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Is (almost) All of the German Gold Lost?

In an extremely revealing interview Peter Boehringer a German gold expert and head of the German gold repatriation movement talks about the current state of the German gold reserves. His evidence seems to suggest that it is possible that all/but 77 tons of the 3384 tons of German gold is lost.

On the 20 July an interview with Peter Boehringer was published on YouTube (https://www.youtube.com/watch?v=jkZa0zMcEU8). He is interviewed by Helmut Reinhardt, a journalist from Cashkurs, a German business media network. They talk about his recent book "Holt unser Gold heim" (Bring back our gold - in German only). This is also the name of the German political initiative headed by Peter Boehringer to put pressure on the Bundesbank to be transparent about the central bank gold and to repatriate it.

After 20 years of fruitless enquiries with the Bundesbank, this initiative started in earnest in 2011 with the objective to find out what the situation is with the German gold, where it is stored and to advocate its repatriation. The Bundesbank would neither tell individual politicians nor the people where the gold is located, how much is at what location and how much gold is kept in Germany. The German government released misleading statements about the gold.

Until the collapse of the Soviet Union in 1990 the official stance was that the gold would be safer in the USA (1537t), in France (339t) and the UK (438t) because Germany was in danger of invasion. In October 2012 for the first time the Bundesbank revealed the locations where the gold is kept. On January 16 2013 the Bundesbank under increasing public pressure decided to repatriate half of the gold held abroad. The time frame for the repatriation was from 2013 until 2021.

It amazed experts that it would take eight years to repatriate 674t (1035t was claimed to be already in Germany without providing any evidence). In 2013 allegedly 37t of newly cast gold bars were repatriated to Germany from Paris (32t) and New York (5t) (no evidence provided). According to Bundesbank bookkeeping at as 31 December 2014 (now on the Bundesbank website) 1192t of gold was in Germany. That leaves 2192t of gold in foreign locations, a quantity that would fit into one aeroplane, ship or train. The news about the melting and recasting of German gold raised many eyebrows because this process made it impossible to verify whether the original gold bars were returned, or whether scrap gold from somewhere else was used to make the delivery. Oddly enough it was not the Bundesbank but the German Bild Zeitung that informed the public in its Christmas release. Very few people know that the Bild Zeitung, the best selling daily in Europe, was founded after World War II by the CIA with $1,000,000. Every journalist who works at Bild has to swear lifelong loyalty to the USA and to Israel. This commitment obviously finds its reflection in the newspaper content.

Peter Boehringer was asked what the present day role of gold in a paper currency system was. He quoted the Bundesbank: "Gold is an important part of our currency reserves, for the eventuality of currency turbulences and -crisis". Mr Boehringer continued: "Gold is the ultimate money, the only money without counter party risk". He called central bank gold the iron reserve that must be kept. This is of particular importance in a time of permanent Euro rescue. The Euro would be history for five years already if it would not be rescued day by day, with billions of money.

Faced with the situation that there has been so much intransparency, unaccountability and misinformation by the Bundesbank and the German government and that there is NO hard evidence that there is any gold in the Bundesbank vaults, the journalist asks whether the public can see the gold to verify its existence. Peter Boehringer replies that there is a showroom with 77t gold (a little more than 2% of the total). Unfortunately even the showroom is not open to the public, only one TV journalist was allowed access, bizarrely from children TV-Channel. In the broadcast, the view of the gold bars was enhanced with computer animations.

Recently photographs have emerged of the 1035t of gold that the Bundesbank allegedly held in its vaults before the repatriation started (no external party is allowed to see it). These "gold bars" are stored in intransparent metal containers, sealed with 1500 metal seals. They are inaccessible. There is no proof but the word of the Bundesbank that there is anything of value in these containers. It is suspicious that the gold is hidden away even from Bundesbank staff and sealed in a way that makes any audit impossible. What is the need for this arrangement in a high security vault?

Are these shenanigans just a ploy to obscure that the German Bundesbank gold only exists in computer ledgers? Fantasy gold is moved from here to there but physical gold is not to be seen anywhere. There are no external audits to ascertain that the gold in the accounts exists as an asset of the Bundesbank. Even if there was physical gold - how many claims would be on that gold? How often has it been lent out? It may be right in front of the viewer but there may be 10 parties claiming ownership.

The journalist is clearly worried and he asks Peter Boehringer whether he is not afraid that the Americans one day could refuse to return the German gold, that the German gold would be stolen. Peter Boehringer would not answer this question. Instead he said that his gold initiative wanted to keep the option for the German people to partially back a new German or European currency with gold after the demise of the Euro. The Euro could disappear any day, economically it was finished already. He continued: To have the Bundesbank gold abroad does not make sense because it is exposed to counter party risk (the risk that the gold would not be returned or stolen).

The journalist is still quite worried and he asks what the consequences were if all of the German gold was stolen, that the Americans had sold it or lent it out. Peter Boehringer obviously does not like the question and becomes evasive. He claims that such a scenario was utterly theoretical and not likely at all. Revealingly he adds that a deficit of 2200t could be remedied by buying the missing gold in the open market (an operation that obviously explains why so much paper gold is thrown into the market for years now to trigger panic sales). Pressed by the journalist he concedes that the admission that several thousand tons of gold was missing would be a major market event. In a market where it is presently difficult for institutional investors to buy just half a ton of physical gold, the economic consequences of a deficit of just 1000t would be enormous for gold and beyond. The gold price was a political price and such an event would make it impossible for central banks to maintain borrowing costs close to zero (the end of ZIRP, a loss of confidence in central banks and a spike in yields could trigger a collapse of the financial markets?). Additionally he said there would be geopolitical repercussions for transatlantic relations (the end of the US empire?) if it was conceded that the Federal Reserve Bank, the Banque de France, or the Bank of England did not take their fiduciary duties serious enough. Peter Boehringer did not want to elaborate further because he felt that such an event was quite improbable - such a calamity would never be admitted. It would be acceptable for the Germans if the missing gold was bought secretly in the open market and then delivered to the Bundesbank.

The interview then switched to the copycat gold repatriations/repatriation attempts in now 16! countries. They follow Germany's example because they are worried about the safety of their gold and want to store it at home.

Conclusion: Peter Boehringer has shown in this interview that there in no proof that the German gold exists as a physical asset of the Bundesbank. He states that he firmly believes that the gold that is reported as being stored in the Bundesbank vaults does exist. Belief is a religious term. In the world of law and commerce evidence is required. Unfortunately there is none. The information available about this subject was sufficient to shatter the confidence of foreign governments in the integrity of US institutions. There are now 16 countries where gold repatriations are demanded or in full swing. To buy back several thousand tons of physical gold in secret is a daunting target in a market where it is already difficult to buy half a ton of gold. The historically unprecedented recall of physical gold explains the desperate attempts by the big players, supposedly the US (Federal Reserve Bank, US Treasury, ultra secretive US Exchange Stabilisation Fund) and allied authorities (Bank of England, Bank for International Settlements) to smash the gold price and to trigger panic sales among gold holders. As forced buyers they are in corner and there is no way out without massive loss in wealth and reputation.

P.S. There is a very good video by Grant Williams about the collapse of gold fractional reserve banking ( https://www.youtube.com/watch?v=wzzoBVK3fyE ). He made this video in March 2013. He is a real prophet and saw this development coming.


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