Tag Archives: bundesbank

Guest Post: 47 years after 1968, Bundesbank STILL fails to deliver a gold bar number list

Written by Peter Boehringer, initiator of the German campaign “Repatriate our Gold”.

Frequent followers of the German public campaign “Repatriate our Gold“ already know how intensively we have been struggling since 2011 (and longer) with Deutsche Bundesbank to finally – after more than 50 years of external storage of Germany’s gold – get credible transparency regarding this matter. Some progress was brought about recently (2012 disclosure of the whereabouts of Germany´s gold by BuBa; 2013 partial repatriation plan announced by BuBa; 2013 and ongoing through 2015 alleged physical repatriation of approximately 200 tons to date – equaling approximately 10% of Germany’s gold abroad). But real proof and transparency is still lacking from Bundesbank’s side!

One of the oldest demands from our campaign has been (and still is!) the publication of BuBa’s gold bar number lists from all four storage locations. Lists that should have been static (i.e. unchanged) since 1968 when Germany’s gold accumulation (was) ended; a full three years before the official end of the underlying Bretton Woods system. Yesterday, October 7, 2015; a full 47 years later and after five years of our heavy lobbying against BuBa’s ridiculous “security concerns” regarding the publication of the lists, the Deutsche Bundesbank officially and finally did publish a so-called “gold bar list”. The “list-to-end-all-conspiracy-theories” was celebrated both in a BuBa press release “Bundesbank publishes gold bar list” as well as in the (naïve) mainstream media. Confer e.g. Bloomberg “Bundesbank to Doubters: Here Is Our Gold. Every. Single. Bit of It.

This article is intended to dismiss the impression which writers from both BuBa and its “external media department” at Bloomberg are clearly and provocatively trying to give: “Bundesbank to Doubters: Here Is Our Gold. Every. Single. Bit of It. Germany’s central bank has listed all of its gold.”

For the umpteenth time in 47 years, BuBa yesterday pretended to give transparency regarding Germany’s gold – but again failed miserably. I hereby challenge both BuBa’s Mr Weidmann and Mr Thiele and Bloomberg’s Mr Lorcan Roche Kelly to either withdraw their apodictic and loud but still completely unproven propaganda statement “Here is our gold – finally do believe it you stupid gold bug nutcases!!” – or to prove their so far unfounded and factually wrong statement!

buba Goldbarren07
Courtesy Bundesbank

1. No bar number list was made available by Bundesbank

Firstly, I am asking journalists and interested readers to open the 2,300 page long “custodian gold holdings – bar list” document : Everybody can see at first glance that the very first column of the “gold bar” list starting on page 7 is headlined “INVENTORY number” rather than “Producer’s Bar number”. An “INVENTORY number” however is something COMPLETELY different than the “Producer’s bar number”! It is a number artificially created on paper or a plastic sticker by the respective central bank which has nothing to do / no connection with the unique producers’ bar number pressed on the bars physically by the refineries when a bar is cast! The difference is absolutely CRUCIAL in that the very point of having a REAL gold bar number list is to enable a critical global public of gold experts and independent auditors as well as us-the-people and owners of the gold to check every individual bar not only regarding its physical existence but also to detect double countings on OTHER balance sheets (from central banks, Gold-ETFs, etc.)! The artificial and highly unusual “INVENTORY bar number” method Bundesbank has chosen to now publish “a gold bar list” completely fails in that respect. This list is worthless as a basis for sound, physical and worldwide auditing and counterchecking of all available global bar lists in order to detect and avoid double countings. We hereby claim that this approach by BuBa and its “sub-custodians” (Banque de France, Bank of England and Federal Reserve) was a DELIBERATE smokescreen chosen to confuse the worldwide public without providing transparency! This approach cannot be excused in any way by Bundesbank’s very “honest” fine print for the list: “The Bundesbank, the Bank of England and the Banque de France use internally assigned inventory numbers, whereby the Bank of England and the Banque de France only allow part of this internal number to be published. The gold bar list therefore only shows the last three digits for its gold bars stored at the Bank of England and the Banque de France.” This is NO industry-standard bar number list – individual bars could only be unambiguously identified if Bundesbank had provided the producer’s bar numbers as well as the name of the producing refinery as well as the year the bars have been cast! “Repatriate our gold” hereby officially demands this additional information which should be very easy for Bundesbank to publish!

2. Why and how many bars in list newer than 1968?

Secondly, we challenge the Bundesbank to explain why with almost 100% certainty the REAL bar number list as detailed under 1. would NOT exclusively consist of bars produced in the 1950s and 1960s – ending exactly in 1967 or 1968 latest. Since 1968, Germany’s gold hoard should have been completely untouched with one or two possible exceptions due to lendings on a very small scale according to BuBa’s own statements in the past. We-the-owners of the gold demand to know whether, why, and how many of Germany’s bars (if actually existent and uncompromised) are younger than 1968 in BuBa’s vaults or the vaults of our sub-custodians. And how it is possible that (according to the list released yesterday) almost all bars are of 995 or higher fineness – even though pre-1967 this fineness had been rather uncommon especially in the US. And why – since obviously LBMA-standards are now met by practically all bars in the new list – Bundesbank still chose to melt down bars allegedly repatriated from the US in 2013-2014 (thereby destroying old bar numbers) without any photo / video proof of this process?

3. Audit the Fed – and the BuBa and the Banque de France and the Bank of England

Once all of these very valid and justified questions are not only answered verbally but backed up by clear evidence (i.e. a REAL bar number list!) – the work will only have to begin: The Federal reserve has not published any information regarding a real audit in its vaults (US-gold or custodial gold) since 1953 – one might even say since the 1930s! Similar story at the BoE and BdF vaults and even in Frankfurt! Holt unser Gold heim” / “Repatriate our Gold” continues to demand physical and external audits performed by sworn-in auditors independent from the central banks – with all detailed results publicised. In addition, we demand the acceleration of Bundesbank’s “repatriation scheme” announced in 2013 – which is way too intransparent, too slow and not ambitious enough (only 50% of Germany´s gold in Frankfurt by end-2020)!

In summary – we have to strongly dismiss Bloomberg’s completely unfounded conclusion: “Here Is The Gold. Every. Single. Bit of It. Germany’s central bank has listed all of its gold”. We call on both Bundesbank and on an independent, investigative international media to have a second and third look into the matter – and then to definitely come to a much more critical conclusion! Bloomberg’s conclusion is either ridiculously ill-founded and / or has been pre-written by the Bundesbank itself in a vain effort to finally and for good end all gold debates: “[Obviously], Bundesbank has become tired of people asking and decided to give the doubters enough [gold] data to keep them busy for a very, very long time.” Wrong and wishful thinking: The case of the whereabouts and the physical and (un-?)compromised status of Germany’s gold has NOT been closed yesterday by Deutsche Bundesbank! The work has barely begun – but without REAL bar number lists and REAL audits, it CANNOT even BEGIN in earnest. The struggle will have to continue – Bundesbank leaves no other choice to the owners of the gold. And the issue will not go away from the desks of Mr Weidmann and Mr Thiele. “We. Demand. A. Real. Bar. List. Not. Yet. Another. Paper. Trail. Without. Any. Evidence.”

2015-06_Peter_Boehringer_klein

Peter Boehringer is founder and president of “German Precious Metal Society” – an NGO established in 2006. He is also the most widely read writer on gold matters in German language countries, a frequent speaker on precious metal conferences and the initiator of the German and international campaign “Repatriate our Gold” which has prompted similar public campaigns for gold repatriation in more than a dozen countries. He is the author of the Book “Holt unser Gold heim” / “Repatriate our Gold”, published in 2015 in German in renowned “Finanzbuchverlag” editing house. https://www.facebook.com/Holt.unser.Gold.heim.PeterBoehringer

Austria Expresses Concern Over Their Gold At BOE

Yesterday the Austrian Court of Audit (Der Rechnungshof) released a report on the Austrian central bank’s official gold reserves audits (Austria holds in total 280.0 metric tonnes). This report contains (official) critical notes regarding the safekeeping of the Austrian gold.

The report is written in German, but from being Dutch (my native language is similar to German), using Google Translate, having spoken to Peter Boehringer about this and using the English introduction from the Rechnungshof’s report, we can squeeze the essential bullion points from the report.

I will sum up the highlights. Let’s start with a quote from the English introduction:

In end-2013, the OeNB (central bank of the Republic of Austria) stored some 82 % of its physical gold holdings at a depository in England [BOE] and therefore ran a high concentration risk. The current depository concept lacked adequate measures to reduce this risk. Additionally, the gold depository contract with the depository in England contained deficiencies. As regards the gold reserves stored abroad, internal auditing measures were lacking. 

The Austrian Court of Audit expresses great concern about the disproportionate amount of official gold reserves (229.6 tonnes) stored at the Bank Of England (BOE), which will be the Austrians excuse for repatriating, “the gold depository contract with the depository in England contained deficiencies” and, “gold reserves stored abroad, internal auditing measures were lacking”. They’re putting it blunt for an official source on a topic so sensitive as gold.

oenb

The OeNB didn’t have any proper auditing rights or access to their own gold at the BOE until 2013. This is line with what Bundesbank executive board member Carl-Ludwig Thiele said in 2011, “We’re in negotiations with our partner central banks [FRBNY] to develop auditing rights.” Apparently, foreign central banks had no rights whatsoever to audit their own gold at the BOE or Federal Reserve Bank of New York (FRBNY) until 2013.

Though it hasn’t been only imprudent policy from the BOE; between 2009 and 2013 there had been no audit protocol for the Austrian gold by the OeNB itself. From the February 24, 2015, report

The OeNB had no appropriate concept to perform audits of its gold reserves. … The lack of audit measures represented a gap in the internal control procedures of the OeNB. The OeNB started in March 2014 with the development of an ​​audit program, which included all the gold holdings of the OeNB.

In May 2014, for the first time, a delegation from the Austrian accountability office travelled to London in order to check on Austria’s gold reserves stored in vaults at the BOE.

Strikingly the Bundesbank’s current gold repatriation schedule was released January 16, 2013. The Austrian central bank decided on January 17, 2013, to “adopt measures … in terms of the management of gold stocks … that should reduce the risk of asset losses of the OeNB”. Repatriating gold is highly contagious at the moment.

After Germany received its first gold bars from the US in 2013, the Dutch central bank surprised the world on November 21, 2014, by stating they had successfully repatriated 122.5 tonnes from New York (which according to me was planned long before), on December 5, 2014, the Belgian central bank announced they were investigating to repatriate their gold reserves, followed by the Austrians on December 12, when newswire Der Standard stated:

…In Austria, the Court of Auditors has adopted the gold concept in its recent OeNB examination. In its draft report it provides the OeNB diverse recommendations. One of the key points: Given the “risk of a high concentration at the Bank of England”, the examiner advises to “rapidly evaluate all possibilities of a better dispersion of the storage locations”. Not only the parties should be diversified, but also the “actual spread of storing among locations”.

Gold Relocation Possible

The central bank has not ruled out such a relocation. The existing gold storage concept would be reviewed, potentially it will bring parts of the stored gold in the UK to Austria, OeNB experts have stated. Any changes will be decided upon security and economic criteria, according to the OeNB.

A brief orientation on the current gold concept: Austria has 280 tonnes of official gold reserves, only a small part of (17 %) is kept in Vienna. 80 % of the reserves are located in London, the most trading partner in gold, 3% percent is stored in Switzerland.

What more can we learn from the latest report from the Austrian Court of Auditors. Quite a lot, apparently the OeNB has been allocating gold and unwinding leases at a rapid pace since 2009. Have the Austrians been preparing repatriating a few years ago? Just like the Dutch? From the report February 24, 2015:

The composition of the gold holdings of the OeNB in the years 2009 to 2013 changed greatly. The proportion of non-physical inventory fell from 56% in 2009 to approx. 22% in 2013. 

Currently all gold loans ran out no later than September 24, 2014.

In the report there is a table of all gold holding compositions from 2009 to 2013. Here’s my best translation:

Austria official gold reserves 2009 - 2013

We can see Gold loans dropped from 116.451 tonnes in 2009 to 23.887 in 2013, down 79.49 %. Total non-physical holdings dropped from 156.589 tonnes in 2009 to 61.671 in 2013, down 60.62 %. Austria has unwounded all leases and is working towards being fully allocated.

If I compare these numbers with previous research I did on the gold holdings of the Austrian central banks, the similarities are not hard to find. It seems the Austrian Court of Auditors has labeled unallocated gold as non-physical, which is probably the best way of putting it, as unallocated gold represent a claim on gold, though the holder does not own specified bullion. From the LBMA:

UNALLOCATED ACCOUNT An account where specific bars are not set aside and the customer has a general entitlement to the metal. … The holder is an unsecured creditor. 

The next chart demonstrates the composition of Austrians allocated versus unallocated gold. We can see that by end 2013 unallocated gold accounted for 61.68 tonnes, the same as the total non-physical holdings in the chart above.

Austria official gold reserves allocated vs unallocated ratio

This chart reaches to December 2014, when Austria only had 15.58 tonnes of unallocated gold versus 264.41 tonnes allocated – nearly fully allocated.

There is more information in the report that I don’t feel comfortable publishing as I haven’t discussed it with a native German speaker. 

The Eurosystem

Austria’s allocation policy has been the main reason the Eurosystem’s total unallocated gold dropped to from 232 tonnes in 2013 to 183 tonnes by the end of 2014 (France and Malta also helped).

Eurosystem Official Gold Reserves Allocation, December 2014Reuters released an article on February 24, stating the Eurozone has increased its gold holdings by 7.437 tonnes to 10,791.885 tonnes in January 2015. I can’t verify this from the numbers I have. Perhaps it has got something to do with Lithuania joining the Eurosystem on January 1, 2015, though Lithuania holds only 5.8 tonnes (fully allocated). The article also notes Turkey has decreased its official holdings, though this is due to changes in Reserve Requirements commercial banks hold at the Turkish central bank (CBRT), not because the CBRT is trading on the open market – read this post for more details on the Turkish gold market.   

Currently Germany, Estonia, Ireland, Greece, Italy, Cyprus, Latvia, Luxembourg, The Netherlands, Slovakia and Finland are fully allocated.

 

Eurosystem Official Gold Reserves Allocation December 2014

Belgium Denies To Repatriate Gold From The UK

Belgian newspaper Het Nieuwsblad was reporting on Wednesday Belgium will repatriate 200 tonnes of gold from the Bank Of England (BOE). De Tijd is now stating the opposite, quoting the governor of the Belgian Central Bank (NBB) Luc Coene:

The repatriation from the UK is not true…. There are other and more effective ways to verify if the gold in London is really ours. We have an audit committee that inspects the Belgian gold in the UK regularly…. Repatriating would be more expansive with transport, storage and security costs.

One thing is for sure, the Belgians are nervous about their gold (227 tonnes) held abroad. In December 2014 the Luc Coene admitted he was investigating to repatriate all Belgian gold reserves, on TV-network VTM Nieuws:

Luc Coene: If one feels that in surrounding countries these decisions are taken, one knows that this question will be asked to us as well. We’re pro-active investigating all the elements, so when the question will be asked, we can answer it.

The practical problem is the transport of the gold, with all the risk that come with it. Second, if we repatriate we need to setup a large security system in Belgium. Though currently this is done by certain central banks that are specialized in this.

Did the investigation point out the transport and storage costs would be too high? Currently the storage fee NBB pays to its custodians (BOE, BIS, Bank of Canada) is €250,000 a year. Is Belgium not repatriating because of the costs or because it got obstructed by other authorities?

Last week I reported about the mystery regarding the fine gold tonnage claimed to have been repatriated by the Netherlands and Germany in 2014 from New York (208 tonnes), and the drop in total foreign gold deposits disclosed by the Federal Reserve Bank Of New York (FRBNY) in 2014 (177 tonnes). The mystery – that adds to a long list of oddities – couldn’t be clarified to me by the central bank of the Netherlands, Germany or US. Additionally, I called and emailed to the central bank of the Ukraine to ask whether they had deposited any gold in New York in 2014 that could help explain the mysterious 31 tonnes gap. Until now, all four central banks were reluctant to say anything that could restore their common credibility, but perhaps one will in the future – still waiting on email reply from the central bank of the Ukraine.

There is enough evidence European countries, among others, are nervous about the security of their official gold reserves stored abroad – who wouldn’t be if unprecedented amounts of physical gold were moving to Asia while Western consultancy firms are clearly underreporting this trend. Accidentally there are more and more stories popping up that might be a backwash from the tension between the big custodians (FRBNY, BOE) and the gold owners.

This story about Belgium repatriating 200 tonnes from the UK, which was officially denied after a few hours by the NBB, makes the story of the Netherlands that bought 10 tonnes last December, which was also officially denied after a few hours, more suspicious. I hate to speculate, though our central banks and the impossibility of the numbers they put out force me to speculate – apparently there is no other option.  

The fact the 31 tonnes gap is not being elucidated by the central banks in concert might signal these central banks have something to hide. If the custodians have something to hide, we can ask ourselves; did Belgium apply for withdrawing 200 tonnes of gold from the UK, but shortly after got a telephone call this request was not part of the range of possibilities? Or will the Belgians repatriate, but for security reasons don’t like the global press to know?

UPDATE 5 PM GMT+1: Press release from the NBB:

In accordance with the Organic Law and the Statute of the National Bank the official foreign reserves of the Belgian State, including the gold reserves, are held and managed by the NBB.

The official gold reserves account for 227 tonnes, most of which is stored at the Bank of England, and the remainder at the Bank of Canada and the Bank for International Settlements.

The National Bank does not intend to repatriate these reserves, which are regularly audited.

The National Bank will report any movement regarding these gold reserves as appropriate.

Federal Reserve New York Gold Withdrawal Numbers 2014 Don’t Match Dutch-German Repatriation Claims

From January to December 2014 the Federal Reserve Bank Of New York (FRBNY) has been drained from 176.81 tonnes of physical gold out of the foreign deposit accounts. A drop from 6,195.60 tonnes to 6,018.79 tonnes over 12 months, FRBNY data published on Friday showed. The FRBNY doesn’t disclose how much is withdrawn by which central bank.

FRBNY foreign gold deposits table 2014

FRBNY foreign gold deposits

These numbers do not match the claims made in Europe about gold repatriated from the US. This is bad news.

On November 21, 2014, the Dutch central bank, De Nederlandsche Bank (DNB), surprised the world by stating they had in utmost secret repatriated 122.5 tonnes from their gold deposit at the FRBNY. Although not specifically disclosed by DNB, all the gold must have been repatriated in 2014.

January 19, 2015, the German central bank, the Bundesbank, announced they had successfully repatriated 85 tonnes from New York and 35 tonnes from Paris in 2014. Of the 85 tonnes from the FRBNY 50 tonnes were recast according to the London Good Delivery (LGD) standard.

Some simple math: 122.5 tonnes plus 85 tonnes is 207.5 tonnes; this is the amount DNB and the Bundesbank claim to have withdrawn from the vaults in New York. The FRBNY states it only delivered 176.81 tonnes to their European allies across the pond. The gap accounts for 30.69 tonnes; this is “the problem” the three central banks are now facing.

“The problem” adds to a range of events that happened since 2011 and fueled speculation about whether the FRBNY can fulfill all their gold obligations to foreign depositors.

  1. Repatriating gold from New York in itself means the Europeans don’t trust the FRBNY as the custodian for their gold.
  2. Allegedly a delegation from the Bundesbank was obstructed by the FRBNY when they came to the New York vaults in 2011 to audit their gold.
  3. The Bundesbank refuses to publish a bar list of their official gold reserves. Just as the Netherlands, even after a Dutch FOIA request.
  4. In 2012 the Bundesbank presented a schedule to ship home 150 tonnes from the US in three years (ending in 2015). In 2013 the Bundesbank changed their schedule to repatriate 674 tonnes from New York (300) and Paris (374) over seven years. Why did they change their initial schedule and why would it take seven years to hire a few planes to ship the gold from New York to Germany?
  5. In 2013 the Bundesbank only received 5 tonnes from New York. That is very little gold given Germany should have safely stored more than 1,400 tonnes in nine compartments at the FRBNY. How hard can it be for the FRBNY to process a withdrawal request by a customer?
  6. The first batch from New York, the 5 tonnes, was said to be recast into LGD bars before stored in Frankfurt, but the Bundesbank refused to disclose why. In any case, the origin of newly cast bars can’t be traced, that makes it impossible to know if it came from New York or someplace else.
  7. During the recasting of the bars no independent external auditors were present.
  8. In 2014 DNB stated to have repatriated 122.5 tonnes from New York – presumably in less than 10 months. Why can’t the Bundesbank repatriate in this tempo?
  9. 50 of the 85 tonnes Germany repatriated from New York in 2014 were recast in LGD bars before stored in the vaults in Frankfurt. Again, no details were disclosed by the Bundesbank about bar numbers, nor was any independent party allowed to audit and assay the gold. For some reason the Bundesbank did mention the BIS was involved in an audit: “We also called on the expertise of the Bank for International Settlements for the spot checks that had to be carried out. As expected, there were no irregularities” 
  10. Late January 2015 the IMF published an update of the foreign exchange reserves of the Netherlands that showed DNB had bought 10 tonnes of gold in December 2014. A few hours later DNB denied it had bought any gold, without elaborating on how the IMF got the false numbers. Kind of adventitious given everything mentioned above. Perhaps DNB did buy gold in 2014 because there was something wrong with the gold they repatriated from the FRBNY or they wanted to repatriate more, but weren’t allowed? Of course, this had to be carefully covered up. Any problem that would have occurred from repatriating gold from the FRBNY can never be openly discussed for it would destabilize the international monetary order.

The list goes on and on. Perhaps the latest data released by the FRBNY is a typo, perhaps 30.69 tonnes was shipped to Germany early January 2015 and the Bundesbank counted this as repatriated in 2014 to make the tonnage shipped home in 2014 look less worrisome compared to the tonnage DNB got back, perhaps there is a explanation for the gap in tonnage reported by both sides of the Atlantic. I surely hope so. In any case it’s very alarming the three central banks didn’t even take the simple effort to make it seem all the numbers add up.

I will call and email all three central banks on Monday to confront them with the current situation, although I doubt either will change any of their numbers. In my opinion there can only be three causes for “the problem”:

  1. Someone is lying. That can be DNB, the FRBNY or the Bundesbank.
  2. There has been a gold swap between the FRBNY and some other central bank. This other central bank (or BIS) would than have delivered 30.69 tonnes to Germany, in return it got a claim on gold at the FRBNY. But why? Such a scenario wouldn’t lift any concerns regarding the FRBNY’s gold obligations, au contraire. Besides, both DNB and the Bundesbank specifically meant to repatriate gold from New York, where according to official sources their gold is supposed to be.
  3. UPDATE 8 PM GMT+1: Commenter “awgee” (read below) asked me if I failed to consider if a central bank, other than DNB or the Bundesbank, added gold to their stock at the FRBNY in 2014 which could explain the gap. The answer is I didn’t consider this, though it’s a very good point. If any central bank deposited approximately 31 tonnes in 2014 this would actually be the most obvious explanation for “the problem”. As far as my data goes back (1995), the last time a deposit was visibly made was in October 2011 (4 tonnes), and before that in February 1999 (3 tonnes). It doesn’t happen often, but it can happen. (as the FRBNY only discloses the total amount of gold in foreign accounts, we can only see deposits being made during a month with no withdrawals or during a month when deposits transcend withdrawals).  

To be continued…

Germany Repatriated 120 Tonnes Of Gold In 2014

The central bank of Germany, BuBa, has just released the numbers of their gold repatriation activities in 2014. More than expected the Germans shipped home 85 tonnes of gold from the Federal Reserve Bank of New York (FRBNY), previously BuBa hinted at withdrawing 30 to 50 tonnes from New York in 2014, from France 35 tonnes were returned. Below we can see an overview from BuBa of all repatriation activities since 2013:

Screen Shot 2015-01-19 at 11.15.20 AM
Source: Bundesbank
Screen Shot 2015-01-19 at 11.15.29 AM
Source: Bundesbank

There has been a lot of fuzz about the German gold repatriation schedule, which in 2013 was set to return 674 tonnes before 2020, when only 37 tonnes reached German soil in the first year. Many eyebrows were lifted in the gold space; is there any gold left in New York? Why is it taking seven years to repatriate a few hundred tonnes? Especially the fact only 5 tonnes were returned from the FRBNY in 2013 was suspicious. In my opinion it’s very strange only 5 tonnes returned in the first year, but as far as my intelligence goes this wasn’t unilaterally obstructed by the Fed.

More speculation went round when in November The Netherlands announced they had secretly repatriated 122.5 tonnes from New York. The FRBNY publishes on a monthly basis how much gold they hold in total as foreign deposits. When we learned The Netherlands had repatriated 122.5 tonnes somewhere in between January and November 2014, some suspected most of what was drained from the FRBNY, as published by year to date FRBNY data, was brought to The Netherlands and Germany wouldn’t meet its schedule for 2014. But because the FRBNY data lags a few months analysts could only speculate as they didn’t have the total numbers of 2014.

At this moment we have FRBNY data up to November.

FRBNY foreign gold deposits November 2014

FRBNY Nov 2014

January till November 2014 the FRBNY was drained for 166 tonnes, if we subtract 123 tonnes The Netherlands got out that leaves 43 tonnes for Germany. The fact Germany claims to have repatriated 85 tonnes from New York in 2014 means they must have pulled 42 tonnes from the Manhattan vaults in December. By the end of this month (January 2015) the FRBNY will release the foreign deposit data of December and we’ll see if the numbers match. If not, there obviously is “a problem”. Otherwise, everything is going to plan and we are only left to think about what reasons BuBa has to take seven years to repatriate 674 tonnes. Perhaps this time is needed for out great leaders to shape a new international monetary system. Who knows? It can’t be because of logistical reasons as hundreds of tonnes of gold are shipped around the world every year – for example, Switzerland exported 2,777 tonnes of gold in 2013.

More Confirmation Germany Continues To Repatriate Gold

In addition to a post I wrote earlier about the Bundesbank continuing to repatriate gold from the US and France, in contrast to a misleading article from Bloomberg suggesting the program was canceled, I present an email I just got in from Peter Boehringer, founder of Repatriate Our Gold in Germany:

Dear E-Mail partners: A quick info in English because I know there are many people
around the world waiting for gold repatriation news from Deutsche Bundesbank (BuBa) in 2014. I always said BuBa would continue their repatriations in Germany despite many
official and unofficial news outlets claiming the opposite.

We still have no quantitative news – but this came in 8am CET today (45 mins ago).
See here for original German language interview text of BuBa´s “gold exec” Mr Thiele.
*) My translation of the text below. Followed by my short comment.

“Bundesbank has delivered gold to Germany according to plan Also in 2014, Deutsche Bundesbank has brought gold from foreign storage sites to Frankfurt. ‘We are within our plan with our delivery of gold from the Fed and the Banque de France.’. BuBa-executive Carl-Ludwig Thiele told the German Press
Agency dpa in Frankfurt.”

Boehringer comment:

  • This is really all there is, all we have right now. I would personally call it “non-news” as usual in that Mr Thiele does not give out ANY new info which we did not have before. With the possible exception that Bundesbank now officially says what I said all along throughout the year: The gold repatriation is continuing – albeit not transparent and probably way too slow but with a rate larger than 0 tonnes in 2014…
  • We still do not know exact numbers.Thiele does not seem to have given out tonnages for 2014 (in the press release we only have 2013 numbers which had been known since Dec 2013).
  • Every number below 70-100 tonnes would be shamefully little – and therefore this is exactly the range I am expecting in the final announcement with numbers (due early 2015).

So it is business as usual with Bundesbank. Too slow, too little, not transparent: this
holds true both for its information policy on gold and for its repatriation efforts! The fight for repatriation and for receiving more info from BuBa will have to continue. And since BuBa is stalling and our institutions are not helping – we the owners of the gold will have to do the work on our own. To be continued (in 2015)… Happy Christmas to everybody!

*) 22.12.2014 08:00 Bundesbank bei Gold-Verlagerung im Plan Die Deutsche Bundesbank hat auch 2014 tonnenweise Gold aus ausländischen Lagerstätten nach Frankfurt gebracht. “Mit der Goldverlagerung von der Fed in New York und der Banque de France in Paris liegt die Bundesbank voll im Zeitplan”, sagte Bundesbank-Vorstand CarlLudwig Thiele der Deutschen Presse-Agentur in Frankfurt. Die Notenbank will bis 2020 mehr als die Hälfte ihrer zuletzt 3387 Tonnen in heimischen Tresoren lagern. Dafür sollen 674 Tonnen des Edelmetalls aus Paris und New York nach Frankfurt gebracht werden. Zum Start der Aktion holte die Bundesbank 2013 fünf Tonnen aus New York und 32 Tonnen aus Paris.

BuBa: Half of German gold reserves will be stored in Germany by 2020

Interview with Carl-Ludwig Thiele, Member of the Executive Board of the Deutsche Bundesbank, published in Handelsblatt on 19 February 2014.

Translation: Deutsche Bundesbank

Interview conducted by Norbert Häring and Jens Münchrath.

Mr Thiele, do you consider yourself a kind of psychotherapist of the German soul?

No, why should I?

Bundesbank President Jens Weidmann described the partial transfer of German gold from New York as a trust-building measure in Germany.You are the one responsible for organising this major logistical undertaking.

Indeed, we are inspiring trust by storing half of the 3,400 tonnes of gold in Frankfurt by 2020. Building trust also means being transparent. We were the first central bank to publish details of our storage facilities, including the respective quantities of gold stored there.

Is there a scenario in which gold could begin to be used in monetary policy?

A highly theoretical scenario would involve extreme turmoil on the foreign exchange markets. Germany safeguards its solvency through reserve assets. In addition to foreign currency, our reserve assets include gold reserves. This gold could be pledged or exchanged directly for foreign currency. That is also why we have left the other half of our gold reserves in New York and London. Although we thankfully do not envisage such a crisis scenario, central banks are designed for the long term.

In October 2012, you promised the German Bundestag that you would transfer a total of 150 tonnes of gold from New York to Frankfurt by 2015.In January 2013, you extended the time frame to 2020 and increased the amount to 300 tonnes. What time frame are you looking at now?

The plans are not contradictory. We specified our initial target in October 2012. In January 2013, we then presented a new gold storage plan and specified a new target that is considerably higher than the first. Instead of only 150 tonnes, we are now transferring 300 tonnes of gold from New York to Germany.

So both targets still apply?

We now consider ourselves bound to the new gold storage plan. But the three years have not yet passed. We shall wait and see. We are on the right track in any case.

But the members of the German Bundestag have acted on the assumption of the initial promise.The second has got a more long-term oriented time frame. Was your initial promise overly ambitious? In the first year, you only returned five tonnes from the USA.

It is not a question of “returning”. The gold is being transferred to Germany for the first time. Until 1998, only 2% of our gold, or thereabouts, was stored in Germany. In the first year, we transported five tonnes from New York. This year, we will transfer 30 to 50 tonnes, or perhaps even more, from New York to Frankfurt. And there is still next year to come.

Does that mean that the target of 150 tonnes is still attainable?

Since we are in the midst of an ongoing process, I would like you to ask me the question again in two years’ time. In any case, we will store half of the German gold reserves in Germany by 2020 at the latest.

Why are you content with such a low target for this year? Is the programme still experiencing teething problems in its second year?

No, it is not. We have planned the timing of the transfers in such a way as to ensure that 300 tonnes are transferred from New York to Germany by 2020 at the latest.

There are these rumours that either the gold in New York is no longer there or you do not have unrestricted access to it. Why have you not called in auditors or other externals to oversee the transfers in response to such rumours?

It astounds me that Handelsblatt pays any attention to such absurd rumours. I was in New York myself in June 2012 with the colleagues responsible for managing the gold reserves and saw for myself how our money is stored in the vault there. The Americans have never stonewalled or hindered us in any way. On the contrary, their cooperation has been most constructive in every respect. Our internal audit team was present last year during the on-site removal of gold bars and closely monitored everything. The smelting process is also being monitored by independent experts.

Does this also apply to opportunities to inspect the stocks? You said a year ago that discussions on the matter with the Federal Reserve Bank of New York were making good progress.

That is correct. We have enjoyed an excellent relationship of trust with the New York Fed for many decades. As regards the details of the contracts, however, we are bound by confidentiality which we cannot unilaterally break. From my visit to New York, I can tell you that a number of bars selected by us were removed, inspected and reweighed even while I was there. The inspections conducted by our internal audit team, during which an external auditor was also present, were also completed to our utmost satisfaction.

Was an external auditor present during your visit to the New York Fed gold storage facility in June 2012?

No, not during my visit. However, an external auditor was present for part of the time during the internal audit team’s inspection of stocks.

Did the gold from New York have to be melted down immediately?

The gold was removed from the vault in the presence of the internal audit team and transported to Europe. Only once the gold had arrived in Europe was it melted down and brought to the current bar standard. Some of the bars in our stocks in New York were produced before the Second World War. It was confirmed after the melting process, as anticipated, that these bars were absolutely fine.

The Federal Court of Auditors (FCA) sparked the debate by calling for an inspection of Germany’s gold holdings abroad. When you announced in October 2012 that part of the holdings were to be transferred to Germany, the FCA responded that this was a first step, but not a comprehensive procedure. Is the FCA now satisfied?

The FCA never demanded that the Bundesbank transfer gold to Germany. It was more concerned with extending its rights with regard to inspecting gold reserves abroad. The Bundesbank’s internal audit department now has rights it never used to have. The Budget Committee has acknowledged the FCA’s report, which concludes this discussion. Incidentally, the FCA examined the Bundesbank’s annual accounts for 2012 and found no irregularities.

The FCA claims it has no knowledge of newly agreed audit rights.

The FCA has access to all information at all times. I am sure the President of the FCA will be able to confirm this for you.

If the intention was to build trust, would it not have been better to postpone the smelting process so that you would have been able to present the original bars to skeptics?

Prior to transportation, the original gold bars were handed over to us in New York. Our internal audit team checked the numbers of the bars there and then against its own lists. Thevery same gold arrived at the European gold smelters that we had commissioned. This ought to demonstrate to everyone that such conspiracy theories are completely unfounded.

Calling in external auditors or critics was not an option?

The Bundesbank’s internal audit department is involved in the process from start to finish. Independent experts were present during the smelting process.

Are there any advantages for the Americans in storing gold for other nations? After all, they are protecting our reserves free of charge.

To answer this question, you need to look at the historical context. As you may know, gold reserves were established during the Bretton Woods fixed exchange rate system. Given the threat from the East at the time, it seemed the safest option was to store German gold as far west as possible. The gold was therefore stored in New York from the outset.

So the Americans are taking on high storage costs for nothing in return?

No, why high storage costs? The gold has been stored there for decades. The storage rooms already exist.

Security guards cost money…

It is not just our gold that they protect, but also that of other central banks. But that is a matter for the New York Fed.

Just over a year ago, you were asked whether storing gold with the victors of the Second World War was not perhaps an echo of the old Bonn Republic when Germany was not yet a fully sovereign state. Back then, your answer was rather vague. What is your answer today?

To my knowledge, gold was stored in New York, London and Paris mainly for security policy reasons. We transferred 930 tonnes of gold from London more than ten years ago without experiencing any difficulties with the Bank of England or upsetting German-British relations.  The same applies to the Banque de France and the New York Fed.

In Gold We Trust

Bundesbank Changes Gold Repatriation Schedule

One of the initiators of the German public campaign “Repatriate our Gold” is Peter Boehringer of “German Precious Metal Society” (est 2006). After lengthy efforts together with partner the “European Taxpayers Association”, the team finally, in January 2013, brought about Bundesbank´s decision to repatriate 300 tons of gold from the US and 374 tons from France  by end-2020. Because asking your gold back from the US being quite sensitive, the repatriation would be spread over an eight year period. This was the original allocation schedule for the German official gold holdings, 3390.6 tons, set up in January 2013:

………………… 2013 ……….. 2020
Frankfurt ……. 31% ………… 50%
New York ……. 45% ………… 37%
London ………. 13% ………… 13%
Paris ………….. 11% ………….. 0%

What I just found out, and what presumably few people in the English speaking world knew, was that the Bundesbank had made an earlier repatriation request in the fall of 2012, to ship home 150 tons  from the US in three years (ending in 2015).  So after January 2013 two repatriation schedules co-existed. They were not mutually exclusive – so most Germany expected to see back was 150 tons from the US by 2015 – and ultimately 674 tons by end-2020 from both the US and France.

bundesbank

This was the plan.. But in 2013 only 37 (remelted) tons of gold reached German grounds of which 5 tons from the US. Needless to say, this lifted a few eyebrows. The Bundesbank has now withdrawn the original schedule to repatriate 150 tons from the US before 2015, but continues plan B, to repatriate 674 tons from NY and Paris by end-2020.

The following is the translation of an article written by Peter Boehringer published on Goldseitenblog (click here to read the original post). It’s a response to a full three page title story that appeared in a German newspaper (Handelsblatt Feb 6, 2014, print version only, not online) on the latest developments regarding the gold repatriation schedule discussed in German politics.

German gold: Bundesbank moves away from specific repatriation schedule

by Peter Boehringer , Founder German Precious Metal Society
06-02-14, for Goldseitenblog

Due to new developments, the initiators of the Repatriate Our Gold action today publish a small update. The print version of the German Handelsblatt today (02.06.2014) published a substantial three page feature exclusively on the German Gold Reserves, widely known to be stored by the German Bundesbank, the Fed, the Banque de France, and the Bank of England. Under the ambiguous title “Silence is Golden,” no less than four Handelsblatt editors along with Norbert Häring, a senior and competent voice in matters of Gold vs Money, delivered a piece that is in parts pretty critical against the Bundesbank and addresses questions that are familiar to the readers of this blog.

Handelsblatt

Some of these are the same questions for which we have been labeled as paranoid conspiracy theorists by almost every mainstream publication from the beginning of our initiative in 2011-2012 right up to a few days ago. Questions which, from the perspective of the Bundesbank (BuBa), are apparently too delicate to be answered. But today, the usual rhetorical billy club of “conspiracy theory” is absent from the Handelsblatt piece. Apparently, the German mainstream publication is finally coming to the realization that it would make a ridiculous fool of itself, were it to continue to stick with its conspiracy theory vilification strategy in the face of such overwhelmingly critical BuBa-Gold inquiries from its very own readership, as well as from hundreds of reports from international observers and media, most recently even from the Financial Times.  By now, articles on the German gold repatriation demand of Repatriate Our Gold has even appeared in dozens of Chinese, Russian, American, Indian and African publications.  The German Gold, opaquely held in custody by the Fed & other central and currently worth more than 100 billion Euros, is not only the core component of BuBa’s balance sheet and the property of the German people, but it is also a geopolitical issue and an important founding stone of the suspected world fractional gold banking system.

The Handelsblatt writes today: “The policy makers are putting pressure on the Bundesbank.”

=> To which we reply:  German “Policy makes” have done almost nothing in the past 50 years.  After David Marsh in 1992 and Bruno Bandulet in 2002, and Martin Siegel and Dimitri Speck, Martin Hohmann in 2002 was the first POLITICIAN who at least posed questions – albeit without any results. The same holds for lawyer and member of parliament (MP) Peter Gauweiler. And as a staunch trans-atlanticist, his MP-colleague Mißfelder who currently serves as the German “federal commissioner for the German-American relationship” would never have jumped on the Fed-Gold topic had there not been the mounting public pressure and a need to relieve some of that pressure. In any case, “Policy makers” have not helped us a lot. But at least, a few weeks ago, Mr Mißfelder has finally and rightfully called for the retrieval of ALL foreign holdings of the German Bundesbank (i.e., 2300 tons instead of the planned 700 tons; totally new “dimensions” for BuBa´s imagination…)!

Handelsblatt: “The repatriation falters – for enigmatic reasons.”

=> Don’t let the BuBa hear that Mr. Häring, otherwise you will quickly be labeled a conspiracy theorist.  Nothing is “enigmatic” in the cellars and books of the BuBa and the Fed, absolutely nothing! We are talking (quoting BuBa) about “partner-banks whose integrity is not be questioned,” much like the purity of gold itself.  Let that be heard! ;-)

Handelsblatt: “The Bundesbank no longer feels bound to the [concrete repatriation commitment time table] as they now admit for the first time [towards the HB].”

=> Interesting – because this is in fact the first time that the BuBa is partially revoking their promise, made to the German Bundestag (parliament) in 2012, for a full inventory inspection and a repatriation of “150 tons from New York by 2015″. After the 5 tons retrieved from NY in 2013 and the 30-50 tons announced for 2014, the BuBa seems to already KNOW today that not even 100 tons (= 6.7 % of the portfolio) will be forthcoming from NY in 2015! Honi soit qui mal y pense.  (“Shame on him who thinks evil of it!”)

=> Indeed, in January 2013 BuBa has come up with a new (less specific) repatriation concept that would retrieve 300 tons from NY & Paris by the end of 2020. However, the concrete repatriation time table from the Bundestag hearings of 2012 had thus far not been withdrawn – which is why the above quoted admission of the unfeasibility of repatriation by 2015 is quite remarkable!  And which naturally feeds our mistrust of the Fed’s ability and willingness to deliver the gold.

Handelsblatt: “Due to ‘logistical challenges,’ the BuBa no longer feels bound to its promise to the Bundestag.”

=> We have already dealt exhaustively with this issue in previous articles.  If even the ridiculously low amounts of 80-100 tons of gold per year are too challenging for the Fed and BuBa to transport (and that despite Weidmann’s request for help from the BIS), then one must wonder how back in 2000-2002 nearly 1000 tons of gold were delivered from the Bank of England to Frankfurt without all this fuss and public whining.  The BuBa itself has been claiming this successful transportation performance of the early 2000s since 2012.

=> And quite apart from that, the BuBa is of course free to simply ask the Fed for a swap of their bullion with a European gold holder or international dealer, upon which the bars would simply be retrieved from London, Zurich, or even Frankfurt. No physical transatlantic transport required – and everything guaranteed to be LGD compliant!  The disadvantage would be that we paranoid gold historians would never get to see in Frankfurt the old German bullion from the 1950s and 1960s that are held at the Fed (since they would be swapped with European gold). But that would be a small disadvantage given that the BuBa has already refused publication of any photos or number lists of the already allegedly repatriated and supposedly already re-melted original Fed bullion, due to “security reasons.” In fact, from the perspective of the BuBa, the swap solution would have the great advantage that we would finally have to put to rest the silly and delicate questions about the whereabouts of our original German bullion bars.  But no – even such logistically and legally simple options, by which 2300 tons of overseas gold could be “home by Christmas” are not good enough for BuBa. Honi soit qui mal y pense. (“Shame on him who thinks evil of it…”)

Handelsblatt: “Peter Gauweiler will no longer accept these delay tactics.  He calls for the ‘immediate on-site inspections of the gold stocks and their immediate delivery to Germany’.”

=> Dear Mr. Gauweiler, we happily extend our invitation to you once again to sign the Repatriate Our Gold initiative. Your clearly formulated demands are the same as ours.  Since 2011.  Let us finally reinforce our demands with the will to actually implement them!

Handelsblatt: “In 2012, the auditors of the Bundesbank could visually inspect the German bullion.”

=> It’s Groundhog’s day again.  This statement is not new.  And it remains utterly blank and vague. Furthermore, the BuBa refuses to say anything about who these ominous auditors were (names), when and what exactly they audited, what “visually inspect” exactly means, what inspection reports have been produced and who signed them – in other words, why all this information is being held “confidential”?

=> But wait – we learn some more:  BuBa board member Thiele “personally visually inspected” the German gold stocks in June 2012 in NY.  Well, Mr. Thiele, did you arrive at any counts and inspection results?  And apparently “beyond that” you have also been “in the vaults in London and Paris.”  Did you indeed meet the Queen there during a walk in the depths of the BoE?  Everything was fairy-tale-fabulous there, was it not? And your spokesman also tells us more: “Mr. Thiele could see everything that he wanted to see.”  There is but one question that arises:  what did he WANT to see?  Ninety years ago your predecessor Hjalmar Schacht explicitly wanted to see NOTHING, although at the time the former Fed chairman B. Strong simply could not find any German gold at the Fed (for “fans” of the German Reich’s gold: these were NOT the 3400 BuBa-tonnes of today!).  At that time Schacht had said succinctly: “It doesn’t matter Mr. Strong – I know you are good for it (the replacement gold).”  Hmm – we wonder whether Janet Yellen is also “good for it” in the year 2014?

Handelsblatt: “In addition, an external expert has observed the re-melting of the gold bars.”

=> Oh yeah, baby.  That sounds very good, Mr. BuBa Speaker (anonymous).  If you would now kindly provide and publish a NAME of this “expert”, his exact procedure for the “counting observation”, his signed report and his expertise – after your recent refusal to provide this information to the Handelsblatt upon their request.  Honi soit qui mal y pense.  (“Shame on those who..”)

Let us close this small update today not with our own conclusion, but with these “no-longer-conspiracy-theoretical” findings from the mouth of MP Gauweiler:

“I wonder why the Bundesbank cannot repatriate the gold and then allow it to rest in an appropriate form [as reported by GS Blog from 25.12.2013 ].  My suspicion: Apparently the bars are no longer untouched and available.  This [leads to] the presumption that the gold bars, while in storage, have been used in a manner that lacked transparency.”

=> Conclusion of the Handelsblatt: “Transparency as promised by Bundesbank looks different.”  To be continued.

******
An old piece of advice – relevant both for individuals and for our Federal Bank board managing our gold.  The convenience of naive ignorance will soon cease to work:

“There are two ways to sleep well at night: be ignorant or be prepared.”