REMEMBER THAT GERMAN GOLD REPATRIATION? WELL, YOU MAY NOT HAVE HEARD ...February 8, 2016
Mr. B. noticed this one, and passed it along with a passage in it highlighted in bold, along with his own speculations, So I read the article, and responded to him that I basically concurred. See if you can spot what he spotted:
There's the usual bow to the meme of German fears about an uncertain financial and geopolitical future, and one can only imagine these fears have intensified with the recent backlash against Chancellorin Merkel's "refugee policy," which is being met with increasing popular opposition both in her own country and in neighboring Holland, Sweden, France, and Austria:
In the wake of the euro zone crisis, many ordinary Germans want to see more of the 3,381 tonnes of gold in vaults at home and some have even questioned whether it still exists, prompting the Bundesbank to recently publish a long list of gold bars.
Just over 40 percent of the reserve, which Germany started building in the post-war boom years, is now held underground at the Bundesbank in Frankfurt, while almost the same amount is stored at the Federal Reserve in the United States.
But then there's a hint of an underlying sea-change:
Holding gold reserves abroad is a legacy of the Bretton Woods system of currency management established after World War Two. Much of the precious metal stayed there during the Cold War, when the former Soviet Union occupied eastern Germany.
Proof that it is still in safe hands is important for many Germans. The Bundesbank said all gold bars are "thoroughly and exhaustively inspected and verified" on arrival
Now, when one puts those two statements together, one ends up with the idea that Germany stored its gold in the USA to keep it safe from the prospect of an invasion by the Warsaw Pact, and that it now wants its gold back from the USA because that trust in its ally is evaoprating under the solar flare of American-sponsored sanctions against Russia. Russia has no plans of invading Germany, and just about everybody knows this except the neocons in the American Pentagon and State department. To put it country simple: Germans want their country's gold on German soil because the USA is no longer to be trusted. One cannot blame them. Most informed Germans know of America's Morgenthau plan for postwar Germany, a plan almost as draconian as what the Nazi regime had planned for the Soviet Union had it won that war, and that included the reduction of the German population by one half, and a complete denuding of the country of its powerful industrial base. It was a plan to basically undo the unification of Germany, and split it up back into smaller states, a plan to role back the clock to before 1871. Of course, that plan evoporated too - thankfully - in the realities of the postwar world. But American heavy-handedness has not as its allies are increasingly treated less as allies and more as satrapies.
But this is not what leaped out to Mr. B, and to me, when I read the passage in the article that he had pointed out in his email. It's the following passage, and it isn't about Germany at all, except in a roundabout way:
France, Germany's closest political ally in the euro zone, keeps less than half the amount stored in London and will have none at all by 2020 when half of the overall reserve will be guarded in Germany's financial center.
I have to admit, I did a double-take on reading that sentence. I actually said "What!?" out loud and to no one in particular. France is pulling all its gold out of London, and is going to store it in Frankfurt where it can be "guarded?" Probably you're thinking all the same questions I'm thinking: why not store it in Paris and guard it there? France, after all, has great big bank vaults and modern technology and burly gorilla security guys to guard things just as much as Germany does. So why store it in Frankfurt? One reason, of course, is that the European central bank, the bank for the whole EU, is located there (you can thank Chancellor Kohl for that little maneuver). So there's a story here, and one suspects it's a much deeper story than we're being told.
So here comes the high octane speculations of the day. Why is France moving all of its gold from London to Frankfurt by the year 2020(and why haven't we heard about that until now), and why is Germany repatriating more of its enormous gold cache? One thing that springs to mind, is that the move in Great Britain for BREXIT, for a British exit from the EU, is growing and gaining strength, in spite of Mr. Cameron's attempts to forestall it by negotiating away many of the choking regulatory policies of the Brussels bureaucrats. Perhaps the EU powers that be - and let's face it folks, those people are in Paris and Berlin, not Brussels - have seen the handwriting on the wall, and are planning accordingly for an "amicable divorce." Britain would lose very little should it happen, and gain a measure of independence.
That's one possibility.
But there's another, beyond BREXITs and German mistrust of its American "ally."
That other possibility is Deutschebank, which is a financial crisis just waiting to happen. As most people know, Deutschebank's exposure to toxic derivatives in the form of credit default swaps is now estimated to be around $60,000,000,000,000... that's sixty trillion dollars, more than the gross domestic product of the United States, and a few other large economies to boot. It's a meltdown waiting to happen, and it's probably no accident, in the light of this little revelation, that the big German banking giant is headquartered in its own twin towers in Frankfurt. That's a lot of bad paper, and it won't be fixed by paper assets (say, in various bullions).
Maybe Deutschebank has one of those "secret tunnels" to the European Central Bank for precisely such emergencies, just as there is rumored to be a similar "arrangement" between the New York Federal Reserve and the various big New York banks clustered around it. You never know, but in today's world, nothing really surprises me any more.
See you on the flip side...