Germans want to Check the 'fed reserve' Vaults about Their Foreign Gold Reserves.

Germans want to Check the 'fed reserve' Vaults about Their Foreign Gold Reserves.(Spiegel).A large portion of Germany's massive gold reserves are stored abroad, mainly in the Federal Reserve in New York. But are the bars really where they are supposed to be? A dispute has broken out over whether the central bank needs to check on its gold, or if Germany can trust its international partners.Germany has gold reserves of just under 3,400 tons, the second-largest reserves in the world after the United States. Much of that is in the safekeeping of central banks outside Germany, especially in the US Federal Reserve in New York. One would think that with such a valuable stash, worth around €133 billion ($170 billion), the German government would want to keep a close eye on its whereabouts. But now a bizarre dispute has broken out between different German institutions over how closely the reserves should be checked. Germany's federal audit office, the Bundesrechnungshof, which monitors the German government's financial management, is unhappy with how Germany's central bank, the Bundesbank, keeps tabs on its gold.
According to media reports, the auditors are dissatisfied with the fact that gold reserves in Frankfurt are more closely monitored than those held abroad. In Germany, spot checks are carried out to make sure that the gold bars are in the right place. But for the German gold that is stored on the Bundesbank's behalf by the US Federal Reserve in New York, the Bank of England in London and the Banque de France in France, the German central bank relies on the assurances of its foreign counterparts that the gold is where it should be.
The three foreign central banks give the Bundesbank annual statements confirming the size of the reserves, but the Germans do not usually carry out physical inspections of the bars. According to German media reports, the Bundesrechnungshof has now recommended in its confidential annual audit of the Bundesbank for 2011 that Germany's central bank check its foreign gold reserves with yearly spot checks. The Bundesbank has rejected the demand, arguing that central banks do not usually check each others' reserves. "The scope of the checks that the Bundesrechnungshof wants does not correspond to the usual practices among central banks," the Bundesbank said in a statement quoted by the Frankfurter Allgemeine Zeitung newspaper.
"There are no doubts about the integrity and the reputation of these foreign depositories."In times of uncertainty about the future of Europe's common currency, gold is a hot topic, and some Germans take a dim view of the fact that much of the country's gold -- which theoretically belongs to the people -- is held abroad. Some members of parliament have even expressed doubts as to whether the foreign gold reserves really exist. Philipp Missfelder, a member of the conservative Christian Democratic Union (CDU), wanted to see the gold for himself and traveled to New York in person to inspect the holdings, according to the newspaper Frankfurter Rundschau. His trip was apparently unsuccessful, though. When he visited the Fed's safes in New York, staff were either unable or unwilling to show him exactly which bars belonged to Germany.Some Germans even want to bring the gold reserves back to Germany. An initiative called "Gold Action" is campaigning under the slogan: "Repatriate Our Gold!"Read the full 'burried treasure' story here.