Can the United States be trusted with Germany’s gold reserves?
Its leader is attempting to cripple the country’s most vital industry. His deputy refers to it as a pathetic freeloader. The individual with influence is making gestures reminiscent of Nazi salutes and is openly interfering in its elections to support a far-right party that its own intelligence service views as a threat to the constitution.
Given these circumstances, it is no surprise that some politicians in Germany are concerned that what was once considered one of the world’s most reliable storehouses may not be as secure as previously thought.
Germany possesses the second-largest gold reserves globally, with 37 percent — approximately 1,236 metric tons valued at €113 billion — stored in the vaults of the New York Federal Reserve. These precious metal holdings ensure that, in times of need, the Bundesbank can convert them into U.S. dollars or other hard currencies.
The notion that these reserves might be unsafe would have seemed absurd since 1945… until recently. The certainties surrounding Germany’s postwar stability have been challenged, especially with the recent removal of a controversial cap on public borrowing, making the unthinkable suddenly conceivable. This concern is amplified by evidence of Trump’s readiness to extend his powers and assert presidential authority over the judicial system.
German tabloid Bild, which is owned by POLITICO parent company Axel Springer, reported last Thursday that outgoing Christian Democratic Union (CDU) lawmaker Marco Wanderwitz is among those expressing concern.
As far back as 2012, Wanderwitz had unsuccessfully sought to inspect the gold holdings to pressure the bank to either take a more active custodianship role or to repatriate the gold to Germany.
“Of course, the question now arises again,” Wanderwitz commented, as reported by Bild.
European Union lawmaker Markus Ferber, also from the CDU, has similarly called for greater scrutiny over German gold stored in the U.S.
“Officials from the Bundesbank must personally verify the bars and document their findings,” Bild quoted him as stating.
Historically, the idea that gold stored in official vaults may be unsafe has been dismissed as the domain of cranks and conspiracy theorists. However, it has gained traction, ironically, due to the billionaire and Trump administration insider, Elon Musk, who has called for an audit of the U.S. gold reserves.
You Do Not Talk About Bullion Club
For the Deutsche Bundesbank, responsible for managing Germany’s most valuable financial asset, the first rule of Bullion Club is you do not discuss Bullion Club, and certainly do not undermine fellow members.
“We have a trustworthy and reliable partner in the Fed in New York for the storage of our gold holdings,” stated Bundesbank President Joachim Nagel during a press conference in February, a statement the bank reiterated to POLITICO. “It doesn’t keep me awake at night. I have complete confidence in our colleagues at the American central bank.”
However, it’s been less than a decade since the Bundesbank was prompted into action, spurred by public fears that Germany’s accumulated wealth might be depleted to bail out other eurozone countries.
In 2013, a vocal campaign led by right-wing populists — which resonated widely enough to cause embarrassment for then-Chancellor Angela Merkel — compelled the Bundesbank to repatriate all the gold it had previously stored in the Bank of France’s vaults. At that time, the Bundesbank argued that it no longer needed access to foreign currency in Paris since Germany and France shared the euro.
Currently, over half of the Bundesbank’s reserves are kept at its premises in Frankfurt, with the remaining 13 percent held at the Bank of England, outside of the U.S.
