Where Is Germany's Gold?
bloomberg.com
Where Is Germany's Gold?
1–10 of 91 posts
Re: Where Is Germany's Gold?
#2The recent Bloomberg redesign is truly bizarre. Microsoft WordArt-esque text popping out as you scroll...
Re: Where Is Germany's Gold?
#3So here's how this works. Gold bugs are big fans of buying gold. They have lots of gold. Their narrative of the financial system is that gold is the uber-asset that all other assets must be denominated in, and that fiat currency is doomed to collapse. The massive run-up of gold prices during the financial crisis played into this narrative, and despite the fact that mainstream economists, politicians, bankers, etc. still thought of it as a "barbarous relic" (Keynes), gold-bugs saw it as the key to a prosperous economy.
So now, gold prices have been weak for a few years, so they have to come up with a new narrative. And that narrative is global conspiracy. So you get groups like GATA [1] and Zero Hedge [2] pushing various stories about how gold is being squirreled away somewhere mysterious, or prices are being suppressed by faceless multinationals or what-have-you. Maybe it's true! I don't know, but there's never really been any evidence, and it just sounds like someone justifying a failed investment thesis.
[1] www.gata.org [2] zerohedge.com
Re: Where Is Germany's Gold?
#4Time for plan Bitcoin.
Re: Where Is Germany's Gold?
#5The recent Bloomberg redesign is truly bizarre. Microsoft WordArt-esque text popping out as you scroll...
I found it strange as well - sometimes the images popped up again and covered some text.
Re: Where Is Germany's Gold?
#6So here's how this works. Gold bugs are big fans of buying gold. They have lots of gold. Their narrative of the financial system is that gold is the uber-asset that all other assets must be denominated in, and that fiat currency is doomed to collapse. The massive run-up of gold prices during the financial crisis played into this narrative, and despite the fact that mainstream economists, politicians, bankers, etc. st…
It's always good to think about what evidence would convince you that the other side has a point.
I lean towards the side that thinks that the central and money center banks (not faceless multinationals) are suppressing the price of gold via fractionally-reserved lending of physical gold. What would convince me that this is not the case would be a comprehensive audit of the Federal Reserve's books and gold holdings.
You?
Re: Where Is Germany's Gold?
#7So here's how this works. Gold bugs are big fans of buying gold. They have lots of gold. Their narrative of the financial system is that gold is the uber-asset that all other assets must be denominated in, and that fiat currency is doomed to collapse. The massive run-up of gold prices during the financial crisis played into this narrative, and despite the fact that mainstream economists, politicians, bankers, etc. st…
I'm not a gold bug.
Banks still hold gold, they do so while ignoring other precious substances. Maybe it is a barbarous relic.
But some of the vaults this stuff is held in... they've got much less of it than was believed. Where is it? Why is no one concerned? Why are there no plain and verifiable answers forthcoming?
Re: Where Is Germany's Gold?
#8To be extremely cynical and pessimist: I guess it makes sense to bring the gold home in time for WW 3
(not only Germany is bringing their gold home, from the article France, Netherlands are doing the same)
Re: Where Is Germany's Gold?
#9I don't see the benefit in having all of your country's gold reserves stored in your country?
Firstly, there's the the invasion risk the article referenced, to which I'll add internal political division (talking generally, not just about Germany, although 1989 was not that long ago in geopolitical time). Having all of your gold in the central bank sounds to me like having all of your eggs in one basket, waiting to be plundered.
But there's also the functional use of the gold. While I can't imagine these reserves being spent anytime soon, in the wider 50-100 year timeframe it's more likely that they may be needed for emergency purchases or as security. In that situation, having at least some of your reserves offshore, particularly in the US which is likely to be your wartime creditor based on history, makes more sense than having to ship it back in a time of crisis.
Repatriating it all just sounds like paranoia or nationalism to me.
TLDR: A good backup plan for your data involves an offsite copy. Why not the same with backup gold reserves?
Re: Where Is Germany's Gold?
#10It's hard to judge what is more secure... a promise of essentially the U.S. government that the gold belongs to us (Germans), and would be available for sale, or storing the gold in Germany, where it can be seized by an invader, and maybe even ordinary criminals or corruptions. And it would have to be moved again to be sold in bulk, because once Germany needs to sell vast amounts of gold, nobody would trust Germany to just write IOUs.
Times have changed. Invasion has become unlikely, despite Germany having borders to several foreign countries, with a history of centuries of conflict in Europe. Even corruption is unlikely today to take away significant portions of such a gold depot.
Still, the only purpose of this gold is as a currency, and as such it doesn't matter that much if it is stored in Germany or in some country you would probably have to trust anyway to make use of it.