Posted by Adam English on the Wealth Wire Thursday, November 1st, 2012
As previously report in Wealth Wire, the German federal auditors’ office has publicly criticized Bundesbank, its central bank, saying they should be more pro-active when it comes to taking control and responsibility for the county’s gold reserves stored in the United States, Britain, and France.
Now they’re encountering the same thing domestic politicians and citizens in the USA have faced for decades. The Fed is stonewalling the Germans and refusing to let them even see the gold they own.
Federal Reserve Bank In New York
Credit: Wikipedia
Previous and repeated requests were only partially addressed. Bundesbank staff members were allowed to see the facility in 2007, but they reportedly only made it to the anteroom of the German reserves.
Bundesbank auditors made a second visit in May 2011. This time one of the nine compartments used to store Germany’s gold was opened. Only a few bars were pulled out and weighed, but that was it.
Even the details of this minuscule inspection were blacked out in a German auditor’s report “out of consideration for the Federal Reserve Bank of New York.”
So far, the 1,536 metric tons of gold, worth about $93 billion at spot prices, has only been backed up by personal assurances.
The Fed’s secrecy has warranted increasing suspicion and concern. It is understandable to limit access as much as possible for security reasons.
However, these are high-ranking officials with $93 billion in deposits. The Fed is merely holding the reserves for the Germans and is refusing to allow them to inspect what they own.
The Fed’s actions only help validate claims that Germany’s gold is long gone or been lent out and that promissory notes — official “IOUs” — are sitting in the vault. The Fed has vehemently denied the claims but has worked tirelessly to avoid any form of inspection.
More here: http://www.wealthwire.com/news/metals/4089?r=1
Replies
In perhaps the biggest story in gold since Hugo Chavez sent shock-waves throughout the gold market in mid 2011 (and propelled gold up $300 to a record $1915), the German Federal Accountability Office has ruled that the Bundesbank must conduct an audit on German Central Bank gold holdings, and in anticipation, has begun the repatriation of German gold from the NY Fed.
The Bundesbank will request the NY Fed ship 50 tonnes of German gold back to the motherland a year for the next 3 years!