Where is the German Gold?

[jeff of pa]

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.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.

German gold repatriation off to a slow start | TF Metals Report

 

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[TreasurePirate69]

You know how these things work... it takes 6 months to figure out who all of the key players are and contract out many of the aspects of security and transport. They then need to devise a plan and triple check it. Not to mention coordinating across several different governments is going to push it out even further. Finally, the first shipment should be expected to be very small as they don't want to introduce too much risk by shipping too much at once. After the first shipment is received the rest should move a lot more smoothly as they won't need to repeat all of the same steps again. There will be some amount of new or repeat planning for each shipment as they will want to vary their procedure a bit to keep potential criminals guessing. But it won't take a year per shipment and each shipment will likely get bigger as time goes along. I would guess that it will take no more than 6 years depending on how they decide to break down the shipments.

 

[jim4silver]

You know how these things work... it takes 6 months to figure out who all of the key players are and contract out many of the aspects of security and transport. They then need to devise a plan and triple check it. Not to mention coordinating across several different governments is going to push it out even further. Finally, the first shipment should be expected to be very small as they don't want to introduce too much risk by shipping too much at once. After the first shipment is received the rest should move a lot more smoothly as they won't need to repeat all of the same steps again. There will be some amount of new or repeat planning for each shipment as they will want to vary their procedure a bit to keep potential criminals guessing. But it won't take a year per shipment and each shipment will likely get bigger as time goes along. I would guess that it will take no more than 6 years depending on how they decide to break down the shipments.

Are you kidding? If so, that is pretty funny!

Jim

 

[TreasurePirate69]

Are you kidding? If so, that is pretty funny!

Jim

Kidding? No. Why do you think that is funny? Is it funnier than someone taking the first year of a project with all of the expected delays and procedural nonsense that always accompanies the beginning of these projects and then multiplying by 20 to get an idea of how long something is going to take? Does that seem remotely logical to you? If I start a company and develop a product that takes 5 years for the very first widget to ship, does it make sense that it is going to take 5 more years to ship the second widget?

Really... I'm either not getting your point or we are on completely different pages here.

 

[jim4silver]

Kidding? No. Why do you think that is funny? Is it funnier than someone taking the first year of a project with all of the expected delays and procedural nonsense that always accompanies the beginning of these projects and then multiplying by 20 to get an idea of how long something is going to take? Does that seem remotely logical to you? If I start a company and develop a product that takes 5 years for the very first widget to ship, does it make sense that it is going to take 5 more years to ship the second widget?

Really... I'm either not getting your point or we are on completely different pages here.

I am sorry I find it hard to believe that you believe that. I don't mean any offense.

If the gold bars are in vaults and unemcumbered, it should not take more than a year to move 674 tons. This is especially true if we are talking about two countries transacting and not private individuals. China has purchased over 2000 tons over the past couple of years. I doubt they are on the six year plan to receive their gold. The German gold could be broken into smaller shipments if security was a concern. They could load it on US military planes and have it in Germany fairly quickly, if the gold is there and available. I doubt a band of pirates would be going after it with US escorts. The value is now worth around 30 billion or so. $30 billion is not much these days.

Your description seemed kind of James Bond-like in a sense but I don't believe it would be difficult at all for world governments to accomplish. It is not like they are shipping them to the moon or something.

I read that after much complaining they let someone from the German gov peer into a room with gold bars but that was it. I thought the official version was that the US denied them any opportunity to see their own gold so I don't know if any "viewing" ever took place or not.

All just my opinion.

Jim

 

[TreasurePirate69]

I am sorry I find it hard to believe that you believe that. I don't mean any offense.

If the gold bars are in vaults and unemcumbered, it should not take more than a year to move 674 tons. This is especially true if we are talking about two countries transacting and not private individuals. China has purchased over 2000 tons over the past couple of years. I doubt they are on the six year plan to receive their gold. The German gold could be broken into smaller shipments if security was a concern. They could load it on US military planes and have it in Germany fairly quickly, if the gold is there and available. I doubt a band of pirates would be going after it with US escorts. The value is now worth around 30 billion or so. $30 billion is not much these days.

Your description seemed kind of James Bond-like in a sense but I don't believe it would be difficult at all for world governments to accomplish. It is not like they are shipping them to the moon or something.

I read that after much complaining they let someone from the German gov peer into a room with gold bars but that was it. I thought the official version was that the US denied them any opportunity to see their own gold so I don't know if any "viewing" ever took place or not.

All just my opinion.

Jim

I was trying to be generous with my 6 year estimate. Yes, I think they will be able to move the gold much faster than 8 years or even 6 years. My point is that this blog post has decided that it will take 20 years based on the fact that only one 20th was moved in the first year. Hopefully you can understand my logical reasoning why this is a totally ridiculous notion. Like I said, just because it takes me 5 years to get my first widget to market doesn't mean it will take 5 more to get my second widget on the shelves. It is common sense. And they should know that. But ZeroHedge has become the "Alex Jones" of the PM "news" world. They want to take common, everyday, logical events and blow them completely out of proportion so that gullible PM bulls will believe it (and of course, they will get more revenue).

As for whether or not the gold is even there, I have no idea. But you can't look at the first year of an endeavor like this and think that it has any bearing whatsoever on the validity of the notion that the gold is missing. As for your China example, I think you are talking apples and oranges. The gold that China has purchased was already on the market in a deliverable form in a system that has already worked out all of the logistical details for shipping gold to a buyer. The gold sitting in the Federal Reserve, Fort Knox, and wherever else it is sitting is not supposed to be ready for delivery at a moment's notice. Heck, they weren't expecting to deliver it at all. There are logistical issues with trying to decide how that is going to be delivered in such vast quantities. We can't possibly know what requirements Germany itself has placed on the deliveries. All I know is that having worked as a contractor for the government and for large organizations it is ridiculous to believe that anything of any importance is going to get accomplished in the first six months of a major project like this. Especially when one side (the Fed) likely isn't in any real hurry to get started with deliveries. Throw out the first six months and suddenly the gold can be delivered in 10 years. Throw out the first 10 months and the gold can meet my 6 year generous estimate. So their conclusion is completely illogical and has no bearing whatsoever on whether or not the gold is really there for delivery.

-----> That's all I have to say on the matter. <------ This was a bald faced lie....

 

[Jason in Enid]

It's taking so long because we don't have it any more. Our govt stole it and spent it, now they are trying to scrounge up as much as possible to send back to it's true owner.

 

[old digger]

It's taking so long because we don't have it any more. Our govt stole it and spent it, now they are trying to scrounge up as much as possible to send back to it's true owner.

Sounds about right!

 

[Red James Cash]

Yup,all the gold that held underneath the world trade center up and went missing,hmmmm,wonder where it went.

 

[TreasurePirate69]

I lied.... I do have more to say on the matter....

Did it ever occur to you people that it is highly possible that the delay is ON THE SIDE OF THE GERMANS? They are about to receive a bunch of gold and it seems reasonable that it will take them a considerable amount of time to figure out how and where they are going to store it. You didn't think they were going to put it into the trunk of Merkel's car did you? So isn't it completely reasonable to believe that it took Germany AT LEAST 6 months to figure out how they were going to actively manage the receiving and long term storage of the country's gold? Are they going to build a facility? Use private storage? How are they going to account for the gold going forward? Who is going to be in charge of the accounting? Who is going to protect it? How are they going to protect it? How are they going to vet any private storage firms? How are they going to satisfy their own populace that the gold is indeed still safe and hasn't been spent? And on and on. Can you imagine what would happen if they brought the gold back home and then somehow let it get stolen or embezzeled? No, they can't have anything happen to it or else heads would roll. They are dotting their I's and crossing their T's on this one. And that does't happen overnight.

What if it actually took Germany 10 months to decide all this and the actual first gold shipment only took 2 months to complete? Using the same flawed logic as this article uses, doesn't that mean the gold could suddenly be delivered in 3 1/3 years instead of the original 8 that was expected? Whoa!!!!!!! Wait a minute.... can't you see the HUGE difference that would make to the tone of the story?

20 years = "I told you they didn't have the gold! What a bunch of lying thieves! My world view is vindicated and we get more readers."

3 1/3 years = "What? They originally said it would take 8 years and they are actually going to deliver it in less than half that time! Perhaps the gold was there all along? Crap. It can't really be true. Someone must be lying because I just KNOW the gold can't be there."

Frankly, there is no way to know which way is more likely to be correct (if either of them). All I know is that this article is obviously using flawed logic to try and reinforce the belief that the gold is not there. Whether the gold is there or not is impossible to tell. But if people are using flawed logic to prove their belief system, then they are either really stupid or really desperate. It is perfectly fine to believe that the gold is not there. But at least back it up with reasonable logic and not ridiculous stories like this one. ZeroHedge doesn't care about telling you the truth. All they care about is protecting their belief system and thus their readership. Because if their belief system turns out to be false, then their readership evaporates and they are out of business.

And that my friends is what we call a "logical argument". It may not be right. But it is at least logical.

IF the gold is finally delivered in its entirety, how many of you will come back and admit that you were wrong? None. And you won't read a peep about it on sites like ZeroHedge either...

 

[Jason in Enid]

TP, I think you are taking this WAY too seriously. Most of us here are just having fun.

 

[TreasurePirate69]

I'm having fun too... I'm having fun watching people run away from addressing any of my logical arguments. No sweat as far as I'm concerned. My world view isn't at stake just because someone has shown that a single blog post is ridiculous. And I'm not sure why any of you would think your world view should be in jeopardy either. Why is it so hard to simply admit that this one blog post is clearly biased and illogical? Especially considering that it has no bearing whatsoever on the validity of the notion that the gold is not there? Isn't anyone willing to simply say: "You're right TP, this blog post makes illogical assumptions and should be ignored."? If you aren't willing to admit that then you should be asking yourself why not...

 

[jim4silver]

What may seem "logical" to some may not seem "logical" to others (you should do some studying on quantum physics to see why this is true even on the sub-atomic level).

The fact that the US only sent Germany a measly 37 or so tons when the total amount is 674 makes it clear on a "logical" level to me that they don't have all the original gold to send them back.

Sending their gold back is not complicated. Put it on a US military plane and send it back. I would bet that when Germany sent the gold here it didn't take 6 years, but I don't know that for sure.

Check out what gold leasing means and how long it has been going on by central banks and it is not difficult to understand why, in my opinion, the gold is not available (unemcumbered), even though the bars might be sitting in the US vaults.

TreasurePirate, I know by your posts (writing style, etc) you are a smart person, but often I think you like to be the contrarian here simply to be the contrarian, and that is great because we need somebody to abuse now and then.


All my opinion.


Jim

 

[TreasurePirate69]

What may seem "logical" to some may not seem "logical" to others (you should do some studying on quantum physics to see why this is true even on the sub-atomic level).

The fact that the US only sent Germany a measly 37 or so tons when the total amount is 674 makes it clear on a "logical" level to me that they don't have all the original gold to send them back.

Sending their gold back is not complicated. Put it on a US military plane and send it back. I would bet that when Germany sent the gold here it didn't take 6 years, but I don't know that for sure.

Check out what gold leasing means and how long it has been going on by central banks and it is not difficult to understand why, in my opinion, the gold is not available (unemcumbered), even though the bars might be sitting in the US vaults.

TreasurePirate, I know by your posts (writing style, etc) you are a smart person, but often I think you like to be the contrarian here simply to be the contrarian, and that is great because we need somebody to abuse now and then.


All my opinion.


Jim

Yes, all your opinion but once again you completely side stepped my point. I have never argued whether or not they have the gold or whether or not they SHOULD be able to deliver it in any specific amount of time....

My point which you are either missing or purposely ignoring is the following:

This article thinks it is logical to multiply the first year's shipment by 20 in order to come to the conclusion that it will take 20 years to finally deliver all the gold.

Do you agree with the estimate and means that the article uses to come to that conclusion or not? Simple question which should have a simple answer that is completely unrelated to whether or not the US has the gold in the first place. If you agree with the article then can you back it up logically by countering the points I've already made about the expected timings of the first year compared to other years?

Not trying to be contrarian. Just trying to have a conversation about whether or not the methods used by the article are logical and reasonable...

 

[jim4silver]

Yes, all your opinion but once again you completely side stepped my point. I have never argued whether or not they have the gold or whether or not they SHOULD be able to deliver it in any specific amount of time....

My point which you are either missing or purposely ignoring is the following:

This article thinks it is logical to multiply the first year's shipment by 20 in order to come to the conclusion that it will take 20 years to finally deliver all the gold.

Do you agree with the estimate and means that the article uses to come to that conclusion or not? Simple question which should have a simple answer that is completely unrelated to whether or not the US has the gold in the first place. If you agree with the article then can you back it up logically by countering the points I've already made about the expected timings of the first year compared to other years?

Not trying to be contrarian. Just trying to have a conversation about whether or not the methods used by the article are logical and reasonable...

I didn't mean to side step an issue. To be honest, I really didn't read the article attached herein very carefully. I have been following the "story" since it first broke. Generally the issue discussed is whether or not the US still has Germany's gold and whether said gold is promised to or "owned" by other entities.

With respect to the 20 year theory I agree with you 100%. Just because they only received a certain amount this year would not mean that the same amount will be given every year. It could in theory be more or less. I didn't realize you were focusing just the article itself and not the general facts of the event (Germany asking for its gold back).

PS My personal belief is that Germany will not get all its gold back ever. I think eventually they will be told to pound sand. Maybe they will be paid in US dollars for the value of the gold? But this is just my wild a$$ guess.

Just my opinion.

Jim

 

[TreasurePirate69]

I didn't mean to side step an issue. To be honest, I really didn't read the article attached herein very carefully. I have been following the "story" since it first broke. Generally the issue discussed is whether or not the US still has Germany's gold and whether said gold is promised to or "owned" by other entities.

With respect to the 20 year theory I agree with you 100%. Just because they only received a certain amount this year would not mean that the same amount will be given every year. It could in theory be more or less. I didn't realize you were focusing just the article itself and not the general facts of the event (Germany asking for its gold back).

PS My personal belief is that Germany will not get all its gold back ever. I think eventually they will be told to pound sand. Maybe they will be paid in US dollars for the value of the gold? But this is just my wild a$$ guess.

Just my opinion.

Jim

Jim, thanks for clarifying your position and with agreeing with me on the article. That was my only intention in commenting on this thread. This article is going mainstream and many people are starting to now quote the 20 year number as having some sort of meaning. My whole purpose was to try and explain that this article is bogus and doesn't prove a thing. It should be taken with a grain of salt. Unfortunately, too many people will just accept it as gospel without really even thinking about the validity of their argument.

I will let it go now. Peace.

 

[lastleg]

By now you should have heard that Moodys downgraded G/S to $900/15 in two years.

 

[TheCoinKid]

Haven't heard that, but that's fairly consistent with my "thinking"

 

[jim4silver]

By now you should have heard that Moodys downgraded G/S to $900/15 in two years.

How correct have they been in the past 10 years regarding gold and silver?

The article also says that the cost to produce an ounce of gold is 1100. I guess they think it is going to sell for 200 below costs. We'll have to wait and see about that one.

Moody?s Lowers Downside Targets to $900 on Gold and $15 on Silver - Yahoo Finance

Jim

 

[Marchas45]

LMAO Well I don't see them going that low but who the heck am I Lol Keep Stacking
As for the German Gold. Take a peak. Lol Here that Jim and TreasurePirate?