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German central bank unveils its gold reserves

GERMANY (OBSERVATORY) –¬†An exhibition at the German central bank unveiled the huge gold reserves in this banking body, confirming to the most skeptical that German alloys are present with all their weight.

Germany, the EU’s first economy with the highest proportion of exports, has the world’s second largest gold stockpile after the United States, with 3,400 tonnes of this precious metal, an estimated 117 billion euros.

However, in two decades, most of these bullion was not on German territory, but in banks in New York, London and Paris.

The authorities feared during the Cold War that the Soviet Union would invade West Germany and seize the gold.

But the growing pressure from public opinion prompted the central bank, known as Bundesbank or BUPA, based in Frankfurt, to repatriate half of the bullion as part of a series of operations led by the US Federal Reserve and the French central bank ended last year . Since 2000, Germany has recovered part of the gold deposited in England because of the costs of deposit.

Now the bullion is kept in a secret location in the Bundesbank. Only eight alloys were exhibited at the Money Museum as part of the “Gold Treasure at the German Central Bank” which takes place between 11 April and 30 September 2018.

– “Return our money” –

“We took this initiative to show citizens that gold bars actually exist,” said Carl-Ludwig Tielle, a member of BUPA’s Board of Directors, with 12 kilograms of gold behind the facades.

“We want to trust the central bank and its gold reserves, and we can only reach this through transparency,” he said.

The Banking Commission justified the decision to return this gold to the country by changing geopolitical conditions. But the real motive for this move in the eyes of experts is the pressures of politicians and public opinion, so some wondered if this gold actually exists.

These pressures intensified especially at the time of the debt crisis that hit the euro area, prompting investors to resort to gold, which is a refuge in such circumstances.

“Some people are wondering whether the deposits in Germany and abroad are real,” he said.

Peter Boehringer, who is now a member of the far-right People’s Party, the “Alternative to Germany,” launched a campaign “Bring our money back home,” which flooded the Bundesbank with a flood of letters and petitions.

Under these pressures, the central body unveiled in 2013 a plan to restore half of its estimated 270,000 tonnes.

“It is enough for a dispute to erupt abroad so that all this gold disappears,” he said.

– Sad memories –

Today, 1,710 tonnes of gold are deposited in Frankfurt, about 1,200 tonnes are stored in New York and about 430 tonnes are in London.

All the gold deposited in Paris was reinstated last year, as the central bank considered it useless to deposit gold in France, which belongs to Germany to the eurozone in the event of a crisis that questioned the conversion of the precious metal into liquidity.

But the decision to keep gold abroad is still right these days. The US Federal Reserve is the largest cash reserve in the world, while London is the global center for gold trading.

Germany was deprived of its gold defeat in 1945 and collected this treasure in the years of the “economic miracle”.

It is true that gold is no longer as important as it once was in financial systems, but it remains a “safety valve” in times of turmoil, according to the Bundesbank.

The Germans, whose memories of the unbridled inflation of the Weimar Republic, who had been in power before the fire, still cling to gold.

He represents in their imagination “money, power and greed, the reasons for killing people for which they have fought wars,” according to Ludbroich.