Peter Boehringer: Germany’s gold reserves in U.S. were only paper claims

As it often has done before, Germany’s Bundesbank has released news at Christmastime to avoid critical examination and discussion, this time news about its repatriation of the nation’s gold reserves.
The repatriated tonnage volume reported — “approximately 200 tonnes,” bringing the total of gold repatriated to approximately 1,580 tonnes or 47 percent of Germany’s gold reserves — is OK, not spectacular. And this month there was far more important news about Germany’s gold, though it was overlooked.
The important news came December 21 from the major German news agency, DPA-AFX, and most likely was written by the Bundesbank itself for DPA-AFX. The news agency published a German-language news brief that was uncritically republished by most German newspapers and magazines without anyone recognizing its political, economic, and historical sensitivity.
The news item said: “… in den 1950er und 1960er Jahren wuchs der deutsche Goldschatz rasant. Denn. … Bundesrepublik dank des Exports viele Dollar, die bei der US-Zentralbank gegen Goldforderungen eingetauscht werden konnten.”
In English: “Germany’s gold hoard grew rapidly in the 1950s and 1960s. Thanks to its export surplus, the Federal Republic amassed many dollars that could be exchanged at the U.S. central bank against gold claims.”
The news brief’s term was “gold claims” — not “physical gold bars,” which both the Bundesbank and the U.S. Federal Reserve contend have constituted the German gold reserves held in the United States.
This GATA release came out on Saturday. I sent a copy of it to Jim Rickards on Monday evening — and heard back from him within thirty minutes — and this was his comment on this story…
“Thanks Ed.”
“The whole “gold claims” versus “gold” distinction is a red herring, probably just lost in translation. It is true that Fed bars are not good delivery bars; they’re irregular and mostly about 92% gold; that’s why Germany has them refined in Switzerland before taking final delivery in Frankfurt. The gold is moving slowly not because it’s not there but because no one wants to disrupt the gold leasing market, which is based in New York and London, not Frankfurt.”
I sent Jim’s comments off to Chris Powell — and this was his reply…
“Thanks. Maybe, but this doesn’t explain why the Bundesbank would not produce a bar list, or why it can’t answer for itself.”
“Also, of course, Jim doesn’t explain why the Fed/Treasury should be concerned about disrupting the gold leasing market just by repatriating ratty old gold bars from the 1950s and 1960s from a vault in New York to a vault in Frankfurt. Sounds to me as if maybe the gold long has been assumed, on paper, to be in several places at once.”

This post was published at GATA