Friday, January 18, 2013

The German Gold Puzzle

Commentators are scrambling to explain what the consequences are of the German gold repatriation announced yesterday.

If the Germans have their gold in other countries and it is just a 'barbarous relic' (Keynes) or a 'tradition' (Bernanke), then why the slow extraction from the USA and France and why no extraction at all from the Bank of England?

Here's what one commentator suggests:
"However, you could also choose to look at it this way:
In preparation for The Great Reset, the Germans do desire to repatriate as much gold as possible but they also don't wish to bring about The Reset any quicker than necessary.

So, they bring home "their French gold" but only do so at the rate of 50 tonnnes/year. Why? If it's just sitting in a vault and collecting dust, why not ship it all home over the next few weeks? What's the big deal?

And why leave "their English gold" untouched? Is it because all gold stored at the BoE can be leased, hypothecated and rehypothecated many times over, thereby making reclaiming it impossible?

And why bring back just 300 tonnes of "their American gold", again over the next 8 years? It shouldn't be that big of a deal to pull up a few pallets of "barbarous relic" from below the streets of lower Manhattan, drive it over to JFK and load it onto an airplane bound for Frankfurt. Should it?

Hmmmm. Maybe, just maybe, their French gold is long gone and the Frenchy-French need some time to come up with new supply to pay them back? Maybe the English gold has all been shipped to China and other points East, where it has been resmelted into kilo bars with official Chinese insignia?"
However this pans out, it appears that gold is set to be an important part of the puzzle when the global currency system resets. For the US dollar, this would be a godsend. They can then revalue the dollar against gold and inflate their debt away.

Watch this space.

Gold in New Zealand dollars: $2008.44 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $37.82 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
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