Home » Black Swans » Gold Germany Conspiracy Theories vs Central Bank Trickery $GLD

Gold Germany Conspiracy Theories vs Central Bank Trickery $GLD

Germany announces plans to repatriate much of its gold stored in America and France. New York and Paris to be precise. The cover story is local political issues that can only be solved by moving gold into German Vaults. Bah Humbug.

Germany kept its gold in far away lands because of the then very real threat of Soviet Invasion. This thankfully has become quite improbable.

Here is the probable conspiracy theory with a strong Teutonic flavouring.

Germany is dismayed with the Euro crisis. Germans work hard. Mediterranean countries spend hard. Many Germans feel like they have inadvertently stepped into a pile of doggy doo doo. At the same time they are not impressed with America’s pathetic attempts to deal with government spending and this whole fiscal cliff thing. America went over right. France going left-wing and exporting its money class did not impress as well.

OK so at the end of the exercise Germany dramatically increases its store of Gold held within its borders. They now have more opportunity to be of service for other central banks. They can exchange notional positions of gold. For example they can decide with Beijing that Germany holds on behalf of Beijing and Beijing holds on behalf of Germany say a million oz of gold.

Nothing changes hands physically but you have moved dramatic amounts of wealth which would interest sovereigns with global aspirations. Having moved your gold reserves the sovereign is now in a position to monetize part or all of it for currencies of its choice with partners of choice.

It would be very difficult for Beijing to monetize its gold in America if there are hostilities or just harsh words between the two. But if America and Germany exchange partial positions and then Germany lays off a piece to Beijing with a physical location and currency to be determined you can see the possible leverage.

In the mean time the pesky Greek protestors can riot their hearts out. It will not matter.

Germany has become a little bit more like Switzerland. They will be able to deal more effectively with global forces and ignore political wind storms like the Euro crisis. All this from the grand children of a generation who considered world domination possible.

Goldfinger spins in his grave with glee.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or maybe follow his evil twin who is writing a Wall Street Murder Thriller at twitter@georgegutowski