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Why Did Germany Lose Interest In Getting Its Gold Back?

Instead of seeking more questions, it seems that Germany decided to put an end to the speculations about their Fed-kept gold reserves by asserting that the U.S. has “everything under control.”

Two years ago, Germany requested the return of their 300 tons of gold that are being stored in New York. However, a year after its demand, the country was only able to obtain a paltry amount of 5 tons from the Fed. Economists speculated that the reserves have been wiped clean by the U.S. to be used for its debt. On the other hand, some speculated that the delivery to Germany is taking a long time because the reserves in New York need recasting– a supposition that was confirmed by the Bundesbank.

“The Bundesbank never doubted the integrity of the foreign gold-storage sites,” said Bundesbank’s Council Member Carl-Ludwig Thiele. “We were able to see everything we wanted to see in New York. As far as we’re concerned, there are no more open issues.”

While Thiele seems convinced that Germany’s gold is intact inside U.S. vaults, events from two years ago suggest otherwise. In 2012, German officials were
denied access to the vaults when they demanded to inspect their country’s entire reserves. It would be easier to put an end to the negative speculations if only the U.S. allowed the officials to do their own examination.

One explanation from all these hullaballoo is that Germany is helping the U.S. save face. Instead of pressuring America to reveal the truth about its reserves, Germany may have given the U.S. time to find the resources to replace the lost gold. There’s no better time to buy gold than now, especially since the precious yellow metal’s prices are declining due to a stronger dollar and foreseen higher interest rates. As of this writing, gold prices are still below the $1,200 mark. Another explanation is that Germany probably “took the higher road” and accepted the fate of their reserves in order to remove a potential irritant that may lead to WWIII.

Whatever the reason, it would seem that Germany’s chances of seeing their gold right now are very low. Hopefully, the U.S. will be able to provide a better reason to the public as to why Germany’s gold is being kept secret from its owner.

About Stephanie

Stephanie Rosen is a financial market analyst and a blogger. She writes about stock market and investment opportunities around the world. You can find her latest ideas on here. Just signup our news letter today and receive regular updates of Stephanie.