In a press release, the Bundesbank explains, “With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time.”
The plan is set to be completed by 2020, and will remove 300 tonnes of gold from New York, reducing Germany’s percentage of reserves held at the New York Fed from 45 percent to 37 percent. Another 374 tonnes will be relocated from Paris to Frankfurt, which removes all of Germany’s gold held in France’s capital. Since France and Germany both use the euro as national currency, the Bundesbank notes it is “no longer dependent on Paris as a financial centre.” Gold reserves held in London will remain the same at 13 percent.
Germany’s effort to bring its gold back home comes after the country’s Federal Court of Auditors called on the Bundesbank to strengthen its bullion auditing procedures, since the gold holdings have never been fully checked. Naturally, Germany’s motive for storing more gold at home is being questioned. The euro currency was first introduced in 1999. Did it really take the Bundesbank more than a decade to realize it is “no longer dependent on Paris as a financial centre?”
When it becomes serious you have to lie…