The Mystery of the German Gold

20 Jan

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.

German Gold with Weight, Serial Numbers & Insignia [courtesy Google Images]

German Gold with Weight, Serial Numbers & Insignia
[courtesy Google Images]

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?


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25 responses to “The Mystery of the German Gold

  1. Frank Moorman

    January 20, 2014 at 11:07 AM

    Sur charges are un constitutional, secretive and only Texas has them. You don’t know they are there untill you are arrested. They are ad ons to any traffic tickets or other class C’s

    My friend, Steve Fromholz just passed away


  2. kanani

    January 20, 2014 at 11:44 AM

    Germany’s gold has been hypothecated out of existence.

  3. hskiprob

    January 20, 2014 at 11:54 AM

    Trust me, it’s in the mail.

    • J.M.

      January 27, 2014 at 2:40 AM

      @Trust me, it’s in the mail.
      Snail mail? Ok, I’ll wait because I do trust you.

  4. pop de adam

    January 20, 2014 at 12:15 PM

    I think the last estimate of the amount of gold in the entire world I came across was described as fitting within a cube with the dimensions, 20.4 meters to each side….

    A cubic meter of gold will weighs 19.3 tonnes. Tonnes to tons conversion, 19.3 x 1.10231 = 21.274583 tons per cubic meters.

    20.4 x 20.4 x 20.4 = 8489.644 cubic meters. I would imagine much of this is fugitive from banks and governments as coin, teeth, industry or jewelery.

    Germany is asking for 300 tons, this seems to compute to 6382.3749 cubic meters. Total world gold(8489.644 cubic meters) multiplied by tons per cubic meter(21.274583 tons per cubic meter) comes to 180613.635918452 total world gold in tons.

    US/fed gold holdings: 8965.638385 tons or 190740.217969668455 cubic meters

    I did this just because I was wondering as an exercise, I’m certain errors might be found, most of it was sourced from google searches and wikipedia pages. Something strange is afoot.


    • hskiprob

      January 20, 2014 at 1:48 PM

      From an article: “Strauss-Kahn declined to say in what currencies the Bank of France would invest the proceeds of its plans to sell up to 600 tonnes of gold reserves over a five year period — a strategy which it said last year it had agreed with the French finance ministry. She told the conference that Bank of France gold reserves amounted to 3,024 tonnes, comprising 55 percent of its total gold and foreign exchange reserves or 3.7 percent of gross domestic product.”

      It is better to stay in the analytical realm of Tonnes since most of the world, as noted above by France. trades gold in this or troy ounces for small sales.

      If there was enough gold up to 1933 to run the world’s economies, what made the central bankers/FDR all of sudden decide to switch to a fiat currency and confiscate the gold from Americans by abrogating various clauses of the Constitution. Question; who can tell everyone which Clauses of the Constitution and Bill of Rights were abrogated in 1933?

      • Adask

        January 20, 2014 at 2:09 PM

        The amount of gold is not particularly important. It’s the price of gold that matters. At $35/ounce there’s not enough gold to run the global economy, at $50,000/ounce there’s plenty. Then you might be able to start using grams as “coins,” etc.

      • hskiprob

        January 20, 2014 at 2:34 PM

        Divisibility, has long been known to be one of the main reasons the free market, when left to determine what people want to use as money, always has, for some 6,000+/- years selected gold and silver as the preferred medium of exchange. Gold for large transaction and silver for small transactions. Having paper receipts (currency) is fine for convenience, but you must be cognizant of the bankers who will continuously try to issue more receipts than they have in gold either through deceit or legislation. Fractional banking should be illegal, but special interest, especially banking generally get what they want, especially when giving the monopoly powers that central banking provides.

        Perhaps it is why governments and central bankers so often attempt to distort the prices of gold and silver through legislation, thus manipulating capital and consumer markets for their own self interests.

      • pop de adam

        January 20, 2014 at 2:20 PM

        There was an allowance If I recall correctly of up to 100 ounces per person, so I don’t think it was an absolute taking. Also they were “paid” for that which was turned in, while the Governtment/Fed later raised the price. Is a compelled trade a trade?

        Question; who can tell everyone which Clauses of the Constitution and Bill of Rights were abrogated in 1933?

        I would imagine this would have abrogated clauses pertaining to coinage/specie, and those related acts that actually define the dollar. If a dollar of gold was once equivilant to an ounce(not certain on this) and FDRs New Deal was paying out $24/ounce only to sell later at $34/ounce, I think it obvious to most people this is a manipulation of both gold and dollars. Violating laws and rules promulagated by the government. Redress of greivences vs. sovereign immunity, strangely remedy for these greivences was made at the revolution(so we are taught), as a result there should be no sovereign left to need this immunity.

        No one can know everything, because I may be ignorant doesn’t mean I don’t care or my resultant silence on a subject means I must agree, I just don’t know or was never asked.

      • hskiprob

        January 20, 2014 at 4:11 PM

        pop – Understand, It took me years of research and reading to learn what I know about economics and money. We are surely not taught this stuff in our education system. I did not mean in any way to demean you. It’s just good to see and here those looking for the truth.

    • pop de adam

      January 20, 2014 at 1:55 PM

      Caterpillar D9N Crawler Tractor weighs 93789.1 lbs or for convenience 46.8 tons. Germany wants 300 tons of gold. We could deliver 6.4 caterpillar D9N crawler tractors made entirely of gold to satisfy this request.

  5. pop de adam

    January 20, 2014 at 2:47 PM

    I remember TV shows such as the Little House on the Prarie and the Waltons that portrayed in bygone eras that if there was no change(coinage) to be had shopkeepers would often make note of credits and debts in a ledger in order to maintain liquidity if such credits and debt exchanges could not be maintained at par with eachother. Not really that different in the concept of circulating notes.

    If prices of gold/silver are maintained in dollars and dollars often conflated with the prices of the metals, coupled with the FRNs now so entrenched, is it any wonder that things might get bizarre?

    An ounce of gold was once considered a dollar, for people to describe this ounce in a plurality of dollars just seems so far out I can’t fathom that people would allow such fantasy. (The coinage act defined dollars as so many grains gold/silver, if i recall correctly this was roughly a little under an ounce plus the remainder as alloy for anti-wear properties.) For those that think that there might have just been to few of them in circulation and this was in need of remedy, I would remind them about the ability to use math(division particularly), ledgers and prices that everyone could practice.

    • hskiprob

      January 20, 2014 at 4:07 PM

      pop – you have the right idea. However, $1.00 was one ounce of silver and ounce of gold was first $20.00 and then it when to $50.00. If you can find the history of the various definitions of gold and silver, this will help you come up with those abrogations of the Constitution committed by the legislature and rubber stamped by the Judiciary. Weights and measures should give you a clue and No state shall coin money…….

  6. hskiprob

    January 20, 2014 at 2:57 PM

    Pop – Paid $26.00 on a $35.00 valuation. Great deal.

  7. james sparlin

    January 20, 2014 at 4:06 PM

    an ounce of gold was never considered a dollar. an ounce of silver was a dollar. 20 bucks per oz gold approx

    • pop de adam

      January 20, 2014 at 4:25 PM

      Thanks for the corrections, I has been a long while since I read much of this.

  8. Bill Deupree

    January 20, 2014 at 4:37 PM

    I wonder if Kyle Bass suggested to Univ. of Texas to take delivery a while back because of fear of not getting later(say, 2013).

  9. James Nicholas

    January 20, 2014 at 8:46 PM

    Edwin Vieira’s book, Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution, Sheridan Books, 2nd Edition, 2002,, is a remarkable work that I paged through in my self-taught history lessons. At 1,722 pages, I read the first 147 pages. Those contain the meat of the work. Every U.S. Congressional Act concerning money, legal tender, dollar, coinage of both gold and silver…this tome is a mind-bender. Because I was not educated with ‘truth’, just kaleidoscopic images of facts, and then told to make my own dream of America…not a good way to “get smart”. But this is the source for any and all regarding money–IMHO..

    • hskiprob

      January 21, 2014 at 2:31 PM

      James, Excellent recommendation – I have not read it but Edwin Viera is considered by many to be one of the better non-fiction living authors in the Americas. I think he was awarded some prestigious award a couple of years ago. He writes for the Independence Institute, an economic and educational think tank I believe is also one of the better groups.

      • James Nicholas

        January 21, 2014 at 6:24 PM

        Few books provided such a coherent history of U.S. monetary details. Again, the first 150 pages are all I digested. The remaining I simply scanned over. My local public library is the best. Among other details within his work are the various definitions of gold and silver (mostly regarding their subsequent purity of particular specie of coinage). Your observation of such in one of your earlier posts are expounded upon in this work.

  10. Martens

    January 20, 2014 at 11:42 PM

    Your conclusion that most of Germany’s gold can’t be returned because it’s been lent or sold seems very plausible.

    Minor detail, however: the gold was on deposit with the Federal Reserve, not the US government.

    • hskiprob

      January 21, 2014 at 9:07 AM

      Didn’t the Allies defeat Germany? We should share in the gold as repayment for the war costs.

      • Yartap

        January 21, 2014 at 6:50 PM

        I’m still waiting on Colin Powell’s promised oil revenues to pay for the Iraq War.

  11. Gary

    January 21, 2014 at 12:22 AM

    Hi Al: perhaps this was Germany’s gold held in reserve at the bottom of the World Trade Towers on Sept 11………………pffffff! gone in a plume of smoke

  12. Yartap

    January 21, 2014 at 6:44 PM

    The Goldsmiths are at it again!


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