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
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.