What Happened to Germany’s Gold?

“Silence in the face of evil is itself evil. God will not hold us guiltless. Not to speak is to speak. Not to act is to act”. Dietrich Bonhoeffer

When you go back to the beginning of all this, if you go back to prior to the Federal Reserve, it is clear to me that the name of the game was financial power and wealth. … Now they are beginning to think about world power. After a person has all the money in the world that you could possibly use to buy anything you want, what is left to capture your imagination? The answer of course is power.” International Forecaster, 1/18/14, p.2. G Edward Griffin

“This cabal bear allegiance to no nationality, no philosophy or creed, no code of ethics. They are not even motivated by greed, but power. The power that the control of the money supply inevitably brings with it … They already got the money. They’ve got it locked down. Now they are striving for this ‘New World Order’ (that is their name for it). They want all of the world bound into one political unit which they dominate, not only with money but with military and psychological means and education and media propaganda.” International Forecaster, 1/18/14, p.3. International Forecaster, quoting the “Century of “Enslavement: The History of the Federal Reserve”. James Corbett


Last week. I published an article, “Is the Federal Reserve a Criminal Conspiracy or Just a Lousy Manager?” My analysis indicated that the answer was that they were a criminal conspiracy and a lousy manager. See http://www.verticalrising.com/vlraven and choose Politics and the article should pop up or just click here. Now we have a situation where the German government asked for their gold back. It seems that after WWII, they stored about 1,500 tons with the FED in safekeeping to keep the Russians away from the gold if they invaded. Recently, they asked for the gold back. It was kept by the U.S. government in safekeeping for the German government. Thus, this was an international agreement. The U.S. said we would give it back to you in 6 years. Finally, a token payment of 37 tons was shipped back to Germany but the gold was not the original gold bars. This is significant. This means that the original gold bars are no longer in existence. What happened to them? This is an obvious question but no one is talking. Glen Beck worked up a video that is very informative as well as dramatic. A URL reference is found at the end of this article. Now we would like to explain what most likely happened. Then the Glen Beck dramatization will make more sense.

Re-hypothecation of Assets

First, the only way to find out exactly what happened is to perform a detailed audit of the Federal Reserve – an event that both the FED and Congress have been fighting for years. The last audit was in 1953. This gold situation is probably one of the reasons that they do not want an audit. Many believe that an audit will show that the gold is no longer there. Our national gold and other nation’s gold that was given to us for safekeeping is mostly if not totally gone. This represents a theft beyond comprehension. Theft like this cannot take place without complicit cooperation with others in auditing agencies, the congress, the press, transportation industry, central banks and governments. If true, this is the “Mother” of all “White Collar” crimes. A long time ago, I wrote a dissertation on “White Collar Crime” – “How to Detect Theft in a Retail Warehousing Environment”, so I understand the behavior in collusive theft – “everyone is doing it so why not me?”. However, this is a massive white-collar crime that is hard to comprehend because it involves trusted officers of the courts, government and Congress.

Glen Beck does an excellent job making the case that there is virtually no gold in Ft. Knox or the FED vaults because he claims that the gold was re-hypothecated by Rothschild central banks and then eventually physically sold. Before seeing the size of the transactions, let us examine how it works.

Re-hypothecation is a word that means the use of another’s asset to make money. It is illegal for you and me to use another’s bank account as an asset and make money from those not owned funds. However, in banking it is legal. Let me pose a hypothetical situation that could have occurred and one that Glen Beck video demonstrates.

Step 1: German government deposits the gold in the safekeeping of the U.S. government. In this case, it was 1,500 tonnes (a metric ton) stored in the NY FED.
Step 2: The FED “Rents” that gold to a gold bullion bank as an asset for a year at say 3.0%.
Step 3: The bank puts the asset on their books and gets loans based on the gold asset up to 10 times the value of the gold. Let us use 1 ton as an example. The scope is much larger. Multiply the results by 1,500. I will use rough numbers to illustrate what is going on.
o  1 ton = roughly $31.2 million asset on bank’s books.
o  Borrow ten times value = $312 million. The FED can just create the money to provide the “loan”.
o  Enter borrowed money into the stock market  During this period, the market went up 10 % on average = $31.2 million gross profit less 3% cost of $936K leaving a $30.264 million net profit.
o At end of year, return the gold to FED or “Rent” it again.
This has been going on for years. If the market for gold goes up more than 3%, the bank could be in trouble dependent upon how they invested the money.
Step 4: Some of the banks get “greedy”. They sell the gold planning to buy it back at a lower value. This makes them an additional $31.2 million
Step 5: A problem is introduced by Germany asking for their gold back. The FED no longer has it. They “rented” it and the “renter” sold it. Thus, the Gold bullion bank no longer has it; they “sold” it. In order to return gold to Germany, the FED must buy new
gold. If the price of gold has gone up significantly, they will be in a conceptual “short squeeze”
Step 6: After purchasing some of the gold back, the FED sends 37 tonnes of “new bars” not the old ‘German bars” back to Germany. This is less than 10 % of the amount placed over here for safekeeping.

Size of the Problem

Germany’s demand for repatriation of their gold is very significant. In 2011, the German government’s central bank, Bundesbank, was audited by their internal equivalent of the GAO and found that Germany had 3,400 tonnes of gold on their books worth about $200 billion. The German people are very sensitive to this because memories exist in families of the terror of the hyperinflation of the 1920s. To give an idea of the amount of this security, consider that Germany has about 30 million people and the US has about 300 million. Thus, this represents about 34,000 tonnes if it were the US. Records in the US show that we never had more than 20,000 tonnes and now are reporting 10,000 tones or1/3rd of the security that the Germans have. The German gold was stored as follows:
o 1450 tonnes in Germany
o 1950 tonnnes in other countries

The other countries are the U.S. and France.

o US NY FED had 1,500 tonnes worth $38 billion;
o Bank of France had 450 tonnes worth $27 billion.
They also noted that the gold overseas had not been audited. The German central bank reply to their GAO was, “We trust the other central banks”. Then, they must have had second thoughts because in 2012, they asked for a repatriation of their foreign holdings.

Specifically, they asked repatriation of:

o 300 tonnes from New York FED or $17.6 billion
o 374 tonnes from France $22 billion
In 2013, France repatriated zero and the NY FED repatriate 37 tons with the rest due over by 2020. This is a major blow to credibility for central bankers. Jim Sinclair has been quoted as saying, “German gold repatriation is the most significant gold event in 50 years, beginning the end of the US dollar as a reserve currency. . . . History will look back on this salvo fired across US war financing as being the beginning of the end of the US dollar as the reserve currency of choice.”
We also have Eric King, interviewing on Jan 18, 2014 Eric Sprott, the Canadian billionaire, asking what 2014 will bring to gold. He said, “And no one should be surprised to see gold going to new highs, particularly if we find out everything was manipulated. What if all of the details come out that all of these banks were conspiring together as they were conspiring together in LIBOR rigging? So I’m absolutely convinced we are going to go to new highs this year. In fact, it might be a very stunning recovery, i.e. in a very short (period of) time when the truth comes out. And believe me the truth is going to be coming out here. And I find it very ironic that Deutsche Bank would immediately quit the London gold fix. I suspect that their regulator said, ‘By the way, do you know your trader has been ripping people off here?’ And they say, ‘OK, fine. We’ll just quit the LBMA right now.’ They may be trying to limit their liability. Who knows? But I’m sure that Deutsche Bank knows why they quit the LBMA today because of this announcement by the German regulator.”

Where did the Gold Go?

Where did the gold go? It appears to have been sold but who bought it? Given that the gold was stolen goods, there are legal implications as to who really owns it. Legally, you cannot make money off stolen goods. If you did not know it was stolen but made a profit, then you must return the profits.

For years, the central banks have been manipulating the price of gold but that game might be over. China yesterday introduced a new practice with gold miners. Up to that point, the LBMA would drive the price down and then get contracts for forward production at less than the contract price. Currently, on the six Chinese exchanges about the world, the gold price has a premium of $15 to $30 per oz. The LBMA is offering futures at less than the spot price. China is now offering the equivalent of spot plus premium to those gold produces per the January 18, 2014 article, “China Moves to Crush the West in the Gold Market”, January 18, 2014. In this article, a London metals trader, Andrew Maguire, in his interview with King World News reports, “An increasing number of producers are being approached by China to buy their forward production, and at a premium over spot….And I have reliable information from one of the producers I deal with that they are getting a forward sale price equivalent to just a small discount over the strong Shanghai closing wholesale premiums. They (those premiums in Shanghai) average around $15 per ounce, but have been as high as $30 per ounce.”

These positions are important because it is precisely these forward positions that have historically been relied upon by LBMA bullion banks to pay re-hypothecated bullion positions at a discount. This appears that China is actively moving to put a market squeeze on gold and silver shorts. And, they have the resources to do so.

How Much Gold Does the US Have?

How much gold does the US have that is unaudited? No one knows since the FED gold reserves have not been audited since 1953 during the Eisenhower administration. The chart below shows what has been reported. The increase to 20,000 tons came during WWII, when the FED said, “send me your gold for safekeeping” to South East Asian countries. In the 50s, the charts show that much may have been returned. However, was it? We now know that the FED has not honored those “Gold Certificates” issued by them in the 40s.

Two possibilities exist – first the gold exists and second it does not exist. First, the US has the 8,000 ton reported but the US will not let anyone audit it. This suggests that the US may have close to zero of the gold reported. Evidence from Germany is that this is true. The FED cannot produce the gold. Thus, it is likely that virtually no gold exists and it must be bought from the market with new demand when owners want to get their deposits back.

Germany is not the only one. We have further evidence from China since in 2009 China asked for their gold back that were deposited by the Nationalist Chinese in WWII. The FED denied the claims stating that the gold certificates were fake. Yet records show that the gold was given to the U.S. for safekeeping. However, this is not the  As a result, the nation of China on November 11, 2009, executed a lien on the U.S. and the FED for $47 trillion. The lien was filed in the World Court. Technically, this action allows them to seize U.S. assets from around the world and even at airports. To date, that right has not been enforced or executed.

Because of China and now Germany and the refusal of the FED to be audited as to their gold reserves, it is reasonable to put a high probability of the hypothesis that there is little if any gold in Fort Knox, West Point or the NY FED depositories.

What is China’s Game Plan?

It now appears as if China is “Calling” the hand by first, the lien, and then the German “partner” and their actions. Let us examine this assertion by seeing how China has prepared itself.
o China is exposing the FED as having little or no gold.
o China has the world’s largest gold supply. See my articles on “The Currency War and What It Means to You”, on http://www.jpfinancialeducation.com, Part I, https://docs.google.com/file/d/0B0LQShXlJ1CJcVdUVHo2VXRSWkk/edit and Part II, https://docs.google.com/file/d/0B0LQShXlJ1CJMWQxZmdqWlRsd0k/edit
o China has established six global trading exchanges in the world that trade in Yuan not dollars. These exchanges also contain rare metal exchanges.
o China has established 23 national bi-lateral trade agreements with the world’s largest trading partners to trade in Yuan not dollars.
o China, last week, bypassed the U.S. as the world’s country with the largest trade.
o China has accepted international law and used it to file a $47 trillion lien against the U.S. and the FED.   This was reported by Christopher Story in “Global Analysis International Intelligence”, December 14, 2009.   However, this “ace” has not been enforced.  This number is associated with the Chinese gold lent the US during the 30s to back the dollar. According to the Golden Trust of Chiang Kai-shek by Arthur Heinrich Stern, seen Here a $25,000,000,000 loan in gold was made by Chiang Kai-shek to FDR and the Federal Reserve. in April, 1934,  before FDR increased rate to $35.00 per troy oz. Thus,$25,000,000,000 / $20.67/troy oz  = 1,209,482,341.56 troy oz
1,209,482,341.56 troy oz  / 32,150.75 troy oz/tonne  = 37,619.10 tonnes (metric ton).  Also, 1,209,482,341.56 x $35 = $42.315 billion that was used to back the dollar.  This got the US on a gold backed Federal Reserve Note or dollar and industry started moving again. Thus gold, starting at $19.75 per troy ounce was raised to $20.67 in 1834, and $35 in 1934. In 1972, the price was raised to $38 and then to $42.22 in 1973. 
These events were before the current Chinese government was formed.  This represents  37, 619 tons of gold.  This is what should be in safekeeping in the Treasury for the nation of China.  The real question remains, whose gold was it?  It wasn’t the Taiwanese government or the current mainland government.  Chiang Kai-Chek made the deal for the Chinese government before he went to Formosa.  Was it the elders gold?
o China is apparently leaning on its second largest trading partner, Germany, to get involved against the Rothschild clique that controls finance. – My view.
The end game, of course, is to make the Chinese Yuan a gold backed international currency. However, the Chinese do not want to appear as if they are doing this overtly. They would like others to force the issue and Germany is beginning to do so.

How Are the Leaders Thinking?

One cannot but wonder about the thinking processes of the FED leaders. Specifically, are the retrospective or prospective personalities? The clinical test is very simple. Observe the test subject’s capacity to solve different conflict scenarios. If their solutions to the conflicts are relatively easy and possibly enjoyable, then they are Prospective. This seems to be the Chinese leader’s makeup. They see a problem of what to do to become the world’s trade currency and they directly address what is required in multiple dimensions with different approaches. However, if they demonstrate a propensity to procrastinate (hoping for a solution for their dilemma to be presented to themselves) and/or get frustrated and become aggressive, than they are most likely Retrospective. This seems to be the thinking of the FED and its leaders. They go back to their standard way of addressing the problem do nothing different and become aggressive in doing so – forcing the price of gold down and attempting to strong arm the gold producers to accept less than their mining costs. For those that want to pursue this line of thought further, check out Dr. Victor Fischer’s book on the topic. IMPROVING YOUR THOUGHT PROCESS eBook VICTOR H. FISCHER_ Amazon.us.pdf

Where Did the Gold Go?

The gold has left the ETFs, the Treasury, the COMEX and the London Exchange. Who has been buying it? Records show that much has been moving to the East. Presumably, this is China and India. However, this this has not been revealed in publications to my knowledge. It could also be in private vaults about the world or in Rothschild vaults. The prices have been artificially moved low and massive purchases have taken place. At this point, one wonders but cannot prove, is this the last play before China says, “checkmate”. Being in possession of the gold would allow them to say, “The Yuan is backed by gold and we will repatriate Yuan for gold at $3,000 / oz. or any figure the Chinese pick”.

With that said, Glen Beck did a good job of dramatizing re-hypothecation. It is worthwhile viewing.  Glen Beck Video 1/16/14: What Really Happened to Germany’s Gold? Here


I started this effort by seeing that Glen Beck did a good job of explaining re-hypothecation. Then, I was curious about the amount of gold that the Germans were talking about. Finally, this introduced me into the greater topic of total gold in the FED, no audits of the FED, China’s moves into establishing the Yuan as the international exchange currency and commentators such as Jim Sinclair who feel that that the German move is historic and will go down as the first shot to kill the dollar.

No one knows how much gold is held by the FED either U.S. or foreign safekeeping. This in itself is scary. Why? They are a private company, not a nation. They have infiltrated our government to give themselves more anonymity than any other single entity in history. We know less about them then we do of our National Security Agency. I feel that this is very dangerous to the American people.

China seems to be the force that will expose the danger but they are choosing to do so
Indirectly – as is their way. This is the year that everything seems to be coming to a head and will pop. Only time will tell but I expect change before the 2014 elections. The political “elite” desire that it would not occur before the 2016 elections; however, the forces of change from nations are real and are being felt. I recall a quote from J.R. Tolkin, “Never laugh at live Dragons.”

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