GERMANY WANTS TO REPATRIATE ITS GOLD… AGAIN!?!?

This story is a good one, and it has me going in all sorts of directions, or rather, taking several different runs and Wile E. Coyote nosedives toward some high octane speculation, each of which ends, however, in the same place: smashing into the Speculation Canyon floor below. This story was shared, once again, by S.D., with our gratitude:

‘Repatriate the gold’: German economists advise withdrawal from US vaults

"Now, wait a minute!" you might be telling yourself. "This story sounds very familiar." Indeed it should, because it's almost an exact replicate of a similar story we blogged about years ago, beginning in 2015 (just use the search engine on this website, and search for "German gold repatriation" and you'll see a good number of articles on the subject). And just last year, there was this blog:

And here we are, yet again, for the third time in a decade or so, and Germany is not trusting the USA not to keep its greedy mitts off of Germany's gold. It's a problem the two countries have had going all the way back to 1928, when the then-President of Germany's Reichsbank, Dr. Hjalmar Horace Greeley Schacht, visited his central banking buddy, Benjamin strong of the NY Federal Reserve, and asked to see Germany's gold  reserves in the vault. Much to Strong's chagrin - and Schacht's amusement - the staff returned to inform the two bankers that they simply could not find Germany's gold. Schacht, according to his own memoirs, merely smiled at Strong and said, "that's ok, I know you're good for it," an episode that in the light of events of the past decade suggests that Schacht knew full well before he made his request to see the gold, that it was not there, and that this meant that Mr. Strong was probably not "good for it."

But whatever one makes of that strange episode in the story of Germany wanting to repatriate its gold from American vaults, what one notices about this current story is its resemblance to its previous iterations beginning in 2015. Even the details are remarkably similar: the amounts of gold Germany possesses and wants to repatriate are similar (approximately 1000 tons), the size of Germany's gold reserves are also similar, and all stories mention that Germany possesses the second largest reserves after the USA, and so on.

It raises questions: what happened to the previous repatriation? Did Germany quietly reverse its prior policy and allow reserves to be stockpiled once again in the USA? If so, why? Was it to uphold the dollar? Or is it something even worse? Is the resemblance of the stories from a decade ago, and this story, an indicator of a completely manufactured narrative, one trotted out every so often for whatever reason (e.g., to promote a lack of confidence in the financial system)?  This, in part, seems to be the thrust of the current German obsession, as the article relates:

Emanuel Mönch, a leading economist and former head of research at Germany’s federal bank, the Bundesbank, called for the gold to be brought home, saying it was too “risky” for it to be kept in the US under the current administration.

“Given the current geopolitical situation, it seems risky to store so much gold in the US,” he told the financial newspaper Handelsblatt. “In the interest of greater strategic independence from the US, the Bundesbank would therefore be well advised to consider repatriating the gold.”

...

Michael Jäger, the head of the European Taxpayers Association (TAE) as well as the Association of German Taxpayers, has also said Berlin should make its move, arguing that the US’s stated desire to seize Greenland should concentrate minds.

“Trump is unpredictable and he does everything to generate revenue. That’s why our gold is no longer safe in the Fed’s vaults,” Jäger told the Rheinische Post. “What happens if the Greenland provocation continues? … The risk is increasing that the German Bundesbank will no longer be able to access its gold. Therefore, it should repatriate its reserves.”

Jäger said he had written last year to the Bundesbank and the finance ministry, urging them to “bring our gold home”.

Until recently the gold issue has been the preserve mainly of the far-right Alternative für Deutschland (AfD), which has repeatedly urged the return of the gold for patriotic reasons. But it has increasingly crept into the mainstream discourse.

Clearly, there are echoes of the Schacht-Strong exchange, only this time, it is clearly being implied that the US may simply steal Germany's gold because "Trump is unpredictable and he does everything to generate revenue." There is no Schachtian absolution here, no "I know you're good for it." And this raises the question of Germany's previous repatriation effort, an effort that I covered back then in some detail. One of those nasty details was that there was no real transparency about the assay quality of the gold that was returned to Germany's Bundesbank.

All this to say that I'm suspecting there is a pattern here, one going all the way back to that Schacht-Strong encounter in 1928. What I'm suspecting - my high octane speculation of the day in fact - is this: the Schacht-Strong encounter occurred in an era of renegotiated German war reparations, the so-called Dawes and Young Plans (of 1924 and 1929 respectively). Toward the end of this period comes Hjalmar Schacht, inquiring about Germany's gold, which, as it turned out, could not be found. Almost a century later, another gold request from the same country, this time, that country did not want merely to see its gold, but to have it returned. Some of it, according to the stories in 2016, was, but we know nothing about its assay quality, and attempts by Germans to learn that quality from the Bundesbank were consistently stymied. A decade later, and again Germany wants its gold back, and this time it is clearly stating that it simply does not trust the United States.

So what's the pattern uniting all these events? I suggest that for whatever reason, Germany may have realized early on, and probably as a result of the first world war, that there simply was not enough gold to cover all the currency and transactions, and that the bankers of the west - the Bank of England, the Federal Reserve, and the Bank of France - simply could not be trusted to cover accounts(The 2015 German repatriation was directed towards German reserves in the Federal Reserve, in the Bank of England, and in the Bank of France). Germany, on that view, is doing exactly what we see the BRICS nations doing right now with silver: its calling attention to the fact that there is too much paper, and not enough of the real thing and that western banks cannot make good on physical delivery. If Germany makes it official at a government level and says "we want our gold back," and America says, "we haven't got it", then the plug will have been well and truly pulled. Gold, and silver, are becoming geopolitical. The plug is being pulled on that vast and hidden system of finance of collateralized and rehypothecated bullion.  The result are the regionalized power-and-culture blocs you see being formed right now, with the USA moving quickly to reassert its hegemon status in North America and the western hemisphere.  No one wants to pull the plug, it's just that there is too much paper, and therefore, too much unreality in the system, that only reality - real cash, real commodities, and real production - will do, not paper contracts.

See you on the flip side...

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