Tag: repatriation

Action and Reaction

If you think a $1 trillion infrastructure boondoggle and allowing mega-corps to repatriate trillions in overseas funds tax-free is going to Make America Great Again, you are delusional. Hussman provides some inconvenient truth.

Guest Post by John P. Hussman

“My advice would be that several principles should be taken into account as you make these judgments. First of all, the economy is operating relatively close to full employment at this point, so in contrast to where the economy was after the financial crisis, when a large demand boost was needed to lower unemployment, we’re no longer in that state. CBO’s assessment is that there are longer-term fiscal challenges; that the debt/GDP ratio at this point looks likely to rise as the baby boomers retire and population aging occurs; and that longer-run deficit problem needs to be kept in mind. In addition with the debt/GDP ratio at around 77%, there’s not a lot of fiscal space should a shock to the economy occur; an adverse shock that did require fiscal stimulus.

“I think what’s been very disappointing about the economy’s performance since the financial crisis, or maybe going back before that, is that the pace of productivity growth has been exceptionally slow: the last 5 years, a half percent per year; the last decade, one and a quarter percent per year. The previous two decades before that were about a percentage point higher, and that’s what ultimately determines the pace of improvement in living standards. So my advice would be as you consider fiscal policies, to keep in mind and look carefully at the impact those policies are likely to have on the economy’s productive capacity, on productivity growth, and to the maximum extent possible, choose policies that would improve that long-run growth and productivity outlook.”

Janet Yellen, 11/17/16 testimony to the Joint Economic Committee

Continue reading “Action and Reaction”

IS IT SAFE?

Is your gold safe in the Federal Reserve vaults beneath Wall Street?

Of course not.

The number of paper claims against the actual physical gold in the world are vastly greater than the actual amount of physical gold. Germany and Austria know this. That is why they keep repatriating thier actual physical gold from NYC and London. Now Texas is coming to its senses.

Unless you have physical possession of your gold, you will feel like Dustin Hoffman getting a dental checkup with Szell when the shit hits the fan.

 

By Anna M. Tinsley

[email protected]

A gold rush in Texas?

AUSTIN

Texas — long known for cattle, cowboys and oil — could soon be on the map for something much different.

Gold.

State Rep. Giovanni Capriglione asked the Legislature to create a Texas Bullion Depository, where Texas could store its gold, which is now in New York, and where others could keep their precious metals.

The Southlake Republican must have the golden touch, because the House and the Senate have signed off on his plan and his bill appears headed to Gov. Greg Abbott for consideration.

“We are not talking Fort Knox,” Capriglione said. “But when I first announced this, I got so many emails and phone calls from people literally all over the world who said they want to store their gold … in a Texas depository.

“People have this image of Texas as big and powerful … so for a lot of people, this is exactly where they would want to go with their gold.”

And other precious metals.

House Bill 483 would let the Texas comptroller’s office establish the state’s first bullion depository at a location yet to be determined.

Capriglione’s changes to the bill must be approved by Monday, the last day of the 84th legislative session.

Continue reading “IS IT SAFE?”

WHY ARE THE GERMANS REPATRIATING THEIR GOLD FROM THE FED?

Guest Post by Koos Jansen from Bullion Star

German Gold Repatriation Accelerating

Headlines are easy to write, a bit of sensation in it and they will surely persuade people to read the accompanying article. Though I’m often disappointed to read articles that contain remarkably little of what the headline promises. On the other hand, I personally have written many articles that were read by few because my headline wasn’t catchy enough in a stream of apocalyptic headers readers a daily thronged upon. I call this the headline problem; no catchy headline, no readers. This might create an incentive for writers to exaggerate a headline just to get their message across. The next step is to sensationalize a headline and the content to go with it to attract even more readers – though this approach has little to do with journalism. Surprisingly, Bloomberg used this approach on June 23, 2014, when they published this article:

German Gold Stays in New York in Rebuff to Euro Doubters 

Germany has decided its gold is safe in American hands.

The headline and story suggest that the German gold repatriation schedule – to ship home 300 tonnes of gold from the US and 374 tonnes from France by 2020, in order to have half (1695.3 tonnes) of Germans official gold reserves stored in Frankfurt – will be halted as German politicians decided their gold “is safe in American hands”.  The headline and content that comes with it are misleading in every sense of how you look at it. The first Paragraph states:

Surging mistrust of the euro during Europe’s debt crisis fed a campaign to bring Germany’s entire $141 billion gold reserve home from New York and London. Now, after politics shifted in Chancellor Angela Merkel’s coalition, the government has concluded that stashing half its bullion abroad is prudent after all.

At the time the article was written 32.1 % of German sovereign gold reserves were stored in Frankfurt. So, if the government “has concluded that stashing half its bullion abroad is prudent after all“, it would still require 607.214 tonnes to be shipped to Germany in order to have 50 % on German soil. Though the article suggests there will be no more shipments of German gold from the US, which is incorrect as we will see later on.

At the end of the article it’s stated:

Campaigners at “Repatriate Our Gold” also doesn’t see the Bundesbank going further anytime soon.

“Right now, our campaign is on hold,” Peter Boehringer, a Munich-based euro critics who co-founded an initiative to bring home all of Germany’s gold in 2012, said in an interview.

Again, incorrect. After Bloomberg published the story Peter Boehringer promptly responded in the comment section beneath the article (click here to directly read his comment) to ?painstakingly explain all the inaccuracies that the Bloomberg story contains – no need for me to repaet him.

Alas, the Bloomberg story has reached many which are still under the assumption Germany has stopped repatriating its gold from the US and France. To get official confirmation on the continuation of Germany’s gold repatriation I asked the BuBa’s press department a few questions in August, their answers were very clear. The next screen shot should clarify all:

This is the link to the interview with Thiele from February 19, 2014. This is the link to the article of July 11, 2014.

Germany will repatriate 30 to 50 tonnes in 2014, or perhaps even more, from New York to Frankfurt. This was confirmed by the BuBa on July 11, 2014, after the publication of the Bloomberg article. The Buba will continue to repatriate 295 tonnes from the US and 342 tonnes from France in 2014 – 2020 to have 50 % of its reserves on German soil.

The German gold in New York is stored at the Federal Reserve Bank Of New York (FRBNY), that recently reported 24 tonnes of gold had left their vaults in July 2014.

The FRBNY stores gold, free of charge, for 36 sovereign nations and the IMF?. All these accounts are confidential so we don’t know who is withdrawing gold if total inventory is dropping. However, as we can read from the interview with Carl-Ludwig Thiele, Member of the Executive Board of the BuBa, 5 tonnes were repatriated from the FRBNY in 2013. Let’s have a look at data of the FRBNY foreign gold deposits of the last two years.

We can clearly see 5 tonnes had left the FRBNY vaults in 2013, it’s certain this was withdrawn by Germany. Subsequently, the repatriation schedule continued and, therefore, it’s very likely the withdrawals in 2014, in total 54.5 tonnes, have been also transferred to Germany. Although I’m not positive, it’s my assumption the German gold repatriation is accelerating.

Koos Jansen