With this week’s reports that Germany repatriated 1,000 tons of its gold reserves from the Bank of England between 2000-01, and is repatriating 150 tons of its gold reserves from the NY Fed over the next 3 years, clearly the awake participants have realized the music stopped long ago, and are grabbing their physical gold chairs. 

It is now inevitable that an avalanche of central banks, hedge funds, and wealthy investors worldwide will begin to emulate Venezuela and Germany and request physical delivery of their unallocated (rehypothecated) ‘gold’.  

In an amazingly weak and futile attempt to stem the inevitable onslaught of delivery and repatriation requests, CNBC’s senior editor John Carney has released an editorial claiming that it matters not whether the gold held at the NY Fed and the BOE is filled with tungsten, has been leased or swapped, or that it even exists- all that matters is the Fed’s bookkeeping ledger that states the gold is there
CNBC begins by attempting to claim that it doesn’t matter whether Germany’s gold reserves held at the NY Fed are actually there and tungsten free, as long as the Fed says it’s there:

In reality, it does not matter one bit whether the Federal Reserve Bank of New York actually has the German central bank’s gold or whether the gold is pure. As long as the Fed says it is there, it is as good as there for all practical purposes to which it might be put. It can be sold, leased out, used as collateral, employed to extinguish liabilities and counted as bank capital just the same whether it exists or not.

Carney then attempts to claim the gold serves no actual purpose unless the Bundesbank wants to go into the gold watchmaking business:

The actual presence of the gold wouldn’t make a lick of difference unless, say, Germany’s central bank decided it wanted to start using the gold for some practical, non-monetary purpose like making watches.

CNBC would love investors to believe it’s not the actual physical Central Bank gold reserves that matter, it’s their book ledgers!

For almost all imaginable operational purposes, the actual existence of the gold in Fort Knox or in the vault beneath the FRBNY’s Liberty Street headquarters is irrelevant. The bookkeeping is what really matters here. So long as the Fed says Bundesbank owns X tons of gold, the Bundesbank can act as if it did own the gold—even if the gold had somehow been swallowed into a gold-eating galactic worm hole.

At least Carney is rational enough to acknowledge what happens when the jig is up:

I’m sure the Bundesbank officials understand this quite well, even though the German Audit Court does not. There is nothing to be gained by inspecting the gold. If it is all there and pure, there is no difference from an undiscovered absence. But if the gold isn’t there, well, calamity could follow as trust in the central bank gold depositories evaporated instantly.

Where there is smoke, there is always fire. Rather than investigating the source of the smoke, CNBC goes into overdrive MOPE denying the existence of the smoke.
Unfortunately for the Fed and the BOE, Hugo Chavez & now the German Audit Court have triggered a coming avalanche of physical gold delivery and repatriation requests.

    • Most of the girls of my age don’t have any gold or silver jeweleries. All they care is about the latest fashion, gadgets, songs, etc. When they do have one, they don’t put much value on it so they don’t care that much if they lose it.

  1. Wait and see what is going to happen now that all countries that have entrusted their
    Gold to the Fed. Total demostrative chaos. The Fed will be exposed and need to buy the Gold on the open
    market to replace the Gold they have leased out and hence we will have $10,000 Gold!

  2. Hey, you know what I own a Lamborghini. That’s right. 
    that’s the ticket. You want to buy it from me? Great. Got the paperwork right in my office. You want to see it first, test drive it. Not necessary. All that matters is what I tell you.  

  3. Carney actually may not be lying (in his own mind at least) because in the mind of the equity lemming title is as good as physical ownership.  In a similarly muddled fashion they confuse money with credit and debts with assets.  Remember, these “experts” and “sophisticated investors” cannot even define the most basic terms.  They believe paper is wealth, dictats from the Fed are ultimate truths and gold is a concept or idea as opposed to a physical element on planet Earth. 

    How disaappointed they will be….

  4. So Carney found a dealer that could still get real LSD. If this guy is right then Germany and others that want their gold should sell their gold that is on the books and use the money to buy real gold on the open market. Would be a lot like playing the game ‘hot potato”.

    • I think this will likely happen and they won’t get their physical gold back.  They will get IOU’s for the missing gold and they will use this paper to buy gold in the open market.  The re-re-re hypothecated (or missing) gold will never be counted, because this would mean the end of the banking charade.  
      It is a wonder that Germany is doing this, because this points to their existence as a sovereign nation, which flies in the face of the One World Government that its elites think they’re heading towards.
      Obviously, there are multiple agendas happening under our noses

    • If they weren’t able to buy physical gold cheaply, then they may also start to buy physical silver as a reserve. I’m sure that if they sell their paper gold and then use that amount to buy physical gold, it won’t be enough for everyone else to get enough gold.

  5. I only wonder, why only 150 tons and why they need 3 YEARS to do that? 3 years for 150 tons? Chinese do 150 tons before breakfast! That only suggests THERE IS NO FCUKING GOLD and Germany gave the Americans 3 years to find it on an open market… but what about the rest?

  6. I think I’ll starting acting as if I have 8000 tonnes of gold.  Maybe John Carney will want to buy some.  I have a special for him.  Half off as long as he never asks to see it or take possession.  It comes with a really nice framed receipt for his wall.

    • Or, you could make claim to a gold mine. Sell junior mining stock. It doesn’t have to contain any gold. Actually, it would be best it didn’t contain any gold. If it did you could keep it for yourself.

    • Those, which are the majority, that are still confident in the government, may not be able to understand what you are talking about. This group of people will embrace their savior ‘the government’ even more. The hypothetical ‘They’ know this. Listen to what the ‘normal’ person babbles about. These people must have somehow missed their calling as brain surgeons and theoretical physicists. Sad thing is, society, as we know it now, is being held together by this.

    • I have lost my confidence in the government after I’ve started to buy physical silver. A lot of events and reasons made me lose my confidence. Now, I’m planning to buy a legal weapon to defend against the government if it ever turns into a tyrant.

  7. “In an amazingly weak and futile attempt to stem the inevitable onslaught of delivery and repatriation requests, CNBC’s senior editor John Carney has released an editorial claiming that it matters not whether the gold held at the NY Fed and the BOE is filled with tungsten, has been leased or swapped, or that it even exists- all that matters is the Fed’s bookkeeping ledger that states the gold is there. ”

    If this same “logic” is applied to Mr. Carney’s own life, perhaps he would be just as happy with an official certificate of being alive as he is with actually being alive?  After all, if he has a certificate, it MUST be so!

    We really don’t need to look too far to find some fine examples of how short physical gold and silver really are and how much of this market is pure paper BS.  Whenever Eric Sprott or other large buyer puts in an order for a large amount of silver, it never seems to come from any large hoard of old bars.  No, it ALWAYS comes 3-4 months later as BRAND NEW BARS.  Conclusion:  there really aren’t any large bar hoards available from which to satisfy new orders, so they MUST be satisfied with newly produced bars.  This, of course, is why it takes months to fill these orders.

  8. I work for a medium sized city in California.  Every year the city’s finances are audited.  It would be unthinkable to tell our auditors to just take our word the the numbers we give provide, no need to look into any further.  so they would just come in to get the numbers in our balance sheet and p & l ???  Audit could take just a few minutes to give them the financial papers ???  What a joke these CB’s are.  Not having an area to view the gold ???  The only reason not to audit the gold is that there is something to hide……..wow, maybe it’s not there…………..keep stacking  

  9. @ Crissy
    That is the bad part of being wealthy. When you are ripped off, you are ripped off big. I am so poor that when a thief broke in my house looking for money, I got up and started looking with him.
    You just made my morning

  10. Well if that avalanche of demands for physical gold does happen, then it looks like we should surf on that avalanche with our golden snowboard! What I mean is that we should buy more physical gold before that avalanche happens because gold’s price will rise since the bullion banks don’t have the physical gold.

  11. This is not surprising at all.

    They are simply applying the same criteria to PM’s as they do to all Fiat Backed Financial Vehicles.
    All that matters is the PAPERWORK!

    Lays the groundwork for future whiners and criers that will surely emerge when they cannot
    take physical delivery of all those tons of PM’s that were re-hypothecated endlessly!  

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