• Germany's news in English
 

Bundesbank gold location kept secret

Published: 08 Nov 2011 12:00 GMT+01:00

Economics Minister Philipp Rösler firmly ruled out digging into the country's reserves to help rescue the euro.

"German gold reserves must remain untouchable. I say this explicitly as Economics Minister, as representative of the Chancellor and as party chairman of the Free Democrats," he said on Monday on ARD television.

On Tuesday, the daily Financial Times Deutschland examined the speculation on where Germany’s horde of gold is being kept. The country's estimated 3,401 tonnes is the second largest national reserves after that of the United States.

Much of Germany’s gold would appear to be still in America, where it was held during the Cold War to ensure it never would fall prey to invading Soviet forces.

Although the Second World War had left Germany in ruins, the economic miracle of the 1950s which was largely based on exports, quickly built up enormous gold reserves. By 1968 Germany had 4,000 tonnes, the most it has ever held, the paper said.

Yet most of this was never moved to German soil – such a transport would be a logistical nightmare to organize, while insurance cover would be impossible to get. The gold changed hands on the trading floors of New York, London and Paris, while the metal bars themselves never moved.

West Germany’s financial centre Frankfurt, the home of the mighty Bundesbank, was in any case not considered safe enough – it was only an hour’s car drive from the Fulda Gap – the crucial weak spot in the German-German border where NATO planners feared an invasion by the Red Army could take place.

Former Bundesbank chairman Hans-Helmut Kotz told Stern magazine in 2004, “The largest share of our gold reserves are held in the Federal Reserve Bank, the Bank of England and the Banque de France. In that order.” His successors have never offered so much detail.

Even a written parliamentary question last November could not evince further information – only that the Bundesbank does have the gold in physical form, not in the form of delivery promises.

Rumours abound that the Federal Reserve lends the gold in order to earn interest, allowing banks to keep the gold price artificially low by short selling it on the market – something which the FTD said would profit many actors apart from gold owners and mine operators. Even though the central banks’ own gold reserves would be worth less in such a case, they would benefit from the stability indicated by a low gold price.

But as the FTD said on Tuesday, either the Bundesbank is lying or this theory of the gold price being depressed in this way does not fly – the paper was told by the Bundesbank that, “at the moment no gold is on loan.”

Critics suggested the storage of Germany’s gold in the United States was – and remains – a kind of political deposit, to ensure that West Germany remained tightly bound to the West.

This was disputed by the Bundesbank, whose spokeswoman said, “We are led by security, cost-efficiency and liquidity.”

Metals expert Thorsten Schulte told the paper that diplomatic considerations also probably played a role. “Taking the gold out of the US would be a sign of mistrust of the first order,” he said.

Karl Blessing, Bundesbank president in the 1960s is said to have written a letter to the American high commissioner in Germany promising not to convert the gold into dollars, the paper said.

Having large parts of German gold in New York, London and Paris would be useful in terms of saving on transport costs when it comes to selling. Around 60 central banks are said to have gold reserves in New York. “There are also serious sources which say the Bundesbank often brings small amounts to Germany,” said Schulte.

The reserves currently held in Mainz and Frankfurt are considered to be more than the four percent often cited – the Bundesbank told the FTD “a large share of the gold reserves” are in Germany.

The Local/hc

The Local (news@thelocal.de)

Your comments about this article

12:39 November 8, 2011 by Celeon
"Untied States" is a really good typo dont you think ;-D
12:59 November 8, 2011 by Dizz
Lol. They must be part of the commonwealth too if Karl Blessing wrote a letter to the "American High Commissioner".
13:12 November 8, 2011 by melbournite
Yeah right. Actually I have 4,000 tonnes of the stuff. I'm sorry - can't tell you where it is but its in a "safe place". Can I have a 1 trillion euro loan please?
13:34 November 8, 2011 by jg.
I guess we can now expect emails like the following:

greetings my Friend,

I am Herr Dreier Chief - Cash Officer of the Bank of the Democratic Germany stationed in Lagos, Nigeria. We have your gold here, amounting 4000 tons (4.3 millions of kilos) but you must help me move the gold out of Nigeria. You must send me your details to start the transfer and make a fee to free the gold from the bank. Fax me at +234 555 12345.

god willing, all can be made quickly,

Herr Dreier

dannyubani@wongweh.cn
02:30 November 9, 2011 by vonSchwerin
"Bundesbank gold location kept secret"

If word got out, a bunch of angry Greek protesters might try to seize it.
07:11 November 9, 2011 by mike_1983
Interesting article but it did leave me with the obvious question of how much is 3,401 tonnes of gold worth? does anyone know???
15:30 November 9, 2011 by Neonsport
I come up with approximately 143,963,217,642.6 euros... of course my math could be off.
11:57 November 10, 2011 by mike_1983
thanks neon, so thats about 150 billion euros.... still well short of the 1.4 trillion euros of debt that germanys in!
13:34 November 10, 2011 by moistvelvet
"If word got out, a bunch of angry Greek protesters might try to seize it"

No chance, for them that would be too much hard work!
20:43 November 12, 2011 by Bigbobswinden
Send Greece their gold back, it will help them out of a hole.
20:46 November 12, 2011 by Stephen Goodson
The writer of the article surmises that Germany's gold was originally deposited in the US Federal Reserve Bank because of the cold war. This is incorrect. In terms of the Geheimer Staatsvertrag dated May 23,1949 (also known as the Kanzlerakte), Germany has to keep all its gold at the Fed until the year 2099. These facts were confirmed by Major-General Gerd-Helmut Komossa, former head of Military Intelligence in his book "Die Deutsche Karte" published in 2007. Germany has thus a further 88 years to wait before she can get her gold back and her "colonial" status is lifted. Hopefully, by that time Germany will have concluded a peace treaty with the allies - still outstanding after 66 years!
12:01 November 14, 2011 by Bomo
I agree, return the gold that was trousered from Greece.... but with interest.
18:23 November 14, 2011 by Alldeutsch
Germany didn't take Greece's gold you effin retard.

Jeez, the trolls are everywhere...
Today's headlines
Germany heightens travel warning for Turkey
A view of Istanbul. Photo: DPA.

Germany heightens travel warning for Turkey

The German government has issued more severe warnings about travelling to Turkey after a string of terror attacks in the south of the country, and as Ankara intensifies conflict against two militias in Syria and Iraq. READ  

Fireman turned arsonist jailed for 3 years
Fire services extinguish an unrelated fire in Hamburg in 2011. Photo: DPA

Fireman turned arsonist jailed for 3 years

After a series of arson attacks over several months, an ex-fireman has been sentenced to three years in jail without chance of bail. READ  

Mother slams IKEA for rejecting autistic son
Photo: DPA

Mother slams IKEA for rejecting autistic son

A mother from North Rhine-Westphalia has accused furniture chain IKEA of debasement, discrimination and marginalization – after employees in their Dortmund store refused to let her autistic son into the children's play area. READ  

Wallaby goes walkabout in Berlin outback
Photo: Gemeinde Nuthe-Urstromtal

Wallaby goes walkabout in Berlin outback

A woman in a village south of Berlin was shocked to find a rather unusual visitor in her garden on Tuesday. But by the time police got there he'd already bounced. READ  

Munich upholds ban on Jewish 'memory blocks'
A pedestrian walks by a group of Stolpersteine. Photo: DPA

Munich upholds ban on Jewish 'memory blocks'

The Munich City Council said on Wednesday that it had voted to continue banning the placement of blocks commemorating Jewish Holocaust victims in city streets - a ban that garnered surprising support from Jewish community leaders. READ  

13-year-old boy detained for trying to join Isis
Batlle in Syria. Photo: DPA

13-year-old boy detained for trying to join Isis

A young teen from Munich was detained near the Turkish border with Syria on Friday as he was trying to join the radical Islamist group Isis. READ  

The Local List
Six odd ways Germans talk about the weather
Photo: DPA

Six odd ways Germans talk about the weather

Is it absolutely roasting, or raining cats and dogs? Neither if you live in Germany. Here are six wonderfully weird expressions Germans use to talk about the weather - some more literal than others. READ  

Little by little, Germans move away from cash
Photo: DPA

Little by little, Germans move away from cash

Tourists and business travellers visiting Germany are often surprised when they reach to pay for their beer, metro tickets or even a large restaurant bill that their credit cards are not welcome. Habits, however, are slowly changing as younger consumers leapfrog from cash to convenient electronic forms of payment. READ  

Satire and reality blur in parody party's strife
Martin Sonneborn. Photo: DPA

Satire and reality blur in parody party's strife

After winning a seat in the European Parliament last year on a commitment to 'milking Brussels,' satirical party Die Partei broke new ground. Now a 'Nazi Putsch' threatens to split the party asunder. READ  

Pelicans with wanderlust escape German zoo
These feathered fugitives took flight from the zoo to get a birds-eye view of the world. Photo: DPA.

Pelicans with wanderlust escape German zoo

A pair of pelicans with a serious case of wanderlust flew the coop from Osnabrück Zoo last week, only to find their way back days later. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Culture
Berlin restaurant serves up Greek Crisis Menu
Rhineland
Doctor on trial after woman wakes in morgue
Society
Six odd things Germans do in the summer
Sponsored Article
Outsourcing drives Apreel's Europe growth
Society
Police bust kinky Bavarian couple over painful love-making
Politics
Merkel brings Palestinian girl to tears
Hamburg
Amateur archaeologist finds Nazi gold hoard
National
Could Merkel learn a lesson in love from this doppelganger?
Travel
Why you should stay in Germany for the summer holidays
Sport
German press tell Schweinsteiger 'good riddance'
National
Hamburg gets a bouncing 100kg baby girl
Society
In North Germany, money sometimes DOES grow on trees
National
Hero mechanics stop Bavaria shooting spree
International
Denmark says that border controls are coming
National
Did hackers take control of German missile battery?
Politics
Munich gives gay pride green light
Business & Money
Berlin rent controls hit prices hard
National
Fighting to breastfeed in public without shame
Society
Ice cream for dogs 'gobbled up in one gulp'
Education
Are hotpants a feminist issue?
Rhineland
Lion cub reunited with mother
National
How the heatwave is cracking Germany's Autobahns
International
Why the French are more sympathetic to Greece than the Germans
Sponsored Article
Crans-Montana: International expat hub
Gallery
Police seize pensioner's WW2 heavy weapons haul
National
How to survive the Europe-wide heatwave
Sport
Is Schweini already out of the door at Bayern?
Politics
How German media shaped the Greece crisis
National
Car assembly robot crushes worker at Volkswagen
Rhineland
Weathermen red-faced over heatwave snow warning
Society
An eye for an eye? Mum protects child in playground with pepperspray
National
As it happened: Queen Elizabeth's final day in Germany
National
As it happened: Queen Elizabeth's second day in Germany
National
Queen Elizabeth II's first day in Germany - as it happened
National
Bus passengers tell fake racists where to get off
Politics
What's really in the Queen's handbag?
National
Germans say USA doesn't respect freedom
National
Yes, you CAN buy adult e-books before 10pm in Germany
VIDEO: Watch a 93-metre turbine crash to earth in slow motion
Gallery
Who's got a shot at the German Film Awards
Rhineland
Anger over 'child-free' beer garden
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

7,175
jobs available
Toytown Germany
Germany's English-speaking crowd