Did you ever wonder why :
-there are American soldiers still stationed in Germany
-the Germans still have most of their gold in the US
and other places?
[you can thank Max Keiser for that revelation]
The answer to the second is related to the first. While
gold was kept safe in the Cold War years, and thanks
to the soldiers, Germany was also kept safe.
Unfortunately, the gold standard ended in 1971, and
now gold deposits are kept and endlessly
re-hypothecated in order to spin derivatives in the
dark pools, far from stock markets, in order to
manipulate markets and especially the price of gold.
Great. So, the US either cannot unwind its derivatives,
or does not actually have the German's gold. If
Germany gets pushy, it does , however , have
soldiers on German soil.
read 'em: Lars schall
AMERICAN
BASES IN GERMANY AND
THE GOLD BASIS
Antal E. FeketeNew Austrian School of Economics
Germany is neither independent nor
sovereign, prevailing pretences notwithstanding. It has American troops on her
soil for reasons unexplained and unexplainable after all Soviet occupying
troops were withdrawn almost 25 years ago. Equally significant is the fact that
the lion’s share of the German gold reserve is in American custody. If the
Bundesbank asked for the repatriation of a token part of that gold over a long
period of time, we may take it for granted that it was done on American
instructions.
But why would the Americans ask the
Bundesbank to request the return of a part of German gold from the ‘safety’ of
the basement of the Federal Reserve Bank of New York in lower Manhattan? Surely
not because the vaults are bulging with American gold and they have to make
room for more.
It’s all grand theater. There is a hidden
agenda that has to be camouflaged. The best way of doing it is to put up a
show. The public is fascinated by images of shuffling central bank gold.
One reason, perhaps the chief reason for
this exercise is that the managers of the global fiat money system are
preparing for the coming showdown, the final curtain on what some years ago I
dubbed The Last Contango in Washington. In other words, policymakers are
preparing for (or trying to fend off) permanent backwardation in the world’s
gold futures markets that is threatening to rip apart the present shabby
make-belief payments system of the world.
Contango is the normal condition of the
gold futures markets when the spot price of gold is at a discount relative to
the price of futures contracts. It demonstrates that plenty of gold is
available to satisfy present demand. People are confident that promises to
deliver gold will be honored. The condition opposite to contango is called
backwardation that obtains when the futures price loses its premium relative to
the spot price and goes to a discount. In the gold market this condition is
highly anomalous because, on the face of it, it allows traders to earn risk
free profits. They sell spot gold at a premium, and buy it back at a discount
for future delivery. However, risk free profits are ephemeral since the very
action of traders will instantaneously eliminate them. What this suggests is
that permanent backwardation in gold could never happen by the very nature of
the case.
