Gold, God’s money. The only thing every person in the world wants, and every government.
Gold is as valuable in Beijing as it is in Bombay as it is in London as it is New York. For a long time the US dollar nearly achieved this status. It didn’t hold its value, but it was (and still is for the most part) desired by almost everyone around the world, and every government. The dollar has long been the reserve currency of the world. Alan Greenspan once even bragged that he and his cohorts had succeeded in making the dollar “as good as gold.”
It seems pretty clear that if this was ever the case, it is not the case now. Even Mr. Greenspan has called for a re-institution of the gold standard.
Germany, though not calling for a gold standard (yet) is very keen on getting its hands back on the gold it owns. The majority of which is within the bowels of the New York Federal Reserve.
The reason it is in New York and not Frankfurt or Berlin goes back to the Cold War and fears that the Soviets would take the reserves in an international hot war.
Earlier this year the Germans said they wanted to see their gold housed at the New York Fed. Some domestic voices were insisting on an audit as the economic situation in Europe continued to remain problematic. Germans wanted to put an eyeball on their wealth.
The Federal Reserve told the sovereign government of Germany that it could not see its own gold.
The Germans I guess have had about enough of that kind of treatment.
(From The Globe and Mail)
“If gold repatriation becomes a worldwide trend, it will be obvious that both the U.S. and U.K. have lost their credibility as gold custodians,” the CRG said.
An independent auditing office, the Federal Court of Auditors, recommended last year that the Bundesbank monitor its gold holdings outside Germany more frequently, sparking a political row, and officials said they would listen to the recommendations where possible. The Bundesbank said, though, that it had “differing views” with the FCA over the scope of an audit sought by the agency, which did not conform to the practices of central banks.