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Author Topic: Gold  (Read 519 times)
Roger Bacon
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« on: January 16, 2013, 07:51:27 PM »

I was just reading an article about Gold

From the Bundesbank:
By 2020, the Bundesbank intends to store half of Germany’s gold reserves in its own vaults in Germany. The other half will remain in storage at its partner central banks in New York and London. 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 following table shows the current and the envisaged future allocation of Germany’s gold reserves across the various storage locations:

Can someone explain that too me real quick?  

I know everything is global, but why wouldn't Germany store all its gold in Germany?

Huh
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BB
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« Reply #1 on: January 16, 2013, 08:01:29 PM »

This goes back to the Cold War, back when Germany was surrounded by communist controlled countries, the West Germans had a policy of moving some of it's gold stores abroad and further West, fearing there might one day be an attack by Russian and the other Eastern Bloc countries.

Now they don't fear it as much now, so they want their cash back Smiley.

Edit - This is common in Europe and many other countries that where bordered by unstable governments. Canada, US, England, and France were traditionally seen as safer countries, so portions of many nation's golds reserves are split amongst banks in those areas.
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Roger Bacon
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« Reply #2 on: January 16, 2013, 08:17:30 PM »

This goes back to the Cold War, back when Germany was surrounded by communist controlled countries, the West Germans had a policy of moving some of it's gold stores abroad and further West, fearing there might one day be an attack by Russian and the other Eastern Bloc countries.

Now they don't fear it as much now, so they want their cash back Smiley.

Edit - This is common in Europe and many other countries that where bordered by unstable governments. Canada, US, England, and France were traditionally seen as safer countries, so portions of many nation's golds reserves are split amongst banks in those areas.

Thank you!

I tried to google this but couldn't figure it out.
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Hugo Chavez
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« Reply #3 on: January 16, 2013, 08:32:01 PM »

Jag post in 3... 2... 1...
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Roger Bacon
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Roger Bacon tries to be witty and fails


« Reply #4 on: January 16, 2013, 08:46:30 PM »

Jag post in 3... 2... 1...

Please delete this before she gets on!!!  Shocked Shocked
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syntaxmachine
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« Reply #5 on: January 17, 2013, 12:45:35 AM »

I was just reading an article about Gold

From the Bundesbank:
By 2020, the Bundesbank intends to store half of Germany’s gold reserves in its own vaults in Germany. The other half will remain in storage at its partner central banks in New York and London. 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 following table shows the current and the envisaged future allocation of Germany’s gold reserves across the various storage locations:

Can someone explain that too me real quick?  

I know everything is global, but why wouldn't Germany store all its gold in Germany?

Huh
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Roger Bacon
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« Reply #6 on: January 17, 2013, 02:12:02 AM »



It takes half of all their gold to do that?
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Irongrip400
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« Reply #7 on: January 17, 2013, 06:40:15 AM »

Fuck PIP, didn't you see Die Hard With A Vengeance? That's what they're really worried about.
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syntaxmachine
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« Reply #8 on: January 17, 2013, 08:45:07 AM »

It takes half of all their gold to do that?

Presumably they could store less of the gold overseas to achieve that particular function but have done some maths that indicate half is an optimal amount.

Can you link to the article? The excerpt you quote suggests that currently, more than half of the gold is overseas and that Germany is ramping up domestic storage (otherwise, it ought to have opened with "by 2020, the Bundesbank intends to store half of its gold reserves in partner banks in New York and London." If they're ramping up domestic storage, it's the sort of news goldbugs will seize upon as it apparently represents an endorsement of gold by the Bundesbank; if they're ramping up overseas storage for the purposes of making that gold easily exchangeable, the opposite seems true.

Edit: I looked up the news and it confirmed what I said above (I wasn't sure because you didn't link to any articles). So the only real answer here is that they've done maths that indicate that having half of that gold available for quick exchange is an optimal strategy for them. What else would the answer be, PIP? Do you feel there is some deep mystery here that needs explaining?
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Roger Bacon
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« Reply #9 on: January 17, 2013, 11:22:40 AM »

Presumably they could store less of the gold overseas to achieve that particular function but have done some maths that indicate half is an optimal amount.

Can you link to the article? The excerpt you quote suggests that currently, more than half of the gold is overseas and that Germany is ramping up domestic storage (otherwise, it ought to have opened with "by 2020, the Bundesbank intends to store half of its gold reserves in partner banks in New York and London." If they're ramping up domestic storage, it's the sort of news goldbugs will seize upon as it apparently represents an endorsement of gold by the Bundesbank; if they're ramping up overseas storage for the purposes of making that gold easily exchangeable, the opposite seems true.

Edit: I looked up the news and it confirmed what I said above (I wasn't sure because you didn't link to any articles). So the only real answer here is that they've done maths that indicate that having half of that gold available for quick exchange is an optimal strategy for them. What else would the answer be, PIP? Do you feel there is some deep mystery here that needs explaining?

Nothing more, I was just curious as to why a central bank would store half of its gold outside country.  

I assumed it was security related as BB said.  I know countries around the world use the New York Federal Reserve vault, and Fort Knox to store gold, documents and important artifacts.

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