GOLD, GERMANY, AND GEOPOLITICS: PART ONEOctober 27, 2012
This one has me reeling for several reasons, folks, and it may take me a few days to even talk about it over a multi-part blog, because I literally couldn't, and still can't believe it. For starters, let me first say that so many of you were on top of this story that I literally received various versions of it from all over the world from readers of this site, from Australia, to the subject of this story (Germany), to Taiwan, Great Britain, and even (I think) Japan and Brazil. The upshot is, many of you are thinking the same thing I am: this is huge, this is major, and, of course, because it is huge and major, the lamestream media presstitutes, particularly in the USSA, are not talking about it.
In last Thursday's News and Views from the Nefarium (Oct 25, 2012), I talked briefly about the following article, and in particular, one paragraph in it, but just for interest's sake, and to give the context, let's give the whole article:
"It’s 10 P.M. In Frankfurt. Do You Know Where Your Gold Is?
"Filed by KOSU News in World News.
October 25, 2012
"At a hearing last year, Ron Paul asked Ben Bernanke if gold is money. Answer: No. So why do central banks hold it as a reserve? Answer: Tradition.
"Gold, as we’ve said before, is weird. People still think of it sort of like money. Central banks around the world still hold gold alongside actual currencies like dollars, euros and yen. And they’re adding to their gold reserves at a rate of hundreds of tons a year worldwide.
"A gold industry group recently suggested that Portugal and Italy use their gold reserves as collateral against new loans.
"Just this week, Germany’s federal court told the Bundesbank to prove that the country’s massive gold reserve actually exists.
"This isn’t as random as it seems; more than half of Germany’s gold reserves are held at the New York Fed, and hasn’t been inspected by the Germans for decades. This dates back to the ’50s and ’60s, when foreign governments could still exchange dollars for gold, and often parked their gold reserves in New York.
"So over the next three years, 150 tons of German gold will be shipped back to Germany for inspection.
"And yet. As John Carney notes at CNBC:
"In reality, it does not matter one bit whether the Federal Reserve Bank of New York actually has the German central bank’s gold or whether the gold is pure. As long as the Fed says it is there, it is as good as there for all practical purposes to which it might be put. It can be sold, leased out, used as collateral, employed to extinguish liabilities and counted as bank capital just the same whether it exists or not."
You can find this article here(courtesy of one of this site's readers, Mr. P.J.T., who brought it to my attention):
Now, I really hope you read that last paragraph again, and when you do so, I hope that you, like me, do a double take: It doesn't really matter if collateral really exists or not, just so a bank says it does? Gee, that's really neat. So....I can go to my local Bank of Amurrika and say that I live in a ten million dollar mansion, (which doesn't really exist), and use it for collateral for a loan!
Of course, banks don't function that way, unless, as recent mortgage scandals have shown, they are the ones committing the fraud, and doing so for and with the government... then it's ok to say - as Catherine Austin Fitts discovered - that there are really houses on lots of properties, an then to issue derivatives and credit default swaps consisting of bundles of mortgages on said houses, which do not in fact exist. That sort of fraud could and would land the average person in jail.
But when international bankers, or central banks, do it, then it's a different matter. The fraud only works so long as all the capos play along with it, and they only will continue to do so, if it's to their benefit to do so.
Thus, when a major economic and technological power, and incidentally, according to some sources, the world's second largest holder of gold reserves, calls for audits on its gold and orders its central bank to do so, and most of that gold is in the hands of the notoriously corrupt U.S. Federal Reserve, then I tend to sit up and take notice, for this is a sure indicator that some of the capos at the table not longer trust some of the other capos that the table.
We may view this, perhaps, as a split between the German government - in response to growing political pressures from its own population, or in response to its own growing misgivings about the true depth of the fraud - and its central bank, which would be the most likely way to view it, or we may view it as a bit of deep theater, i.e., that the split between the German political, and financial, powers is for show, and that the German financial power is equally, if not even more, wary of the growing signs of massive fraud in London and New York, and the German government's calls for actual repatriation and audit are really the actions of a catspaw for the financial sector.
While this view may seem unlikely, I am bold to suggest that, in fact, it may be true, for witness the recent trip of the Merkel government to China... Asian trade is vital to the German economy, so we may make a bit of a prediction. While Kanzlerin Merkel may issue reassuring noises and clucks and coos to the folks in Brussels, London, and New York, the real action is going to be between Germany and Asia. If one sees even the slightest bit of support from Russia or China for an audit of Germany's gold, or of their own calls for international examinations and audits of the West's gold markets... well, then, that to my mind means that Berlin and Beijing were talking about a whole lot more than just exports or imports during Ms. Merkel's recent visit to China...
But there's even more to this story of Germany, Gold, and Geopolitics...
...See you on the flip side.