Where is the German Gold?

Almost a year ago, the German government put in a formal request to reclaim (repatriate) a portion of their gold reserves held outside of Germany. Reports on the progress of this initiative have raised quite a few questions.

Here's the first report, from ZeroHedge and released on Christmas Eve: https://www.zerohedge.com/news/2013-12-24/year-later-bundesbank-has-repa...

At the time the plan was announced, many in the gold community made note that it would take over 8 years for Germany to reclaim this portion of its foreign reserves. Seven hundred metric tonnes...though a lot of gold...should simply be sitting in New York, London and Paris vaults, collecting dust. Why not just brush it off, certify that the bars numbers match up and then ship that shiny stuff back to Germany. No big deal and certainly not something that should take eight years to accomplish.

Now news comes that, in the first year of the plan, Germany only received back 37.5 metric tonnes of their gold. This is only 5% of the total repatriation amount. At this rate, it will take twenty years, not eight, to reclaim the gold.

Further muddying the waters are reports that this gold came exclusively from the vaults of the Federal Reserve Bank of New York (FRBNY). If that was the case, then the gold returned should have been a simple transfer. The Germans deposited the gold there decades ago. It is being shipped back to them now. Problem is, it wasn't a simple transfer!

Apparently, The Bundesbank took the unusual step of having "its" bars assayed, melted and recast into London Good Delivery form before taking delivery. Now, why would they do that? And why would they do this in the U.S. and not in Frankfurt? These bars should simply be the same bars that were deposited decades ago. Do they not trust the FRBNY? Are these not the same bars?

Perhaps, instead, there's another explanation. This idea was first spelled out on the GATA site earlier this week and I urge you to read through this post now: https://www.gata.org/node/13458

In summary, it goes like this:

The original German gold held in the U.S. is gone. Leased, sold and rehypothecated many times over.
Germany now wants its gold back. The U.S. balks and promises to only return roughly 40 mts/year for eight years. (By the way, why didn't France return any gold in 2013? Germany's looking for 374 metric tonnes from them and, in 2013, it got zilch, zero and nada.)
Pressed to come up with gold to ship back to Germany, the U.S. scours it's vaults.
The U.S. takes some of it's 1930s-confiscated "coin melt" gold, assayed at 90% purity, and recasts it into 99.5% purity London bars and ships them off to Frankfurt.
The Bundesbank books in these new bars, apparently date-stamped "2013", as a "return of German gold" and now awaits the other 95% of their "order".

Hmmm. OK, then. First year done. Whew! Now, from which vault will the U.S. find gold for Germany in 2014? And how about the reserves allegedly held in Paris? When will those be returned? You'd think they could just drive that over in a convoy of guarded trucks. From Paris to Frankfurt is only about a 500km drive. You could do that in under a day. What's the big deal?

(Could it be that there is no German gold in Paris? Coincidentally, it's almost the exact same distance from Paris to Basel, Switzerland. Hmmmm. Maybe the Germans should look for their gold there, instead??)

Anyway, this entire farce just keeps getting sillier by the day. Today, there are reports from Germany that indicate the Bundesbank is quickly backtracking and attempting to retract the "U.S. remelting of bars" story. (https://www.gata.org/node/13472) OK, right. Whatever you say. And don't forget about this fun chart, created for us last year by our pal, Ned Naylor-Leyland: