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Bundesbank confirms Germany's gold is in play

Section: Daily Dispatches

11:10a ET Monday, August 24, 2009

Dear Friend of GATA and Gold:

Germany's central bank, the Bundesbank, today confirmed that much of its gold is held outside the country at "trading centers" where the bank conducts "its gold activities."

The Bundesbank's statement, unsigned and issued by the bank's press office, came as an e-mailed reply to GATA consultant Rob Kirby of Kirby Analytics in Toronto (, who sought the Bundesbank's comment on international journalist Max Keiser's recent assertion that the Bundesbank had told him that most of Germany's gold is in the custody of the United States in New York:

While contending that Keiser's assertion was "not correct," the Bundesbank's reply to Kirby acknowledged that at least some German gold reserves indeed are held outside the country, maintained that this is common practice among central banks, and implied that the Bundesbank is trading gold despite its long-held position that it is not selling the gold it has been entitled to sell under the European central bank gold agreement.

The Bundesbank's reply to Kirby did not specify its "market-related reasons" for keeping gold at "major gold trading centers," nor the bank's "gold activities" there. But central banks often "lease" gold, lending it to bullion banks for sale into the market in exchange for a tiny interest payment, a currency-intervention mechanism used by central banks to suppress the gold price and support government currencies and bonds.

If Germany or the world had a financial press interested in reporting on the gold market seriously, the obvious follow-up question to the Bundesbank would be to ask it to specify its "gold activities" at those "major gold trading centers" and the purposes of those activities. Unfortunately few if any gold market reporters and commentators ever put questions directly to the largest holders of gold, central banks.

Perhaps some of the documents involving the U.S. gold reserve that the Federal Reserve Board is refusing to release to GATA involve the German gold reserve, the Bundesbank, and gold leasing.

The Bundesbank's reply to Kirby is appended.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Sent: August 24, 2009 4:29 AM


Subject: Antwort auf Ihre Anfrage 2009/008962 - PRESSE-BBK-WEB-Formular

Dear Mr Kirby:

Thank you for request.

Please note that the quote of Max Keiser in the video on "Youtube" is not correct and please note that it has not been authorized by the Deutsche Bundesbank.

The Deutsche Bundesbank keeps a large part of its gold holdings in its own vaults in Germany, while some of its gold is also stored with the central banks located at major gold trading centres. This has historical and market-related reasons, the gold having been transferred to the Bundesbank at these trading centres. Moreover, the Bundesbank needs to hold gold at the various trading centres in order to conduct its gold activities. It is common practice for central banks to keep part of their gold reserves abroad.

Besides the Deutsche Bundesbank, other central banks and official agencies place gold in the custody of foreign central banks. According to its own data, the Federal Reserve of New York holds gold stocks for almost 60 different central banks and official agencies.

The Deutsche Bundesbank can withdraw gold from its holdings with foreign central banks at any time. The Bundesbank’s gold is stored in the form of individually identifiable bars. Gold stocks are subjected to regular audits. Relevant inventory controls are conducted on site.

The Bundesbank applies the principles of safety, cost efficiency, and liquidity to the management of foreign reserves in general, and to that of gold reserves (and, in this context, to the question of custody location in particular). As a rule, the physical transfer of gold reserves to another storage location cannot be ruled out. On the other hand, transportation to Germany and safekeeping in the Bundesbank’s own vaults would entail high costs.

For further information please refer the "Joint Statement on Gold":


Yours sincerely,

Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main

Tel. +49 69 9566 - 3511 or 3512
Fax: +49 69 9566 - 3077

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