Germany wants its gold bullion back from the Federal Reserve, but it's been told to wait seven years.
One should ask, why does Germany keep its gold in a vault in New York City? Why not in its homeland?
Short answer...faith in the American dollar as reserve currency since end of WWII and fear of takeover by USSR.
Gold at the Feds is basically collateral for quick loans of American dollars. But if American dollars aren't wanted as much...countries ask to repatriate gold.
Nixon took the dollar off the gold standard. Today, gold is being hoarded in many countries, including China, which has sold off a lot of its US bonds and is instead buying gold. This shows overall a lack of confidence in the US dollar and a growing confidence in gold.
Also failing the confidence test, is the World Bank, mainly funded by the US, which is now refusing to allow the US Government Accounting Office to conduct an audit. We will be seeing a lot of scandals involving US directed financial institutions...but turning to BRIC economies won't necessarily be any better for the world economy, in my view.
Yes, this is a public relations disaster for the Feds...really a laughing stock right now. But Germany wants to downplay everything, since it doesn't want to look like it 'lost' its gold!
BTW, I really like Max Kaiser for financial info ... outrageous but really intriguing. The National Taxpayers Union is a very good source.
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