It's 10 P.M. In Frankfurt. Do You Know Where Your Gold Is? by Lam Thuy Vo -
October 25, 2012 3:24 PM
At a hearing last year, Ron Paul asked Ben
Bernanke if gold is money. Answer: No. So why do central
banks hold it as a reserve? Answer: Tradition.
Gold, as we've said before, is weird. People
still think of it sort of like money. Central banks around
the world still hold gold alongside actual currencies like
dollars, euros and yen. And they're adding to their gold
reserves at a rate of hundreds of tons a year worldwide.
A gold industry group recently
suggested that Portugal and Italy use their gold reserves
as collateral against new loans.
Just this week, Germany's federal court
told the Bundesbank to prove that the country's massive
gold reserve actually exists.
This isn't as random as it seems; more than
half of Germany's gold reserves are held at the New York
Fed, and hasn't been inspected by the Germans for decades.
This dates back to the '50s and '60s, when foreign governments
could still exchange dollars for gold, and often parked
their gold reserves in New York.
So over the next three years, 150 tons of
German gold will be shipped back to Germany for inspection.