Germany’s Gold Stockpile – Where is it?

News Flash…

Last week the German Federal Accountability Office ordered the Bundesbank to perform audits including physical inspections on all national gold holdings held on their vast gold reserves abroad. Many are also calling for physical testing on portions or random selections of the bullion. They demand to know where their nation’s gold is, if its purity is 100% or fake (such as tungsten filled bars), how much actually exists in-whole or in-part and they want it all back.

Germany’s national gold reserves are reportedly the second highest amount in the world, weighing in at 3,396 tons. This gold is held (supposedly) within the vaults of the Federal Reserve in New York as well as central bank vaults in Paris, London & Frankfurt. The last time any reported accounting was taken of Germany’s gold reserves was back in 1979-1980 according to a report from FT Alphaville. It appears that the Bundesbank has always been satisfied with only “written confirmation” of all its holdings held inside the various depositories. Furthermore, this practice has been going on for decades.

The Bundesbank let it be known to the GFAO they do not agree with their order to audit the nations bullion reserves. It should also be pointed out that the GFAO has only limited advisory power; they can’t force or demand that the Bundesbank follow its recommendations for inspecting or repatriating the bullion. The Bundesbank stated however that they will comply with the GFAO’s decision by verifying its gold reserves and to ship 50 tons per year back to Germany (over a three year period) for physical inspections.

A senior editor from CNBC had stated it doesn’t matter if Germany’s share of the gold held at the Federal Reserve actually exists in full or part, nor even if it is pure. For all intensive purposes as long as the Federal Reserve says it is in their possession, so long as everyone simply acts or pretends that it does exist, it’s as good as there.

Germany’s gold regardless if it’s actually there or not, could be sold, leased out, used for collateral, even used for extinguishing liabilities or counted as bank capital because now it’s all under the Fed’s control.

According to James Turk all the reserves held by Germany have disappeared. The reason was that all of Germany’s gold was previously leased into the marketplace through “Bundesbank leasing activities & swaps.” All vaults once containing Germany’s gold, have been empty since 2001. James Turk is stating that it was actually the Germans who are responsible for the complete loss of their own bullion stocks. This would defend why the Bundesbank does not agree with the GFAO order to perform audits & inspections. Why is the Bundesbank trying to hide this? Who are they partnered up with?

James is not certain if any amount of the leased gold ever made its way back into the vaults they once came out of. As for his accusations, James is offering up proof. There was an article piece written by James Turk in 2001 titled “Behind Closed Doors” in which he exposed that Germany’s gold was in-fact missing. All the proof is contained within this incredible article. READ the article below:

This past December in “The Smoking Gun” I provided substantive proof that the Exchange Stabilization Fund was intervening in the gold market… Behind Closed Doors

What’s Needed To Propel Hard Assets HIGHER?

One of the most fundamental laws of human nature is to never willingly inflict pain upon one-self. That being said, could the day of reckoning simply be avoided all together? Should a catastrophic event take place would the outcome be worse, because the masses were in denial and chose to delay the inevitable, by holding onto a false reality? This theory affects countries too, because the perception to embrace austerity on a nation-wide level goes in complete opposition to everything humans understand or believe.

In the eurozone, Spain’s economy is headed into a death spiral, unemployment well over 25% with the under 25 crowd, over 50%. 3rd quarter reports show nearly 6 million now out of a job. The Prime Minister faces hard choices of either allowing Spain to go bankrupt or accept austerity. Spain hopes the ECB will buy its debt; otherwise there would be no more market for private debt unless yields rose into the hundreds of basis points. The Prime Minister will either allow the ECB to help by taking control over Spain’s fiscal authority or austerity by way of a balanced budget thus refusing to allow the ECB to buy its national debt. Either decision doesn’t make for a happy ending.

On the other side of the Atlantic America faces a similar outcome. With America’s 3rd quarter GDP report now out growth is at an ultra low 2%, with inflation expanding. Inflation has now doubled from 1.5 percent in the 2nd quarter to 3 percent in the 3rd. Come January the US still faces the fiscal cliff which if not properly acted upon and soon, will toss the economy back into a tailspin & a deep recession.

Do we severely cut spending now, in hopes that our debt to GDP ratios will come under control. Or continue spending & borrowing until total chaos occurs within the bond and currency markets. The dilemma being to accept austerity at this point, would allow recessionary economies to fall into a much deeper hole where getting out would be impossible. The fact however, like it or not, is that austerity is unavoidable.

The natural economic forces of depression and deflation are the main reasons that austerity is never voluntarily chosen. As humans we instinctively choose the path of least resistance. That path in this case is to spend and borrow until you’re finally cut-off by the creditors. As we sit back and choose the path of least resistance, expect to see a swift acceleration to occur in the global money supply.

With rapid money supply growth, the value and purchasing power of the dollar will drop, inflation will continue to rise. Hard assets such as gold, silver and their mining stocks will continue to move to the up-side. This will occur as America and the rest of the world, both run out of time and continue rejecting their options and opportunity’s to curb their individual spending and borrowing habits. Were well past the mid-point now (point of no-return), with global central bank confirmations to continue printing their currencies to infinity. The clock is counting down.

In the end… Banks will collapse, governments will fail, while those holding hard assets survive and come out on top.

Personal Wealth Preservation –

As Always…
If you have not yet taken the necessary measures to safeguard your existing assets, start now. Be flexible, yet vigilant, this allows you to react immediately when key events in the marketplace either unfold or change quickly.

Preserving the safety of individual wealth can never be guaranteed, when exposed to additional market volatility and further market declines. However, when holding real “hard” assets such as physical gold or silver, they will consistently act as a hedge against any destructive monetary forces, while continuing to seek their true value. Thus constantly fluctuating with market volatility in terms of fiat currencies. History has always prevailed, hard assets are always the last and final store of value when everything else all around, has failed.

In the equities markets, understand owning (mining shares) or precious metals “in-ground” while being good investments during these high risk economic times, are always subject to various counter-party risks, however owning physical precious metals “above ground” all counter-party risks.

Tom Genot –
 

Photo Credits: European and german flags in front of Reichstag By Mark Hillary (Flickr: Deutscher Bundestag – German Parliament) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons