Tag Archives: Ben Bernanke

Germany wants 300 tons of its US gold

Back in November, German politicians were grumbling that they wanted to see their gold deposits being held at the New York Federal Reserve Bank.

Now, they’ve upped the ante and are beginning to cash out, demanding shipment of 300 of their 1,536 tons of gold held in the U.S.:

In what sounds like the setup for a stylish Hollywood heist movie, Germany is transferring nearly 700 tons of gold bars worth $36 billion from Paris and New York to its vaults in Frankfurt.

The move is part of an effort by Germany’s central bank to bring much of its gold home after keeping big reserves outside the country for safekeeping during the Cold War.

Shipping such a large amount of valuable cargo between countries could be a serious security headache. A gold robbery — the subject of such movies as Die Hard 3 and The Italian Job — would be embarrassing and expensive for Germany.

The high-stakes, high-security plan is to move the precious metal — 374 tons kept in vaults in Paris and 300 tons stored at the New York Federal Reserve Bank — to the Bundesbank in Germany’s financial center over the next eight years.

The speed at which the German central bank’s transition from an audit to actaully moving gold has been rather swift. As they are now in negotiations Lufthansa Cargo to move the 300 tons of gold across the Atlantic, they’ve allowed themselves until 2020 to complete the process of being able to store half their gold reserves in the Heimatland (homeland).

By 2020, the Bundesbank intends to store half of Germany’s gold reserves in its own vaults in Germany. The other half will remain in storage at its partner central banks in New York and London. With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time.

Interestingly enough, stashed away in the extended Bundesbank press release was an interesting nugget (translated from German):

Function of Gold – Why do Central Banks hold Gold?
– Diversification
– Universal Acceptance
– Resilience to Shocks (State or currency risks)
– Confidence

This money-like exchange of gold for foreign currencies will likely embolden critics of Ben Bernanke and the Federal Reserve. Bernanke, who was queried by Ron Paul in a 2011 Congressional Committee famously folded on the issue, stated that gold wasn’t actually money, rather “it’s tradition. Long term tradition.”

In Germany, that tradition is alive and well, and demanding the Federal Reserve hand it over.


Elmo explains economics

Elmo really has a way with words. He recently helped explain economics and did a righteous job. Ben Bernanke better run if the rest of the Sesame Street gang shows up with pitchforks and torches… of love:

In case you haven’t noticed, incomes (not GDP) pay mortgages and support small businesses. Increasing the National Debt by a can you say “parabolic?” 54% in the last 42 months hasn’t budged income per capita in nominal terms. If you adjusted for inflation, you’d find that Americans are actually about 12% poorer today than they were in 2006. We’re not “growing” our way out of this, we’re just going deeper and deeper into hock, courtesy of a government with about as much fiscal discipline as crack-whores with a stolen credit card. Here’s the thing: It’s your credit card, so maybe you should understand how much they’re spending:

Just to be clear, we’re talking about $400 per citizen per month in new charges alone, month after month after month. Here’s what me and Elmo can’t figure out: Why would attempting to break this spiral be labeled Class Warfare?

I couldn’t resist but INTERVIEW ELMO EXCLUSIVELY FOR HAMMER OF TRUTH (MUST CREDIT HAMMER OF TRUTH). He said he hopes Ben Bernanke stays healthy and had this to add on the insult pile:

Watch out Elmo, talk like that will get you to sent off to Gitmo.

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Are bankers about to be beamed up to the mothership?

Brian Doherty at reason leaves us wondering where all the important people are going:

February saw a series of what I expect to be statistically unlikely resignations (though I confess I do not have time-series data on banker resignations at hand) by high-powered international bankers: World Bank chief Bob Zoellick, the leader of Kuwait’s central bank, the chief’s of Slovenia’s two biggest banks, the CEO of big Indian bank Dhanlaxmi, Nicaragua’s central bank, and the Royal Bank of Scotland’s Austrialian arm.

A conspiracy-minded site with a collection of links about turmoil and job turnover in high finance and government positions stretching back through last year. Can bankers and government officials sense coming earthquakes, as household pets are said to be able to?

The punchline? Yet Ben Bernanke still has a job to go to every day.

“Soon, soon we gets to take off the human-skin suit and join the comrades on the last resource-filled shuttle. To rendezvous with the awaiting ship in a stationary cloaked cloaked orbit behind the moon.” Maybe that’s what Bernanke tells himself every morning he sends another truckload of paper out the door in return for the entire planet.

Is everyone going Galt, or is this nothing more than a mass career reassessment with eerie 2012 timing that just needs to be compared with more than three months of speculative data?