It Begins: Bundesbank To Commence Repatriating Gold From New York Fed

What has happened in the last few months to make Germany a little edgy about their gold reserves being stored abroad in countries like the UK, France and America? Well, for one thing, the USA and France have had recent elections and both countries now have Socialist governments in place. Could this be the reason why Germany has decided to pull some of its reserve from the NY Fed and ALL of it from France? 

Of course that's not the reason given by Germany. No, their reason is that they're reviewing how they're storing their gold. They've already pulled 2/3rds of their gold from the UK late last year....

I am no economist, so I'm speculating here. Either Germany doesn't trust that their reserves are safe in these countries (would you if Obama or Hollande were in charge?); or they don't trust that it's actual gold they're holding (tungsten anyone?); or Germany needs to consolidate it's finances - and especially their gold wealth - at these uncertain financial times; or Germany is planing on leaving the Euro soonish.....

Overnight data shows that the first leg of a German recession is now official. So, all that time, money and effort to keep the Euro artificially high has now come home to roost. Germany, which is just about the only country in the EU doing well, has been brought down by being part of a we-are-one Socialist system. All those German-backed loans to Greece, Spain et al, has done absolutely nothing to keep Germany strong - in fact, the exact opposite has occurred. This all goes back to not allowing Greece to default and leave the Euro - all so that the dud of a currency and the Socialist dream of the United European Socialist States could be preserved. After all, Socialists don't like admitting that their dodgy ideology will never work. They'd rather destroy everyone than save what's left.

So, let's keep an eye on the price of gold in the next few months. It's being heavily manipulated at the moment. I only wish I had enough money to convert my savings into gold as I believe it's the safest commodity to have in these uncertain times.

Any other opinions out there?

In what could be a watershed moment for the price, provenance, and future of physical gold, not to mention the "stability" of the entire monetary regime based on rock solid, undisputed "faith and credit" in paper money, German Handelsblatt reports in an exclusive that the long suffering German gold, all official 3,396 tons of it, is about to be moved. Specifically, it is about to be partially moved out of the New York Fed, where the majority, or 45% of it is currently stored, as well as the entirety of the 11% of German gold held with the Banque de France, and repatriated back home to Buba in Frankfurt, where just 31% of it is held as of this moment. And while it is one thing for a "crazy, lunatic" dictator such as Hugo Chavez to pull his gold out of the Bank of England, it is something entirely different, and far less dismissible, when the bank with the second most official gold reserves in the world proceeds to formally pull some of its gold from the bank with the most. In brief: this is a momentous development, one which may signify that the regime of mutual assured and very much telegraphed - because if the central banks don't have faith in one another, why should anyone else? - trust in central banks by other central banks is ending.

Much more importantly, it is being telegraphed as such, with Buba fully aware of just what the consequences of this (first partial, and then full; and certainly full vis-a-vis the nouveau socialist regime of Francois Hollande which will soon hold zero German gold) repatriation will be in a global monetary arena, which is already scraping by on the last traces of faith in a monetary system that is slowly but surely dying but first diluting itself to oblivion. And in simple game theory terms, the first party to defect from the prisoner's dilemma of all the bulk of global gold being held by the Fed, defects best. Then the second. Then the third. Until, in this particular case, the last central bank to pull its gold from the NY Fed and the other 2 primary depositories of developed world gold, London and Paris, just happens to discover their gold was never there to begin with, and instead served as collateral to paper gold subsequently rehypothecated several hundred times, and whose ultimate ownership deed is long gone.

It would be very ironic, if the Bundesbank, which many had assumed had bent over backwards to accommodate Mario Draghi's Goldmanesque demands to allow implicit monetization of peripheral nations' debts has just "returned the favor" by launching the greatest physical gold scramble of all time.

More at this link.