Gold repatriation

Gold repatriation refers to plans of various governments to bring back their gold stored outside the home country.

Many countries are using foreign vaults for safe keeping part of their gold reserves and now there is a growing tendency not to trust the foreign custodian...

Germany planned to ship home 300 tonnes of gold from the US and 374 tonnes from France by 2020, in order to have half (1695.3 tonnes) of its official gold reserves stored in Frankfurt. The German central bank (De Bundesbank, or BuBa) has been trying to repatriate 300 tonnes from New York since 2012 – but officially got back a mere 5 tonnes in 2013. The plan halted as German politicians decided their gold “is safe in American hands”.[6][7][8] Germany has 45 per cent of the country's 3,391 tons of gold bars stashed in the strongroom deep beneath the Federal Reserve Bank of New York in Manhattan.

West Germany earned this gold through trade surpluses in the 1950s and 1960s and never moved it out of the United States to ensure that it did not lose the lot in the event West Germany was invaded by the Soviet Union. The 300 tons of gold that Germany is bringing home from a New York strongroom is being transported little by little and will take until 2020 to complete.The German central bank, or Bundesbank claimed there were mysterious delays in the repatriation programme.The bank said 5 tons were repatriated from New York last year, along with 32 tons brought home from Paris. Germany aims to ultimately keep only 37 per cent of its gold at the Federal Reserve in New York, where most of the world stores gold. Multi-billion-dollar transfers are easily done by simply carting the gold from one country‘s cubicle to another inside the vault.[9]

Rickards and Skoyles appear to argue that Germany may be repatriating gold in the first round of musical chairs in which China is preparing to roll out a gold-backed Yuan. Under this theory, the rest of the world’s currencies will sink unless their nations’ can scramble to get their hands on enough gold to lend credibility to their paper.

...In light of the above facts and evidence, one can see why the Buba is doing all in its power to avoid the spotlight being shone on the purity of its gold inventory: after all the last thing the German central banks would want is someone to go through the publicly available archived literature, to put two and two together, and figure out that it does not take one massive "rehypothecation" (see "to Corzine") event for German gold credibility to be impaired: all it takes is death from a thousand micro dilutions over the decades to get the same end result. Because chipping away one ounce here, one ounce there for years and years and years, ultimately adds up to a lot.

We eagerly look forward to the Buba's next iteration of self-defense. We can only hope that this one does not include a reference to a "phantom debate", to "East German terrorist Simon Gruber" or to Goldfinger, as it will merely further destroy any remaining credibility the Bundesbank may have left in this, or any other, matter.

Boehringer speculates that individual bars may have several owners, perhaps as the result of bars being leased, sold, or subject to complicated financial arrangements. “I can’t prove it,” he adds, saying the onus of proof should be on the central bankers, not him. He isn’t alone in raising doubts. John Hathaway, co-manager of the $1.3 billion Tocqueville Gold Fund, says Germany might need the slow, seven-year repatriation window to unwind complex financial arrangements by which the gold was loaned out, perhaps several times. Their questions about multiple owners aren’t completely out of left field, as there is a loan market in which gold bars are put up as collateral and then sold to third parties for the duration of the deals.