it is first made in Chancellor Merkel's office, and then approved by EU Commision and Parliament, which act as a decoys. The latest example of that informal decision making process is the current refugee crisis.

Germany does not rule the EU, so this remark is silly.

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

#129

Post by sgt101 »

I think that at 41k per kilo one tonne of gold is worth $41m.

1300 tonnes of gold is therefore worth a bit more than $51bn, which is a lot, but approximately 1 year of the UK's defence budget, so in the scale of things not really all that much.

Now, this would mean that (given that Germany is a big economy) there would be what... 20 times that amount of gold available to back a gold currency - so about $1trn. I think that the world economy is about $80trn which leaves a big problem with the assertion that a gold backed currency could challenge the $.

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

#130

Post by _acme »

Ologn wrote: post #95
stupidhn wrote: post #12

Earlier quoted context omitted.

Diversification of "hard assets" because the value of sovereign currency is illusory and often fleeting. I agree that mining, storing and transporting gold around the planet is a waste of resources, but there are only so many places to store wealth in a physical manner. The fact that gold has historically been useless in industry probably adds to its value.

Gold is not useless in industry. It is used to conduct electricity in many industrial settings. It also has other uses - dentists use it as a tooth crown etc. That it is useful is why it has value. Yes, storing and transporting gold for financial purposes may be a waste of resources. But gold is easier to store than most commodities - put it in a vault for several centuries and forget about it. You can't do that with…

When was the last time gold was used in dentistry?
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