We are looking for Europeans of different nationalities that can speak about the refugee invasion in your country and how this REALLY is affecting you. Are you in Hungary, Greece, Germany, France, Italy, Austria or another country being heavily invaded? Please reach out: views@redicecreations.com or @rediceradio We want to speak with you!

Dollar Collapse: Where is Germany’s Gold?
2013-02-07 0:00

By Peter Schiff | GlobalResearch.ca

The financial world was shocked this month by a demand from Germany’s Bundesbank to repatriate a large portion of its gold reserves held abroad. By 2020, Germany wants 50% of its total gold reserves back in Frankfurt – including 300 tons from the Federal Reserve. The Bundesbank’s announcement comes just three months after the Fed refused to submit to an audit of its holdings on Germany’s behalf. One cannot help but wonder if the refusal triggered the demand.

Either way, Germany appears to be waking up to a reality for which central banks around the world have been preparing: the dollar is no longer the world’s safe-haven asset and the US government is no longer a trustworthy banker for foreign nations. It looks like their fears are well-grounded, given the Fed’s seeming inability to return what is legally Germany’s gold in a timely manner. Germany is a developed and powerful nation with the second largest gold reserves in the world. If they can’t rely on Washington to keep its promises, who can?

Where is Germany’s Gold?

The impact of Germany’s repatriation on the dollar revolves around an unanswered question: why will it take seven years to complete the transfer?

The popular explanation is that the Fed has already rehypothecated all of its gold holdings in the name of other countries. That is, the same mound of bullion is earmarked as collateral for a host of different lenders. Since the Fed depends on a fractional-reserve banking system for its very existence, it would not come as a surprise that it has become a fractional-reserve bank itself. If so, then perhaps Germany politely asked for a seven-year timeline in order to allow the Fed to save face, and to prevent other depositors from clamoring for their own gold back – a ‘run’ on the Fed.

Now, the Fed can always print more dollars and buy gold on the open market to make up for any shortfall, but such a move could substantially increase the price of gold. The last thing the Fed needs is another gold price spike reminding the world of the dollar’s decline.

Speculation Aside

None of these theories are substantiated, but no matter how you slice it, Germany’s request for its gold does not bode well for the future of the dollar. In fact, the Bundesbank’s official statements are all you need to confirm the Germans’ waning faith in the US.

Last October, after the Bundesbank had requested an audit of its Fed holdings, Executive Board Member Carl-Ludwig Thiele was asked in an interview why the bank kept so much of Germany’s gold overseas. His response emphasized the importance of the dollar as the world’s reserve currency:

Thiele’s statement can lead us to only one conclusion: by keeping fewer reserves in the US, Germany foresees less future need for “US dollar-denominated liquidity.”"Gold stored in your home safe is not immediately available as collateral in case you need foreign currency. Take, for instance, the key role that the US dollar plays as a reserve currency in the global financial system. The gold held with the New York Fed can, in a crisis, be pledged with the Federal Reserve Bank as collateral against US dollar-denominated liquidity.”

History Repeats

The whole situation mirrors the late 1960s, during a period that led up to the “Nixon Shock.” Back then, the world was on the Bretton Woods System – an attempt on the part of Western central bankers to pin the dollar to gold at a fixed rate, while still allowing the metal to trade privately as a commodity. This led to a gap between the market price of gold as a commodity and the official price available from the Treasury.


Read the full article at: globalresearch.ca

Related Articles
German Gold Claw Back Causes Concern
Uh Oh: Germany Wants to SEE its US Gold
Gold bars that can be used as emergency payment
Using insects to search for gold
Germany Repatriating Gold From NY, Paris ’In Case Of A Currency Crisis’

Latest News from our Front Page

EU Must Get Ready: UN Predicts 1.4 MILLION Migrants to Arrive in Next Two Years
2015-10-04 3:05
Comment: The UN know and encourage these kinds of numbers to come into Europe, see comment below the article for more. The UN refugee agency (UNHCR) announced that it expects 700,000 migrants and refugees to reach Europe via the Mediterranean this year and predicted at least the same amount again in 2016. A spokesman for UNHCR Adrian Edwards confirmed that the figures ...
Oops: Did CNN Just Admit the U.S. Is Working with ISIS? & The ISIS Conspiracy
2015-10-04 1:33
Because we wouldn't want Russia to have an accidental skirmish with the U.S.-led ISIS coalition, now would we? Source: youtube.com The ISIS Conspiracy By Brandon Martinez The ISIS Conspiracy is a video series created by independent journalist and writer Brandon Martinez and is based on his book The ISIS Conspiracy: How Israel and the West Manipulate Our Minds Through Fear. In Part I Martinez ...
Sydney: Activists deliver petition to send refugees to PM's electorate
2015-10-04 0:19
Police confronted activists concerned with plans to resettle 12,000 Syrian refugees in Australia during a political stunt staged outside the house of Prime Minister Malcolm Turnbull in Sydney on September 27, 2015. Watch the video here: Sydney: PM urged to resettle Muslim refugees in eastern suburbs Members of the right-wing Party For Freedom delivered a petition urging the PM to resettle the ...
Umpqua Shooter Harper-Mercer Left Note: Wanted to “Be Embraced By the Devil” and “Welcomed in Hell”
2015-10-03 23:56
Has the media come out against left-hand path occultists who worship the devil yet? No, they continue to blame gun toting conservative "White-supremacists" for this one. Umpqua Shooter was identified as Chris Harper Mercer last night. Chris Mercer killed 9 people before being shot by police. Chris Harper Mercer was an atheist. (MySpace Image) The profile contains several Irish Revolutionary Army images ...
Jews In America Demand Washington Admit More Syrian “Refugees”
2015-10-03 23:09
In what is becoming a re-occurring theme here on this website, the organized Jewish community in America is once again openly and self-righteously demanding the United States accept as “refugees” even more unskilled, uneducated, backwards people who have no ties to or affinity towards this country and its traditions. As noted here recently, the organized international Jewish community, countless Jewish charities ...
More News »