The Strange Case of German Gold – A Euro Pacific Exclusive

In an exclusive interview originally published in Euro Pacific Capital’s summer issue of The Global Investor Newsletter (found here), Andrew Schiff spoke with Peter Boehringer of the German Precious Metals Society about the latest false news reports concerning Germany’s gold repatriation efforts.

A June 23 Bloomberg News story entitled “German Gold Stays in New York in Rebuff to Euro Doubters” made the seemingly straightforward case that the German authorities had decided to reverse course on a plan announced in 2012 to bring home some 300 metric tons of German gold that had been on deposit at the New York Federal Reserve since the 1960s. According to the article, German representatives had gone to New York, seen their gold, were convinced that it was in good hands, and decided that the hassle of putting it on a plane and sending it back to Germany was simply unnecessary. The article quoted a spokesman for German Chancellor Merkel who said, “the Americans are taking good care of our gold.” The article even quoted Peter Boehringer, one of the leading private advocates of the German repatriation movement, as saying their campaign to pressure German authorities “is on hold.”

When the Germans originally asked for their gold back, the Federal Reserve countered with a painfully slow eight-year delivery period. This struck many as strange given that the total request only represented 5% of the gold reportedly held at the Fed’s New York vaults. The delay severely whipped up concerns that long-held theories about imaginary gold were actually true. The Bloomberg article appeared to dismiss all these concerns and bring the case to a close. Or did it? Almost immediately, people close to the matter cried foul.

I caught up with none other than Peter Boehringer of the German Precious Metals Society for this exclusive interview.

Peter Boehringer

Andrew Schiff: The apparent reversal by the German government to no longer look to repatriate its gold from the United States failed to raise any interest in the American press or the financial establishment. Did the move create much of a stir in Germany? Are any mainstream politicians there actively picking up the issue?

Peter Boehringer: The “reversal” has indeed been only apparent. The Bundesbank has not in any way officially changed its repatriation plan that was announced in January 2013 (a plan that I believe was too slow and too little anyway – 700 tonnes by the end 2020, of which 300 tonnes were to come from the New York Fed). The primary source for the confusion, especially in the non-German media, came from a factually wrong Bloomberg story. That story began with a completely unfounded headline, “German Gold Stays in New York”. I tried to set the record straight in the English-language press, but it is hard to fully “call back” incorrect mainstream reports like that one (see Bloomberg News, June 23, 2014).

Having said this, it is quite possible that the politicians cited in the story (such as Mr. Barthle, a Merkel spokesman) actually intended to “test the waters” of how the German public would react. In that respect, statements like, “The Americans are taking good care of our gold. Objectively, there’s absolutely no reason for mistrust,” could indeed have some significance, as they might be intended as a first step towards stopping the already painfully slow repatriation process of gold from the Fed. Still, Barthle, or Merkel for that matter, are not in charge of the gold. The Bundesbank is and they have said nothing.

It is noteworthy that in 2013, a mere 5 tonnes were actually delivered from New York to Frankfurt. Even for these minuscule volumes, there is no evidence by either an external auditor or video documentation that real gold bars (allegedly untouched in the Fed´s vaults since the 1960s) have been moved across the Atlantic. Bundesbank has even melted down and allegedly re-cast these bars for no apparent reason! We have received no audit report of this process, no report from the (unknown) smelter, and no bar lists from “old” or newly-cast bars.

But to date, no mainstream politician has publicly questioned this strange behavior. It has been left to concerned private organizations like ours to press these concerns. Fortunately, our national media has picked up on some of this, which may have prompted Mr. Barthle´s blind and unfounded “pledge of allegiance” to the US.

AS: Is the issue something that is discussed or understood by the average German?

PB: These details are, of course, not being discussed by the “average German” – soccer seems to be far more important these days. But both the gold community, the financial community, and the international media are taking ever more notice of our continued struggle. A full two-and-a-half-years after the initiation of our campaign, I receive at least two interview requests per week.

The Fed’s unwillingness to provide information, Bundesbank’s obvious evasions and obfuscations, and Bloomberg´s misleading article are leading to completely unintended reactions by the general public and the independent media. Rather than putting this issue to bed as these authorities may have hoped, we are seeing ever MORE questions being raised.

AS: Officially, at least, what was responsible for convincing German officials that their gold is safely stored and accounted for by the Federal Reserve?

PB: I can of course only speculate here. Given the decade-long mis-information from the Fed and the Bundesbank regarding our national gold, there is no apparent reason for these officials to now call this case “closed” – quite the opposite would be logical. We must therefore assume that the Fed is unwilling or unable to quickly put Germany’s gold at the Fed (1,500 tonnes) on a few planes, thereby sending our property to where it belongs (Frankfurt). It has become harder to reach the conclusion that our officials are not complicit in some kind of US-led cover-up. So far, due to our public responses, the official approach has not worked, but rather increased the pressure on Bundesbank to repatriate.

One reason that the gold was unavailable for quick delivery could be multiple ownership of our bars at the Fed. Given today’s global fractional gold banking scheme, an (allegedly physically existing) bar in a central bank vault could have 10+ owners, and could thereby show up in 10+ central bank balance sheets as either “physical gold” or “gold claim.” These two (completely different!) balance sheet items have not been properly differentiated for many decades now. We are potentially talking about non-existent physical bars at a magnitude of tens of thousands of tonnes!

Without proper physical audits, repatriations, and allocated storage, no gold “owner” today can be certain that “his” bar in one of these unallocated gold storage vehicles is actually his exclusive property! Our campaign is therefore not only a German effort, but could also have international repercussions of unknown scale.

It is not by accident that since the launch of the first two campaigns in 2011-12 by Germany and Switzerland, more than ten similar national initiatives have been launched all over the world. The responses of the arrogant central bankers are the same everywhere: ignore them, call them “conspiracy theorists,” insist that “everything is in order with the gold,” and give not a shred of evidence (bar lists, audit reports, bar transport to owners).

AS: How did the Bloomberg article, which is really the only story published by a mainstream American outlet about the reversal, quote you incorrectly or out of context? Has the reporter explained his actions?

PB: I had a friendly 30+ minute conversation with the Bloomberg reporter, explaining all I could. But the only so-called “quotation” of mine which was ultimately used months later was, “Right now, our campaign is on hold.” Of course, I never said this sentence. All I did is explain truthfully that unfortunately, nobody in Germany – including our campaign – can legally ENFORCE the dissemination of information from Bundesbank or a quicker repatriation of our gold. When the interview was conducted in May, we had not had an opportunity to put even more pressure on BuBa, as we had been partially successful in doing several times since 2011. The Bloomberg hack somehow twisted this to mean that we were satisfied and that we were no longer pressing the issue.

In hindsight, however, I have to THANK the reporter for involuntarily opening up this new and great opportunity for spreading our message. Since the Bloomberg piece, I am giving interviews on a daily basis, even to international radio and TV broadcasters with millions of listeners. This gold issue will not go away.

Gold is money. And central bank gold is a potential cornerstone of future currencies which might well HAVE TO be (partially) gold-backed, especially if there is a crash of today’s un-backed paper currencies. Therefore, central banks all over the world have to quickly become much more transparent and have to audit and repatriate OUR gold!

Peter Boehringer is the founder and president of “German Precious Metal Society” (est. 2006), an NGO dedicated to spreading independent information on the relevance of gold and silver as both investment vehicles and as basis for sound money and in-turn a sound society. Mr. Boehringer is one of the main initiators of the German public’s “Repatriate Our Gold” campaign, which is supported by many prominent signatories, as well as by 15,000+ national and international activists. Peter has been writing Germany’s most popular gold blog since 2003 with a focus on both economic and political implications of gold and silver prices. He is a book author, speaker at liberal and economic conferences, and a frequent writer of articles critical towards the current credit-based monetary system and its negative implications. He is a fellow of the liberal Hayek-Society.

Neither Mr. Boehringer nor German Precious Metal Society is affiliated with Euro Pacific Capital or any of its affiliates. The opinions expressed above are those of the writer and may or may not reflect those held by Euro Pacific Capital.

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