Gyroscopic Investing

Bundesbank to pull gold from New York and Paris in watershed moment

"Handelsblatt said the Bundesbank will announce on Wednesday that it intends to relocate the gold to vaults in Frankfurt, said by insiders to include parts of the old archive library. Germany has 3,396 tons of gold worth roughly £115bn, the world’s second-largest holding after the US. Most of the reserves were stored abroad for safety during the Cold War."

link:

http://www.telegraph.co.uk/finance/pers ... oment.html

AFAIK this will be one of the largest, if not the largest, delivery of physical Gold in the last 60+ years.

But gold is just a worthless yellow metal. Why would Germany spend so much money moving around this obviously obsolete asset?



IMO. The Germans are preparing for the possibility of the Euro going away. Again, I wouldn't be surprised if they had vaults full of German Marks ready to come out quickly if needed.

craigr wrote: But gold is just a worthless yellow metal. Why would Germany spend so much money moving around this obviously obsolete asset?



IMO. The Germans are preparing for the possibility of the Euro going away. Again, I wouldn't be surprised if they had vaults full of German Marks ready to come out quickly if needed.

Agreed on the Euro going away.  They have to be smart enough to see that the EU is unsustainable.  When the SHTF, Germany is not going to recap banks in Spain, Italy and Greece (or France for that matter).  Europe's banks have 3x the leverage that the US banks do.

Also, I agree that it's interesting that all of the "anti-gold" people, like the majority of the mainstream financial media, the investment industry and most brain-washed investors, ala the bogleheads, are so closed-minded about gold, yet gold is one asset class that is owned by Central Banks and governments around the world.

If gold was worthless, overvalued and obsolete, why then would CB's not be selling gold at this point?

I'm wondering if this creates a buying opportunity in some way, such as a gold fund priced in euros.

1NV35T0R (Greg) wrote: I'm wondering if this creates a buying opportunity in some way, such as a gold fund priced in euros.

I doubt it would as the gold is not going on the market and the news is already out.

Plus unfortunately the sources of the news so far tend to use a lot of hyperbole in these matters (ZeroHedge, etc.). So I'm still waiting to see how true this may or may not be. But again, if true, the markets already know about it so I doubt any pricing advantage could be had at this point.

craigr wrote:

1NV35T0R (Greg) wrote: I'm wondering if this creates a buying opportunity in some way, such as a gold fund priced in euros.

I doubt it would as the gold is not going on the market and the news is already out.

Plus unfortunately the sources of the news so far tend to use a lot of hyperbole in these matters (ZeroHedge, etc.). So I'm still waiting to see how true this may or may not be. But again, if true, the markets already know about it so I doubt any pricing advantage could be had at this point.

They might price it in but perhaps this is a longer-term play. It depends on how soon Germany feels that something could happen. Markets are efficient but I don't know how far they peer out into the distance.

craigr wrote:

1NV35T0R (Greg) wrote: I'm wondering if this creates a buying opportunity in some way, such as a gold fund priced in euros.

I doubt it would as the gold is not going on the market and the news is already out.

Plus unfortunately the sources of the news so far tend to use a lot of hyperbole in these matters (ZeroHedge, etc.). So I'm still waiting to see how true this may or may not be. But again, if true, the markets already know about it so I doubt any pricing advantage could be had at this point.

What if Obama/Bernanke do something like Nixon did...in refusing the French?

#NotPricedIn

murphy_p_t wrote:

craigr wrote:

1NV35T0R (Greg) wrote: I'm wondering if this creates a buying opportunity in some way, such as a gold fund priced in euros.

I doubt it would as the gold is not going on the market and the news is already out.

Plus unfortunately the sources of the news so far tend to use a lot of hyperbole in these matters (ZeroHedge, etc.). So I'm still waiting to see how true this may or may not be. But again, if true, the markets already know about it so I doubt any pricing advantage could be had at this point.

What if Obama/Bernanke do something like Nixon did...in refusing the French?

#NotPricedIn

You never know of course. But since we are not on a gold standard at this point I think it would be in a totally different league of theft. It would panic markets around the world and probably send all commodity holders running for the exits if they held anything of value in the U.S. I think it would a huge explosion and gigantic red flag that something very much worse is afoot. It would also touch off a huge international incident with all countries holding gold in the U.S. looking to retaliate at least economically, if not worse!

I've seen they're to pull all the gold from France...I didn't see how much they want from NY Fed?

"The move marks an extraodinary breakdown in trust between leading central banks..."

This is a key point, I think, even if NY Fed delivers all the German gold requested when they want it.

I read somewhere that a big part of the 2008 crisis was banks not trusting other banks for (overnight?) lending. I'm thinking there's a parallel here.

This is being reported by CNBC, so not just a zerohedge conspiracy. 

I think this has to signal something significant.  If I had to bet, I would say the Germans are preparing for the Euro/EU collapse, but of course these things could take several years to actually unfold.

murphy_p_t wrote: I've seen they're to pull all the gold from France...I didn't see how much they want from NY Fed?

They are requesting half, so about 1500 tonnes from NY Fed.  Scratch that, I think the news is still trying to be distilled.  Last I read it is 300 tonnes from NY and 374 tonnes from Paris.

http://www.bundesbank.de/Redaktion/EN/P ... serve.html

craigr wrote:

murphy_p_t wrote: What if Obama/Bernanke do something like Nixon did...in refusing the French?
#NotPricedIn

You never know of course. But since we are not on a gold standard at this point I think it would be in a totally different league of theft. It would panic markets around the world and probably send all commodity holders running for the exits if they held anything of value in the U.S. I think it would a huge explosion and gigantic red flag that something very much worse is afoot. It would also touch off a huge international incident with all countries holding gold in the U.S. looking to retaliate at least economically, if not worse!

I believe this would also trigger a worldwide run on physical delivery of allocated Gold positions, would it?  If you can't trust the NY Fed, who can you trust?

I think the important thing to take away from the CNBC article is they said they want to do this by 2020. So the time frame here is pretty far out and maybe not the emergency news first presented.*

So, as usual, I'm in a hurry up and wait pattern and won't change anything with my portfolio.





* But then again it could be an elaborate German ruse!

craigr wrote: So the time frame here is pretty far out and maybe not the emergency news first presented.*

Agreed that 300 tonnes over 7 years is much less of an emergency than the 1500 tonnes of immediate delivery initially reported.  I wonder if that was misreporting, or there were some emergency calls late at night to "urge" them to reconsider the amount/timeline.

This story/rumor, in my mind, is why HB recommended hold your gold in physical.

systemskeptic wrote:

murphy_p_t wrote: I've seen they're to pull all the gold from France...I didn't see how much they want from NY Fed?

They are requesting half, so about 1500 tonnes from NY Fed.  Scratch that, I think the news is still trying to be distilled.  Last I read it is 300 tonnes from NY and 374 tonnes from Paris.

http://www.bundesbank.de/Redaktion/EN/P ... serve.html

Thanks. Story from the horses mouth.

This story was floated a few weeks ago...essentially Germany would get something like 50 tons / year sent to Frankfurt.

murphy_p_t wrote: Thanks. Story from the horses mouth.

This story was floated a few weeks ago...essentially Germany would get something like 50 tons / year sent to Frankfurt.

Yes I posted on my blog about this yesterday in haste, then I went and looked at the sources (ZeroHedge and Prisonplanet) and thought that I should temper my comments with a disclaimer. The story is much less of an issue given the timeframe being reported (and omitted by ZeroHedge as usual to inflate significance of insignificance).

This is why I try not to read financial news!

However I still think it shows that gold is not the "worthless" metal people believe because these major central banks certainly think it's important to hold in their reserves.

some leaders die after asking for their gold
http://kingworldnews.com/kingworldnews/ ... _Gone.html

craigr wrote: However I still think it shows that gold is not the "worthless" metal people believe because these major central banks certainly think it's important to hold in their reserves.

Someone claiming gold is "worthless" is either woefully ignorant or a propagandist. Your cartoon illustrates the point well.

Pull back the curtain and what you find is usually a politician... this likely has the most to do with upcoming German elections. Merkel is running hard. In Germany, as in the US, there is a lot of noise about gold audits etc. This will diffuse that. Thats not to say there couldn't be other reasons AND other ramifications.

murphy_p_t wrote: This story/rumor, in my mind, is why HB recommended hold your gold in physical.

I pity the fool that don't own physical gold!

http://kingworldnews.com/kingworldnews/ ... age_1.html

Turk says public reason given to leave gold in NY is false.

murphy_p_t wrote:
Turk says public reason given to leave gold in NY is false.

The general rule of thumb is that most of what is said publicly by governmental officials is false. Certainly the movement of precious metals by various central banks would fall into that category.

For the record, I believe the gold is there

"Interestingly, neither the New York Fed nor the Banque de France charge Germany to store its gold."
http://www.forbes.com/sites/afontevecch ... cy-crisis/