German Bundesbank: Co-conspirator in US Federal Reserve's Gold Heist ?

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Published : January 22nd, 2013
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The profession of blind trust by the director of Germany's central bank for his people's gold in the custody of others is remarkable. In other circumstances, it might be humorous, even laughable. The German parliament representative (are they really still 'representative' of the German people?) is not convinced their citizens' gold is, indeed, present and accounted for.

What would Jay Leno do if he entrusted his rare car collection with the Fed, but couldn't see them - even visit them for a peek-a-boo?

 "Sorry ole buddy, but your cars are unallocated in a pool with those car collections of others. Bogart's are here, along with Jerry Seinfeld's, Ralph Lauren's, and two dozen others, or so. I'm sure you understand. What we could do is return one car a year for three years. We'll start off with a 1968 Corvair. Sound like a plan, pal? No? Hey, here's an idea: why not start another collection!"... Paul Volcker, former Fed chairman, 1987

German gold reserves stored in NY Fed Reserve in safe hands - Dombret

‘Phantom debate' on German gold reserves safety adds to German public uncertainty in tough European Union economic times, says Deutsche Bundesbank director Andreas Dombet.

Author: Dorothy Kosich
Posted: Monday , 05 Nov 2012


Andreas Dombret, a member of the Executive Board of the Deutsche Bundesbank, the German equivalent of the Federal Reserve, called a demand by German politicians and the country's federal Court of Auditors to audit Germany's gold reserves now being held in the U.S., "a discussion driven by irrational fears."

During a reception sponsored by the Bundesbank Representative Office in New York City, Dombret said, "I wish to warn against voluntarily adding fuel to the general sense of uncertainty among the German public in times like these by conducting a ‘phantom debate' on the safety of our gold reserves."

German is believed to have the second-largest gold reserves in the world, second only to the United States. German politicians as well as Germany's federal Court of Auditors have requested that the Bundesbank audit German's gold reserves, the majority of which are in storage in offshore banks.

Reports say the Bundesbank has agreed to ship 150 tons of gold currently stored at the New York Federal Reserve to Germany over a three-year period. A newspaper report claims 50 tons of gold annually will be returned to Germany to be meilted down to test the overall purity before being re-cast into standard gold bars.

In his speech last week, which was addressed to attendees at the reception, as well as Federal Reserve Board Governor William C. Dudley, Dombret said Germany's gold reserves were accumulated over time, thanks, in part, to its economic boom in the 1950s and 1960s. Germany's economic strength resulted in large trade account surpluses, most of them acquired in U.S. dollars.

"At that time, the International Monetary System, known as the Bretton Woods System, was dominated by the US currency," he said. "As long as this system was in force, which was up until 1981, the US Fed was obligated to exchange its currency for gold."

"Any account surplus resulted in an increase in Germany's gold reserves," he observed. "This gold was stored in US faults for obvious reasons. This was not only the case for the gold held by the Bundesbank-it was, in fact, common practice."

"Thus, we are now looking back at 60 years not only of fruitful cooperation in many fields and international fora, but also of sorting gold and trading via the New York Fed," Dombret said. "As a matter of fact, it is sensible for us to do so in New York, as Frankfurt is not a gold trading venue."

"Throughout these 60 years, we have never encountered the slightest problem, let alone had any doubts concerning the credibility of the Fed. And for this, Bill [Dudley], I would like to thank you personally," Dombret declared. "I am also grateful for your uncomplicated cooperation in so many matters. The Bundesbank will remain the Fed's trusted partner in the future, and we will continue to take advantage of the Fed's services by storing some of our currency reserves as gold in New York."

"At the same time, you can be assured that we are confident that our gold is in safe hands with you, Dombret stressed. "The days in which Hollywood Germans such as Gerd Fr
ӧbe, better known as Goldfinger, and East German terrorist Simon Gruber, masterminded gold heists in US vaults are long gone."

"Nobody can seriously imagine scenarios like these, which are reminiscent of a James Bond movie with Goldfinger playing the role of a US Fed accounting clerk," Dombret suggested. "While gold is important, we have to combat a crisis of confidence in the euro area. This is the task we need to concentrate on. And we will do so."

German gold reserves stored in NY Fed Reserve in safe hands - Dombret

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