• Tag Archives Bundesbank
  • Stanley Fischer’s Well-Timed Fed Exit

    Fed vice-chair Stanley Fischer’s surprise announcement of early retirement triggers the obvious question as to whether this could be the fore-runner to a serious market and economic deterioration ahead. Monetary bureaucrats, even if signally bad at counter-cyclical fine tuning, sometimes have a reputation for intuition about how to time their own career moves ahead of crisis. In this case, such suspicion may be wide of the mark given the personal circumstances. Even so, the exit of a Fed Vice-Chair, who in many respects has been the pioneer and the dean of the prevailing doctrine in the global central bankers club, is pause for thought.
    The Early Years When Professor Fischer published his famous paper ‘On Activist Monetary Policy with Rational Expectations’ (NBER working paper no. 341, April 1979), the fiat money world was well into the third stage of disorder following the collapse of the international gold standard in 1914. But things were at a temporary resting point where the skies seemed to be getting clearer. After the violent terminal storms of the gold exchange standard (early 20s to early 30s), and then of the Bretton Woods System, it seemed to many that the ‘monetarist revolutionaries’ had found a better practical monetary navigation route. The Bundesbank, the Federal Reserve, the Swiss National Bank, and even the Bank of Japan were pursuing an ersatz gold rule of low percentage increases in the monetary base or a related aggregate.

    This post was published at Ludwig von Mises Institute on Sept 10, 2017.


  • Breslow: This Is The Only Thing Preventing A Full Blown Market Panic

    “If you want a friend in this market… get a dog,” exclaims former fund manager Richard Breslow as he reflects on the farcical ‘market’ that traders contend with everyday.
    Via Bloomberg,
    If what is going on in the world wasn’t so serious, it would be entirely appropriate to describe any market moves that happen today as the silly season. This is going to be pure price action, where greed is already off for the weekend and fear is the order of the day.
    The only game that’s being played is called Find The Stops. And be aware that the market will only selectively pay attention to noise or comments based on the positioning of the weakest hands.
    The only news that will matter is unlikely to happen during this trading session and the storm tracker radar plots are highly unlikely to tell us something new.
    Remember those simple days when New York Fed President Dudley would speak– and people listened? On a normal day we’d be warned to remember that he’s going to give us his latest thoughts. Last night, all I heard was ‘yeah, yeah, heard it all before.’ If he gave the same speech next week it would be parsed to death. But traders just aren’t in a position nor the mood to fade these current moves.
    On the other hand, a Reuters story citing unnamed sources that suggests ECB Governing Council members mostly agree that their next step is likely to be reduced bond purchases sent the European sovereign bond market into a tizzy. We actually have a special file where we keep stories like this. No matter that Bundesbank President Weidmann, no less, reminded us that ‘inflation pick-up will only be sluggish and that uncertainty about the future path of inflation is quite large.’ Mandates be damned.

    This post was published at Zero Hedge on Sep 8, 2017.


  • Weird Things Are Happening With Gold

    Authored by James Rickards via Daily Reckoning blog,
    Last week featured two unusual stories on gold – one strange and the other truly weird. These stories explain why gold is not just money but is the most politicized form of money.
    They show that while politicians publicly disparage gold, they quietly pay close attention to it.
    The first strange gold story involves Germany…
    The Deutsche Bundesbank, the central bank of Germany, announced that it had completed the repatriation of gold to Frankfurt from foreign vaults.
    The German story is the completion of a process that began in 2013. That’s when the Deutsche Bundesbank first requested a return of some of the German gold from vaults in Paris, in London and at the Federal Reserve Bank of New York.

    This post was published at Zero Hedge on Aug 30, 2017.


  • The Truth About Bundesbank Repatriation of Gold From U.S.

    – Bundesbank has completed a transfer of gold worth 24B from France and U. S.
    – Germany has completed domestic gold storage plan 3 years ahead of schedule
    – In the 7.7 million plan, 54,000 gold bars were shipped and audited
    – In 2012 German court called for inspection of Germany’s foreign gold holdings
    – Decision to repatriate from Paris and New York was ‘to build trust and confidence domestically’
    – 1,236t or 37% of German holdings remain in New York Fed facility
    – Bundesbank wants to hold gold bullion
    – U. S. government declines to audit gold reserves … doesn’t want world to realise gold’s importance in the global monetary system
    Editor: Mark O’Byrne
    Last Monday, U. S. Treasury Secretary Mnuchin feigned to inspect the U. S. gold reserves in Fort Knox and joked flippantly that he assumed it was there.
    A day later the Bundesbank, announced that they had repatriated much of their gold reserves from the U. S. and France. Coincidence or coordination?

    In 2013 the Deutsche Bundesbank announced plans to store half of its gold reserves in Germany. At the time, only 31% was stored in the country. The Gold Storage Plan involved bringing gold home from both Paris and New York.

    This post was published at Gold Core on August 25, 2017.


  • Germany Finishes Gold Repatriation Project Three Years Early

    Germany has finished bringing home $31 billion of gold.
    In early 2013, the Bundesbank announced a plan to repatriate massive amounts of its physical gold reserves back into Germany. The goal was to have half of its gold back within the country’s borders by 2020.
    This week, the central bank announced it moved the final 100 tons from Paris earlier this year. It completed the move three years ahead of schedule.
    At nearly 3,400 tons, Germany’s gold reserves currently rank as the second-largest in the world.
    According to CNN, the Bundesbank said it used ‘verification measures’ throughout the transfer process to ensure no gold was stolen or compromised.
    ‘No irregularities came to light with regard to the authenticity, fineness or weight of the bars,’ the central bank said in a written statement.
    The Bundesbank said it made the decision to move the gold home ‘to build trust and confidence domestically.’ Pundits say the end of the Cold War also spurred the move. With the fear of a Soviet invasion gone, government officials no longer felt the need to keep its gold dispersed around the world to keep it from falling into Russian hands.

    This post was published at Schiffgold on AUGUST 24, 2017.


  • “The Euro Crisis Is Not Over” Former ECB Chief Economist Urges “Greek Sabbatical From EU”

    Otmar Issing, former Chief Economist and Member of the Board of the European Central Bank and the German Bundesbank, brings back the specter of Grexit scenarios, demanding a Euro-sabbatical for Greece.
    ***
    KeepTalkingGreece.com reports that, uin an interview with business news magazine Wirtschaftswoche, Issing warned of a new flare-up of the euro crisis.
    ‘The euro crisis is not over yet,’ said the economist, one of the architects of the Euro.

    This post was published at Zero Hedge on Jul 31, 2017.


  • Have Bundesbank Agents Infiltrated the Fed?

    Germany’s central bank is the Bundesbank. Prior to the commencement of trading of the euro in January 1999, the Bundesbank conducted Germany’s monetary policy. The Bundesbank has a reputation for pursuing general price-level stability above all else. You might say that the Bundesbank has inflation phobia. The reason for this Bundesbank inflation phobia is the remembrance of the hyperinflation Germany experienced between World Wars I and II. Given the US central bank’s recent actions, it would almost seem that the Fed has developed inflation phobia too.
    Although the US does not have general price-level stability, the rate of change of the consumer price index (CPI), no matter how you slice or dice it, is absolutely low. This is illustrated in Chart 1. Plotted in Chart 1 are the 12-month percentages changes in monthly observations of various CPI measures – the CPI including all of its goods/services items, the CPI excluding its energy goods/services items and the Cleveland Fed’s 16% trimmed-mean CPI. The 16% trimmed-mean CPI eliminates components showing extreme monthly price changes. Eight percent of the weighted components with the highest and lowest one-month price changes are eliminated and the mean is calculated from the remaining components, making the 16% trimmed- mean CPI less volatile than either the CPI or the CPI excluding prices for energy goods/services. In the 12 months ended June 2017, the percentage changes in the CPI with all items, the CPI excluding energy items and the 16% trimmed-mean CPI were 1.6%, 1.6%, and 1.9%, respectively. Moreover, the 12-month percentage change in the CPI, no matter how you measure it, has been trending lower since the first two months of 2017.

    This post was published at FinancialSense on 07/17/2017.


  • Who Knew? German Central Bank Has Been Selling Gold For More Than A Decade

    Authored by Louis Cammarosano via Smaulgld.com,
    Deutsche Bundesbank gold reserves shrink 45 tons over the past ten years.
    German Central Bank holdings fall From 3,420.6 tons at the end of Q2 2007 to 3375.6 tons, a drop of 1,446,783 ounces. German gold reserves have decreased 1.3% over ten years.
    Bring the Gold Home & Sell Some Deutsche Bundesbank, the central bank of Germany, has gained a high profile for its insistence on repatriating a good portion of its gold from vaults at the New York Fed, the Bank of England of London and the Bank of France in Paris. We have been covering the German gold repatriation story since they made their request in 2013 here, here, here and here.
    The German repatriation requests aimed to rebalance the Deutsche Bundesbank’s gold holdings from nearly 70% held abroad to 50% held within Germany’s borders. The German Central Bank announced earlier this year that it has nearly completed its plan to repatriate its gold.


    This post was published at Zero Hedge on Jul 8, 2017.


  • The Fed Accelerates The Collapse Of The Economy, The Clock Is Ticking Down – Episode 1306a

    The following video was published by X22Report on Jun 14, 2017
    Time Inc is cutting 300 jobs, Toy R Us is in trouble as sales continue to decline. Retail sales numbers are out and sales in each sector has declined. The retail industry is imploding. GM extends shutdown of more plants as inventories build up. 2nd Quarter GDP has taken another hit as the economy rips itself apart. Bundesbank’s warns that they are now looking at the biggest asset bubble they have ever seen and cryptos might cause everything to crash. The US Gov/Central Banks are going after cryptos now. The Fed makes their move and they raise interest rates. They have now just accelerated the collapse of the economy. As BoA reports when the Fed tightens we end up with an event.


  • Bundesbank’s Weidmann: Digital Currencies Will Make The Next Crisis Worse

    When global financial markets crash, it won’t be just “Trump’s fault” (and perhaps the quants and HFTs who switch from BTFD to STFR ) to keep the heat away from the Fed and central banks for blowing the biggest asset bubble in history: according to the head of the German central bank, Jens Weidmann, another “pre-crash” culprit emerged after he warned that digital currencies such as bitcoin would worsen the next financial crisis.
    As the FT reports, speaking in Frankfurt on Wednesday the Bundesbank’s president acknowledged the creation of an official digital currency by a central bank would assure the public that their money was safe. However, he warned that this could come at the expense of private banks’ ability to survive bank runs and financial panics.
    As Citigroup’s Hans Lorenzen showed yesterday, as a result of the global liquidity glut, which has pushed conventional assets to all time highs, a tangent has been a scramble for “alternatives” and resulted in the creation and dramatic rise of countless digital currencies such as Bitcoin and Ethereum. Citi effectively blamed the central banks for the cryptocoin phenomenon.

    This post was published at Zero Hedge on Jun 14, 2017.


  • Germany Continues to Bring Its Gold Home

    Germany continues to bring its gold home.
    In early 2013, the Bundesbank announced a plan to repatriate massive amounts of its physical gold reserves back into Germany. The goal is to have half of its gold back within the country’s borders by 2020. At nearly 3,400 tons, Germany’s gold reserves currently rank as the second-largest in the world.
    According to Handelsblatt Global, a scare in 2012 led to the decision to bring the gold home. The sovereign debt crisis in the eurozone that year led many analysts to question the safety of the country’s reserves. In fact, financial controllers said they weren’t even sure all of Germany’s overseas gold holdings existed. The Federal Audit Office demanded the central bank make regular spot checks to ensure its gold reserves abroad were ‘physically counted and their authenticity and weight’ confirmed.
    Germany began aggressively ramping up its repatriation program in 2014. The German central bank brought home 120 tons of gold that year. In 2015, Germany’s Bundesbank transferred more than 210 tons of gold back into the country from vaults in Paris and New York. According to the Financial Times, with the 2015 transfers, Frankfurt became the largest storage location for the country’s reserves after New York. The repatriation continued in 2016, with more than 100 additional tons of gold coming back into the country.

    This post was published at Schiffgold on JUNE 12, 2017.


  • The ECB Has Almost Run Out Of German Bonds To Buy

    One month ago, when looking at the sudden change in ECB bond purchasing patterns, especially of German Bunds, we reported that the central bank may have as little as 4 months of space left in its PSPP program when it comes to German bond purchases. The first thing that caught our eye was that based on calculations from ABN Amro’s Kim Liu, the ECB bought roughly 400 million fewer bonds in Germany in April than its rules allow, suggesting a severe scarcity of eligible bonds.
    “It was by far the largest deviation, at least for Germany, and for me suggests that on top of the political stress and smoothing of purchases, there are scarcity constraints for the Bundesbank,” said Pictet’s senior economist Frederik Ducrozet. “What it means is that the ECB has to be very cautious with its exit and if they don’t taper within less than six months (of ending the programme) something might have to give.”
    In addition to the sharp drop in nominal purchases, the ECB data also revealed that in just six months the average maturity of monthly German debt purchases by the ECB has dropped to under five years from more than 10.

    This post was published at Zero Hedge on Jun 6, 2017.


  • War on Cash Puts ECB, EU on Collision Course with Germany

    Bundesbank: It’s a war on personal freedom and choice.
    By Don Quijones, Spain & Mexico, editor at WOLF STREET.
    Relations between Germany, and the ECB have curdled in recent times over a key issue: the role of cash. Germans have a soft spot for physical lucre while the ECB and Europe’s executive branch, the European Commission, have openly expressed their desire to suppress, or even punish, its use.
    For Germany’s central bank, the Bundesbank, the war on cash is a war on personal freedom and choice, in the name of saving a financial system and its absurd negative interest rates. Last year Bundesbank president Jens Weidmann warned that it would be ‘disastrous’ if people started to believe cash would be abolished – an oblique reference to the risk of negative interest rates and the escalating war on cash triggering a run on cash.
    In Germany, trust in Europe’s financial institutions is already at a historic low, with only one in three Germans saying they have confidence in the ECB. That was before ECB president Mario Draghi gave an infamous speech in May last year laying much of the blame for the Eurozone’s weak economy on Germans’ proclivity to save, rather than splash out on foreign imports or invest in the stock market.

    This post was published at Wolf Street by Don Quijones ‘ Apr 7, 2017.


  • Are Germans About to Be Made to Pay for Their Love of Cash?

    The ECB would do so at its own peril. Germany loves physical money. According to a Bundesbank study, approximately 80% of payments in Germany are made in cash. Even among millennials, two-thirds say they prefer paying in cash to electronic means, a much higher level than in almost any other advanced economy with the exception of Japan.
    This is a big problem for a European establishment that is desperate to consign physical money to the scrap heap. Some countries, including France and Spain, have already set maximum cash limits of 1,000. Greece has dropped its cap for cash transactions from 1,500 to 500.
    In January the European Commission telegraphed its intention to implement a mandatory continent-wide limit by 2018, even if it violates the ‘non-fundamental’ rights of over 500 million EU citizens to privacy, anonymity, and personal freedom. The Commission’s plans are likely to meet strong resistance from certain quarters, in particular Germans.

    This post was published at Wolf Street on Mar 12, 2017.


  • BIS Admits TARGET2 Is A Stealth Bailout Of Europe’s Periphery

    While debates over the significance of the Eurosystem’s TARGET2 imbalances may have faded into the background now that sovereign yields in the Eurozone remains broadly backstopped by the ECB’s debt monetization generosity, and fears about an imminent European breakdown fall along the lines of populist votes more than concerns about lack of funding, the BIS has finally chimed in with the truth about what the TARGET2 number really showed.
    As a reminder, in mid 2012, financial pundits “discovered” the gaping imbalances building up within the Eurozone, as a result of a huge increase in TARGET2 claims at the Bundesbank, offset by a matched surge in liabilities across the European periphery, most notably Italy and Spain.
    At the time, most conventional economists and analysts, especially those based in Europe, and certainly the ECB, said to ignore the divergence as it was irrelevant. Others, such as Hans Werner Sinn, and this site, warned that TARGET2 is a “less than thinly veiled bailout for Europe’s periphery” as the stealth fund flow amounted to a financing of peripheral obligations, illegal under European rules.
    Then, at the end of January, it was none other than Mario Draghi who, almost 5 years later, made the first tacit admission that the skeptics were right when he explained to Italian lawmakers that a country could leave the euro zone but only first it would need to settle its debts with the bloc’s TARGET2 (T2) payments system.

    This post was published at Zero Hedge on Mar 6, 2017.


  • Germany’s Gold remains a Mystery as Mainstream Media cheer leads

    On 9 February 2017, the Deutsche Bundesbank issued an update on its extremely long-drawn-out gold repatriation program, an update in which it claimed to have transferred 111 tonnes of gold from the Federal Reserve Bank of New York to Germany during 2016, while also transferring an additional 105 tonnes of gold from the Banque de France in Paris to Germany during the same time-period.
    Following these assumed gold bar movements, the Bundesbank now claims to have achieved its early 2013 goal of repatriating 300 tonnes of gold from New York to Frankfurt, but after 4 years it is still 91 tonnes short of its planned transfer of 374 tonnes of gold from Paris to Frankfurt. In essence, over an entire 4-year period (i.e. 208 weeks), the Bundesbank has only been able to transfer 583 tonnes of gold back from New York and Paris to Germany. And the Bundesbank still claims to have 1236 tonnes of gold remaining in storage with the New York Fed.
    Predictably, instead of prompting the mainstream financial media into asking why these supposed gold bar movements have taken so long, the Bundesbank press release threw the mainstream media into a frenzy of immediately back-slapping the Bundesbank while regurgitating its press release with articles such as ‘Germany brings its gold stash home sooner than planned’ from Reuters , ‘Germany Gets Its Gold Back Faster With Job Seen Done in 2017′ from Bloomberg, and ‘Germans Sent Gold Away to Keep It From the Soviets. Now Much of It Is Back’ from the New York Times.

    This post was published at Bullion Star on 3 Mar 2017.


  • A Truth Bomb Just Went Off & It Annihilated The Fantasy Of A Strong Economy – Episode 1212a

    The following video was published by X22Report on Feb 23, 2017
    The EU is getting worried about the debt problem. The tax payers in Dallas are going to bailout the pensions. The everyday American is pumping up the real estate market. Fed’s national index drops signalling we are in a recession. Bundesbank prepares for record losses. UBS warns of credit crisis coming soon. Steve Mnunchin dropped a truth bomb, the economy is going to take more than 2 years to grow.


  • Bundesbank Prepares For Record Losses Once ECB Starts Hiking Rates

    Germany’s central bank reported its smallest profit in more than a decade in 2016 after setting aside a record amount of provisions against future losses on the bonds it is buying as part of the ECB’s stimulus program, its annual report showed on Thursday. “It is fair to ask … when we can take our foot off the monetary policy pedal,” Bundesbank President Jens Weidmann said while presenting the report.
    The Bundesbank recorded a net profit of 399 million euros (337 million), the lowest since 2004 and far below the the 3.2 billion profit it booked in 2015. The fall was largely due to higher provisions against paper bought as part of the ECB’s asset buying, which since June includes corporate bonds, and against cheap loans extended to banks.
    More troubling for holders of European bonds, the Bundesbank increased its provisions for bond losses to 21.9 billion from 19.6 billion a year earlier, a harbinger of what is to come once the ECB starts pulling its foot off the pedal.
    So far, however, the bank is making profits on its bond holdings. Ironically, the profit is mainly thanks to bonds from troubled countries such as Greece, bought at very high yields and against the opinion of Germany’s own representative on the ECB’s board, during the 2010-12 debt crisis. Of course, should Greece be forced to restructure its debt, all of the phantom, paper gains will be promptly wiped out as Greece bonds are repriced to reality.

    This post was published at Zero Hedge on Feb 23, 2017.


  • Is 50% of Western Central Bank Gold gone?

    We have recently had some significant news about the sovereign gold market that makes the unclarity even more unclear. Central banks and the BIS in Basel go to great length to tell the world absolutely nothing about their gold dealings. All transactions are carried out covertly and no central bank ever has an official audit of their gold holdings. The last US audit was during Eisenhower’s days in the 1950’s. Ron Paul has been pushing for an audit but to no avail. Will Trump instigate an audit? Well, he might have the intention but when he finds out that a major part of the US 8,000 tons of gold is not there, it will all go quiet. There have been pressures for audits in France and Germany in later years but this has had no effect. No country wants to reveal that the gold isn’t there.
    Germany takes 5 years to repatriate 647 tons of gold
    Germany has recently pretended that they are totally open about their gold dealings, but what have they actually told the world?
    In 2013 Germany announced a plan to repatriate 674 tons of gold from the US and France. In the first year, they only received 37 tons back and were told that they would have the rest in 2020. We have now been informed that the programme has been accelerated. Out of the 3,381 tons that Germany owns, 51% or 1,713 tons will be in Germany by the end of 2017. Over 49% of the German gold will remain abroad with 1,236 tons still in New York and 432 tons in London.
    You wonder why it needs to take five years to repatriate 674 tons. Listening to interviews with the chiefs of the Deutsche Bundesbank, they explained what a major logistical exercise it has been. According to the Bundesbank, they have had major problems with transport, insurance, security etc. If we take Switzerland as an example, we both receive and export over 2,000 tons of gold annually. And that excludes major transfers between banks and to private vaults. The same happens in countries like the UK, China, India and the US. So around the world, many 1,000s of tons of gold are shipped annually without any logistical problem. You wonder then why the normally very efficient Germans have problems to ship 674 tons over five years?

    This post was published at GoldSwitzerland on February 18, 2017.


  • Russia notes that German gold in U.S. was just a mirage

    Saturday’s report from Sputnik News, a division of the Russian government’s international information agency, shows just how closely that government is watching not just the gold market but also, it seems, GATA’s work. That is, the report addresses suspicions raised by GATA’s friends in Germany’s “Repatriate Our Gold” movement and reported almost exclusively by GATA that Germany’s gold reserves vaulted with the United States were never more than gold credits until the Bundesbank sought to repatriate the gold in recent years.
    Russia’s special interest in gold and GATA’s work appears to date from June 2004, when the deputy chairman of Russia’s central bank, Oleg Mozhaiskov, spoke to the summer meeting of the London Bullion Market Association at the Baltschug Kempinsky Hotel in Moscow and used only four English words in his address: “Gold Anti-Trust Action Committee“.
    While surreptitious intervention in the gold market remains a prohibited subject in the government-controlled Western financial news media, it is a subject of great interest in the government-controlled Russian news media, and GATA will continue its efforts to make the issue of interest everywhere.

    This post was published at Sputnik News