After WWII, Germany deposited about 300 tons of gold with the US Treasury and/or Federal Reserve in order to protect that gold from seizure by a possible invasion by the Soviet Union.In January of A.D. 2013, Germany asked to view its 300 tons of gold. The Federal Reserve refused to allow Germany to simply see its gold.
In February, 2013, Germany demanded that the US return the 300 tons of gold to Germany. The US answered that it would take about 7 years for all of Germany’s gold to be returned.
Insofar as the US wouldn’t let Germany see its 300 tons of gold and wouldn’t return that gold in less than 7 years, various reasons were offered to explain the mysterious delay.
However, most people concluded that the 7-year delay was because the actual supply of gold held by the Federal Reserve and/or US Treasury was at least far less than claimed, and may have been substantially or even almost completely depleted. I.e., the reason the US couldn’t show or deliver Germany’s gold was that the US had secretly loaned, leased or sold that gold and it was gone. Therefore, Germany would have to wait for 7 years while the US slowly acquired another 300 tons of gold to return to Germany.
• The US did return 37 tons of gold to Germany in A.D. 2013. However, initial reports claimed that the US had “refined” those 37 tons before they were returned to Germany. Later, Germany denied that the US had refined those 37 tons before they were shipped to Germany, and instead claimed that Germany refined them after they arrived.
Both versions agreed that the 37 tons of gold had been refined by somebody—but it wasn’t clear if the “refiner” was the US or Germany.
Bill Holter recently reported on the mystery of who refined the German gold:
“We had several news items last week that boggled the mind. The most astonishing was the Bundesbank doing a 180 degree U-turn and saying that the [37 tons of] gold that was delivered [by the US] to them last year was not refined in the US; it was done in Germany after the arrival. This of course raises many more questions than already existed.
“Originally when it was ‘told’ that the US refined the gold, the simple question of “why?” was out there. This was passed off by Germany by explaining that these bars needed to be “LGD” (London Good Delivery) 400 ounce bars. “
Get that? Germany demanded 300 tons of gold be returned. The US said they’d return it all in 7 years but did return 37 tons (about 12% of the 300 tons owed) in A.D. 2013.
Those 37 tons were freshly “refined”. As a result of that refining, the original weights, serial numbers and insignia engraved on the exterior surfaces of Germany’s original gold bars were lost. Technically, after the 37 tons of gold had been refined, there’d be no way to prove that the 37 tons of freshly-refined gold returned to Germany was the same gold that Germany had deposited 50 years ago.
Who cares, right? 37 tons is 37 tons. So long as Germany deposited 37 tons and received 37 tons, Germany should be unaffected by the source of that gold.
While it’s true that Germany would be unaffected by the “refining,” the US government might be affected enormously.
Why? Because it was originally claimed that the US “refined” the original German gold bars to meet “LGD” standards before the 37 tons of gold were sent to Germany. If that were true, it would raise some interesting questions. For example, why would the US bother to “refine” German gold? The refining process would be costly and take time. There’d be security risks insofar as Germany’s original gold bars would have to be transported from their ultra-secure US vault to some US refinery before being shipped to Germany.
Besides, if Germany had deposited some irregular gold bars with the US fifty years ago, what difference did it make to the US whether those bars met today’s “LGD” standards? Just give Germany the same irregular bars that they deposited and leave it to Germany to refine them or not as they saw fit.
• Suppose you borrowed your brother-in-law’s 1992 Ford last Friday. Would you feel obligated to return a brand new Cadillac to your brother-in-law on Monday?
I wouldn’t. If I borrowed a 1992 Ford, I’d return the very same 1992 Ford that I borrowed. I might fill the gas tank, wash the vehicle etc. But I’d still return the same car that I’d borrowed—unless I’d wrecked or otherwise lost my brother-in-law’s Ford. Then, I’d return a different, possibly newer and more valuable car.
Similarly, if Germany deposited 37 tons of irregular gold bars with the Federal Reserve 50 years ago, I’d expect the US government to return the very same irregular gold bars when Germany recently asked for the return of its gold. So, why didn’t the Federal Reserve/ US Treasury simply return the same gold bars that Germany deposited 50 years ago? Why did we go through the “newly-refined” story?
The answer is almost certainly that the US no longer has the same gold bars it received from Germany. If so, the reason that the US needs at least 7 years to send all 300 tons of gold back to Germany, and had to “refine” the 37 tons they sent in 2013 is that the US no longer has the German gold. Worse, the US might be so short on gold that they can’t even cough up 300 tons.
Therefore, in order to conceal the fact that Germany’s gold is gone, the US had to claim to “refine” the original gold bars in order to explain why they didn’t return the original gold bars. If the original gold bars were “refined” that would explain why the original weights, serial numbers and insignia, etc. the were engraved into the original bars were no longer present.
That speculation is troubling because you’d have thought that if Germany deposited 300 tons of gold bars marked with their weights, serial numbers and German insignia, the US would carefully guard and hold those exact, same gold bars for Germany to reclaim whenever they liked. Insofar as the US is unable to return all 300 tons in less than 7 years, and insofar as the 37 tons that have been returned have also been “refined,” it implies that Germany’s original gold is gone. If the US can’t return Germany’s gold, how much other gold is missing? Could it be that the US gold treasury is nearly empty?
Which leaves us to ask how much gold does the Federal Reserve and US Treasury really have. If the original German gold is gone, what about the other 1,000 tons stored on behalf of foreign governments? What about the 8,200 tons of gold that’s allegedly been stored for the American people? How much gold really remains at Fort Knox and the New York Federal Reserve’s vault?
• To avoid the suspicion that the US gold treasury was about empty, the US would have to deny reports that it refined the 37 tons of gold before they were sent to Germany in 2013. If that gold was not refined, it would still bear the weights, serial numbers and insignia engraved in the gold bars as existed 50 years old. Those engravings would prove that the US had not sold/leased/lost the German gold and we might still be confident that the US held all of the gold it claims to hold.
However, Germany initially reported that the US had refined the gold and erased all of the original weights, serial numbers, insignia etc. that had been on the original gold bars.
But, then, Germany figuratively replied, “Oh, wait . . . . Gee, now that we think about it, contrary to our original reports, the US did not refine the original, irregular, German gold bars before they shipped the 37 tons of gold to us. Instead, we Germans refined those 37 tons after we received the original, irregular gold bars from the US. Silly us, hmm?”
The difference between the two stories is this: If the US refined the 37 tons delivered to Germany, then the US would not have returned the same gold bars that Germany had deposited 50 years ago. The refining story could be a pretext to justify sending Germany gold other than the same gold bars that Germany had originally deposited in the US–but that story would raise questions about how much gold remained in the US and Federal Reserve treasuries.
It might therefore be presumed that the US had breached its custodial obligations and had somehow lost, leased or sold the original German gold (without Germany’s approval) and was attempting to replace part of that original German gold with freshly “refined” gold from a different source. That would imply that the US may be about out of gold.
On the other hand, if the 37 tons of gold bars were refined after they arrived in Germany, that would imply that Germany had received 37 tons of their original gold bars. If so, we could presume that the US was still holding the 263 ton balance of German gold, another 1,000 tons of gold deposited by other foreign countries, plus 8,200 tons held for the American people Implication? The US gold treasury might still be filled with thousands of tons of gold.
I.e., if Germany “refined” those 37 tons of gold, we’d have no reason to suppose that the US Treasury was about out of gold. It therefore seems possible and even probable that Germany agreed to change its story about who refined its gold in order to help refute the suspicion that the US and Federal Reserve are about out of gold.
• If all of the original German gold is gone, what’s the source of the “new” 37 tons that the US recently refined and sent to Germany?
One possible answer is that the gold that’s being refined in the US before it’s sent to Germany is gold that’s been recently mined out of the earth. If that’s true, it would again imply that the US Treasury and Federal Reserve gold vaults are fundamentally empty.
The need to send freshly-mined gold to Germany might also explain why it will take 7 years to restore the 300 tons of German gold. The 7 years may correspond to some US government projection as to how long it will take to buy enough freshly-mined gold to replace the gold that’s owed to Germany and other foreign nations.
• Finally, if the US government is replacing foreign-owned gold bars with freshly-mined and freshly-refined gold bars, that could explain why the price of gold has been so brutally suppressed over in A.D. 2013. Government doesn’t want to pay full, free market price for tens of tons of freshly-mined gold in order to repatriate the gold held by in the US for foreign countries. Would government rather to replace 300 tons of gold at $1,900 per ounce or at $1,000?
The answer’s obvious.
This speculation about the “mystery” of the German gold may seem improbable, but note that the German demand for its 300 tons came about the same time the price of gold was $1,700 per ounce. Since then (and while the US delivered 37 tons of gold to Germany) the price of gold fell over 30%. Is that a coincidence? Or is it evidence that the US gold treasury is just about empty and government is desperately scrambling to secretly buy freshly-mined gold to conceal that void?
If American gold vaults are about empty, how much longer can that secret be concealed from the world?
If the world discovers that the US is not only out of credit (the Federal Reserve is buying 70% to 80% of recent US Treasury bonds) but also out of gold, what do you think will happen to the perceived value of the US dollar?
What will happen to the US economy?
What will happen to the price of gold?