Germany holds 1,536 tons of gold at the sub basement of the New York Federal Reserve. That amount constitutes about half of all of Germany's gold holdings. With all the financial trouble happening in the world, talks that Germany wants to repatriate it's gold held at the NY Fed is intensifying.(Der Spiegel article).
If Germany does this, it would send a major ripple throughout the world. See Germany is one of the world's largest economies and the largest economy in Europe. If it repatriates its gold, it would send a message that it want in its posession its wealth. Germany would be saying that they do not trust having its gold in the US and that it feels it is safer in it's own hands. Already, Venezuela repatriated its gold. If Germany does it, other countries will surely follow and there could be a run.
Another major problem is that the Fed refuses to even let Germany see its own gold. They claim that "?in the interest of security and of the control process," Germany cannot see its gold.
This is extremely disturbing and only further squells the rumor that the NY Fed may not actually still have the gold in its posesssion.
"Such intense secrecy fuels legends. Many conspiracy theorists have suspected for decades that the German gold has long since disappeared. Others believe that it has been lent out. They contend that there are only promissory notes of little worth stored in the bank's vaults," said Der Spiegel.
To help alleviate concerns the Deutsche Bundesbank (German for German Federal Bank) is seriously considering taking back home 150 tons of gold for inspection. Doing so may provide some temporary assurances. However, if the European financial situation worsens, look for a call from even more drasting measures.
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