Germany on a mission to bring home more than half of its gold reserves by 2020
Germany has accelerated the efforts to bring its gold back home, after being stored overseas for many decades. The country has released a statement which shows that during the calendar year 2015, it has moved back almost 210 tons of gold to Frankfurt, of which around 110 tons were brought back from Paris and a little under 100 tons from New York.
Apparently, Bundesbank is on some strange operation to get back as much as 300 tons of gold from Federal Reserve Bank of New York, and 374 tons from Banque de France in Paris. The timeline for the completion of this mission is 2013-2020. As Zero Hedge points out, the timeline is rather peculiar because Bundesbank is powerful enough a bank to make the entire transfer of 674 tons in a matter of few weeks. The fact that Germany chose to stretch this movement for nearly 7 years is a little odd.
However, this high-risk, sensitive mission is said to be quite organized and well under control. According to The Financial Times, Carl-Ludwig Thiele, Member of the Executive Board of the Deutsche Bundesbank, said, "The transfers are proceeding smoothly. We have succeeded in once again significantly increasing the transport volume compared with 2014. This means that operations are running very much according to schedule."
The 1950s were the years when Germany began to build its gold reserves when the yellow metal was used against the trade surpluses under the Bretton Woods system that linked gold with US dollar. This basically led to the creation of special vaults, mainly in New York, under Federal Reserve. These came to be of use when Bundesbank decided to shift its gold to the New York vaults, fearing a Soviet Union invasion during the Cold War.
As per Mining, since 2013, it has managed to get home around 366 tons to Frankfurt, which makes it only 50% of what needs to be repatriated. Now Bundesbank is planning to bring back further 307 tons by the next five years. By 2020, more than half of its total reserves will be stored domestically, about one-third will be kept with the Federal Reserve and around 13% will remain with the Bank of England. The Central Bank of France is surprisingly out of the equation as the euro zone sees the two countries as close political allies.
In October, the bank shared the 2300-page long report which accounts for every bar of gold stored in the vaults of Frankfurt, London, Paris and New York. Germany's gold valuation is currently the second largest in the world, after the US, and comes close to $130 billion.