Bundesbank to pull gold from New York and Paris in watershed moment

Germany’s Bundesbank is to repatriate gold reserves held abroad to tighten control and combat currency crises in the future, pulling a chunk of its holdings from New York and all its bullion from Paris.

The move marks an extraodinary breakdown in trust between leading central banks and has set off ferment among gold enthusiasts, with some comparing it with France’s withdrawal of gold from the US under President Charles de Gaulle as the Bretton Woods currency system crumbled in the late 1960s.

passgo: Yes thank you Gordon!  Just remind me again "when we saved the world…"

FunkyGiraffe: Could not have put it better myself. No matter how bad the current government is you only have to think back…

iridium:  Gordon Brown didn't cock up, he knew exactly what he was doing and he did it well. Deplete Britain's gold reserves, while Germany doesn't… fiat currency collapses… tangible back up needed to restore confidence. Oops we haven't got any gold, but Germany has… Britain becomes an economic vassal of the German empire. Special agent Brown did a very good job indeed.

alastairsnare: You are right that he didn't cock up but not for  the reasons you say. It has since come to light that Gordon Brown sold gold well below its spot price for the day when it hit rock bottom because there was a New York-based bank that had gone short on gold and (for some reason) Brown felt he needed to save this bank. This has been reported in several places. Personally I'd like to know how his effective bailing out of a New York bank helped us out in the UK… If it didn't do any good for us back then in the short term (obviously it hasn't in the long term) then I'd like to see a public enquiry into this action…

toby roberts: If a bank had gone short of gold, and gold then hit an all-time low, the bank would have been in profit. I think you may have misremebered the story in some way, Alastair.

raaaaawr: toby you didn't understand his comment.  The short position was taken out before this and gold was rising. Brown then announced he was selling in advance (ensuring we got the worst possible price) sending the price to all time lows thereby bailing out the bank.  An equally plausible scenario though is that Brown was just an economically illiterate fool.

landak: Toby understood better than you did. I wish this idiotic conspiracy theory nonsense would stop infesting these pages. Gold had been in a long-term downtrend prior to Brown's gold sales. If the New York bank held a short position they would have earned profits on it. 

PrestonPark: I believe the story is short position was expiring, but gold was still above the profitable short covering price - hence Brown's sale lowered the price & provided a profitable (or not loss making) redemption. 

landak: That is just a story concocted by someone who knows nothing about futures markets. Brown sold our gold right at the lows so how was the position not profitable? What was the size of the position large enough to bankrupt a large bank?(Brown's sales only raised $3.5 billion-small change to a major bank). Or why not just roll-over the position?

smugtory:  I understand that the two biggest buyers of Gordon's gold were the Rotschilds and China. Anyone know of any one else?

jasperpepper:  Labour spin has it that Gordon the mentalist did it because it was "the right thing to do".

Christopher Stewart:  Haha i remember that… when we saved the world… what a complete autocratic useless toad. As thatcher would have said to him… i despise your socialist policies as much as all those in eastern Europe who had to live through it.

GermanMichel: At that time we had one page stories about Gordon Brown and his 'modern economics' on page 3 of respected German newspapers. Do those Anglosaxon leaders, starting with Roosevelt, really believe in the ideologies they represent? Or are they just plain outright 'employees' of their financial masters? 

Catherine Carr: Ambrose, 'Germany’s Bundesbank is to repatriate gold reserves held abroad to tighten control and combat currency crises in the future, pulling a chunk of its holdings from New York and all its bullion from Paris.' How does moving great big lumps of metal help in the currency crisis??? Short answer is it doesnt and never will…  Either they own it or they dont…  All this shows is that the Bundesbank doesnt trust the US government… and probably suspects the gold it is supposed to be holding isnt actually there… It also shows that the Bundesbank really thinks the US is about to go under and will use this gold for its own purposes… and sod the consequences… I think the Bundesbank is quite probably right…

alastairsnare: I agree. The US has form when it comes to the confiscation of gold. Roosevelt did it in the 30s. Governments want to make sure their own gold is on their own soil. Mind you, little people like you and me will not be able to stop our own governments from confiscating any gold we have should they decide to take such action…

dicktator: Oh dear… I lost all mine in an unfortunate boating accident. I can tell them it was in the Atlantic Ocean, though I'm not sure where I was at the time…

Vrai écossais: It is risk management. If you do not trust someone that they will look after or give you the value of the goods back in full then you repatriate your goods. That is why Comet, HMV and etc went bust, as manufacturers thought that the risk of getting their goods back was too great. Does not look good for the US though!

Lily Alldub: That is partially what this is about. Germany wants to crash the dollar. Giving France a slap along the way. As markets run on rumour and confidence, this could prove devastating to the US. Hopefully it will wake the US up to German economic warfare though. Get your Anderson shelters ready ;)

joelbanks: I would argue that this move by Germany should wake the US federal government and the Federal Reserve central bank to the potential repercusssions of their prolonged loose money monetary policies.

Lily Alldub: Germany is far from a saint on monetary policy. Don't believe their propaganda. http://germanywatch.blogspot.co.uk/2011/11/germany-biggest-debt-transgressor-in.html

northern vigor: @joel, That's the funniest thing I've heard in over six weeks. President Spendthrift…getting worried about "loose money repercussions"?…I just spewed coffee all over my keyboard. Oh my, you were joking weren't you?

northern vigor: By the time the Germans are done with the US, they will be buying those American nukes on German soil for army surplus prices from the US bankruptcy trustees.

pod8:   Hugo Chavez was ahead of the curve on this one.

markbg: Who would trust Obama and Bernake?  No one with an IQ about 50.