Wednesday, October 31, 2012

Germans Want Their Gold Back

Germany's gold reserves are amongst the highest in the world and they have been kept almost entirely overseas due to Cold War fears of a Soviet invasion. Almost half of Germany's gold is kept in Manhattan — deep in the heart of the Financial District at the New York Fed.
But some German politicians seem to be getting uncomfortable with trusting the US with this system. They want to actually see the gold, to make sure its still there. Some even want it back. A campaign called "Bring back our Gold" was launched in May, and seems to be making an impact on mainstream politics.
Der Spiegel's Sven Böll and Anne Seith have published a good explainer about the situation. A large part of the movement seems to come from Peter Gauweiler, the head of the conservative Christian Social Union (CSU), who has for years demanded to know exactly where Germany's gold is (He eventually was allowed to visit the Bundesbank's domestic gold in storage  in Frankfurt).
However, what really got Guaweiler riled up was a secret report from Germany's Federal Audit Office that sternly criticized the German central bank. The report, while apparently routine, looked like a key piece of evidence to those expecting some sort of conspiracy theory. As Der Spiegel describes it:
Indeed, the partially blacked-out report read like the prologue to an espionage thriller in which the stunned central bankers could end up standing in front of empty vaults in the US.

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