ADAM TAYLOR | OCT. 31, 2012,
Germany's gold reserves are amongst the highest in the world and they have been kept almost entirely overseas due to Cold War fears of a Soviet invasion. Almost half of Germany's gold is kept in Manhattan — deep in the heart of the Financial District at the New York Fed.
But some German politicians seem to be getting uncomfortable with trusting the US with this system. They want to actually see the gold, to make sure its still there. Some even want it back. A campaign called "Bring back our Gold" was launched in May, and seems to be making an impact on mainstream politics.
But some German politicians seem to be getting uncomfortable with trusting the US with this system. They want to actually see the gold, to make sure its still there. Some even want it back. A campaign called "Bring back our Gold" was launched in May, and seems to be making an impact on mainstream politics.
Der Spiegel's Sven Böll and Anne Seith have published a good explainer about the situation. A large part of the movement seems to come from Peter Gauweiler, the head of the conservative Christian Social Union (CSU), who has for years demanded to know exactly where Germany's gold is (He eventually was allowed to visit the Bundesbank's domestic gold in storage in Frankfurt).
However, what really got Guaweiler riled up was a secret report from Germany's Federal Audit Office that sternly criticized the German central bank. The report, while apparently routine, looked like a key piece of evidence to those expecting some sort of conspiracy theory. As Der Spiegel describes it:
Indeed, the partially blacked-out report read like the prologue to an espionage thriller in which the stunned central bankers could end up standing in front of empty vaults in the US.
Germany has almost 3,600 metric tons of gold, second only to the US. Half of that gold has been stored at the NY Fed since the late 70s, sitting fifth sub-floor of the bank's building on Liberty Street, 80 feet below street level. The Germans were not allowed to see their gold for decades, but in 2007 they were finally allowed in, and, after further inquiries, finally allowed to actually touch some of the gold in 2011.
While this fuels conspiracy theories, it is standard practice for US gold storage institutions. The owners of the gold in Fort Knox have not seen their gold for decades. But that doesn't stop the rumors and conspiracy theories doing the rounds about missing gold, or secret agreements between the US and German governments.
While the report was mostly calling for better measures to account for the vast amount of gold, the movement to bring it all back is large. As Der Spiegel notes, that's hugely impractical, "One cannot simply pack 1,500 tons of gold into an Airbus A380 super-jumbo jet and fly it back to Germany."
But it wouldn't be entirely unprecedented. Ambrose Evans-Pritchard of The Telegraph notes that secret German reports have revealed that the country took two-thirds of it's gold back shortly after the start of the Euro a decade ago.
Evans-Pritchard says that the timing of the move makes no sense on the surface — coming as the euro was at its weakest — but may have been ordered as the Bank of England was selling off its own gold and there were fears that the gold may not be clearly allocated to Germany.
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