If your friend goes to an ATM for $20 and their bank fines them with a large percentage fee on their income; are you likely to also choose this bank?

The US might literally just not give it to them. Germany has been trying to ask for their gold back for a while IIRC and they generally get an explanation that paraphrases to it being a very complex operation to pull off and they should come back next year.

The US has enough leverage over Germany that the Nord Stream incident is still an unsolved mystery where everyone just moved on. Probably the Russians did it. That's a lot of leverage.

Doesn't this basically justify why they have qualms? To not seek to repatriate in this circumstance would seem politically unwise, if you value the gold.

If of course it's just a bargaining tool, you would think there is a quit pro quo.

Whilst the impact of a refusal to repatriate would be high remember the gold is probably not performing very much of a role, beyond a defensive one, and is nothing like the whole of their stocks. And the cost to US standing in enacting a refusal to NATO allies would be significant: You would expect future gold deposits to seek safer harbours for one, and the retention of the dollar as a hedge currency would be called into even more question.

In any case, it's a matter for law. On what grounds could the US refuse?

They introduced new tax on remittance already. Germany would never dare to anger USA anyway

Or a deep sea diving movie

The cheap approach is to check the density - weigh it and measure the volume. But I don't see what the issue would be with melting the gold down to check. There isn't that much of it.

Measure its volume by dunking it in a jug of water and compare its weight with its expected weight (depending on the density of gold).

There is a famous tale of Archimedes doing exactly this when posed with the problem of determining if a certain crown is made of pure gold.

This was famously answered by Archimedes in his Eureka moment: https://www.longlongtimeago.com/once-upon-a-time/great-disco...

Density, conductivity, x-ray. Density alone won't rule out bars that are spiked with tungsten.

My first guess would be that your gold bar isn't 100% gold, because alloying with a little copper or silver will give you more durable and practical ingot. Ifyou look at a typical gold bar they'll usually have embossed their purity. Even "pure”, 24-carat gold is probably "fineness" 998 or 999, which translates to 99.8% or 99.9% by mass.

Here's a very informative video on this from a 30+ yr COMEX gold trader (the mechanism and cost to do it is discussed from about ~8 mins in): https://themarkethouse.substack.com/p/video-alyosha-with-a-r...

I have an auxilary question. Why don't countries have Gold Embassies around the world? Accounts which can be settled in Bulk (e.g. say $100 million gold equivalent size). This way no one country has monopoly on reserve asset.

Maybe unrelated to your question, but the individual bars in the Fed vault have specific owners. They are not mingled.

I love that this question, asked 20 minutes ago on HN, probably been asked on a monthly if not weekly basis by so many people since the invention of gold as currency.

On the individual scale, something like a Sigma Metalytics resistivity analyser (passes an electric field through the sample, checks to see if resistivity, conductivity, weight or size all match up to what you'd expect from a homogeneous gold sample of that size or weight). On the commercial scale, an XRF spectrometer. Both methods are completely non-destructive, and highly accurate (the XRF more so).

(the two scales are due to price and bulk: the Sigma is about the size of a hardback book and a few hundred pounds, an XRF is the size of a large 3d-printer and many thousands).

Been to a pawn shop in Hong Kong that deals with gold. They still buy small gold nuggets and simply check by juggling. So probably weight, volume and malleability, and that probably fake golds aren’t a big deal for them.

Nobody is holding 100% gold. The highest purity is 99.999% and anyone holding that either has an outstanding reputation and XFR scans to back that number or is trying to sell you a lead brick.

Good idea, no counter-party exposure like if you used USD, and seems to have worked as an inflation/crisis hedge judging by how well Italy did in the euro-crisis ~2008.

A huge pile of gold in a secure location allows a government to operate in exile essentially forever without creating substantial debts for the home nation. It's not just "Italy's gold", it's "Contemporary Italy's gold".

Norway & the Netherlands moved their gold right before the Nazi invasions in the 40's, and were able to continue operating in exile as a result. Taiwan was established on the back of this tactic too, with the Chinese nationalists moving their gold out of the mainland into Taiwan when they realised they'd lose to the Communists.

Enron was 25 years too early.

The rest of the world are blood boys for You-Know-Who.

*can’t be taken advantage of anymore easily

It's probably too late now. Tbag's financial philosophy has been that everything in his pocket is his. This has historically included all unpaid contracts, all campaign contributions and large segments of the US budget. I don't think it's a stretch to suggest that if he lives long enough it will also include the Putinesque concept that everything deposited in his country's banks is also his to take when needed. I'm willing to bet he's already looking that far ahead and won't allow European wealth to be repatriated under any circumstances.

What do you mean by anymore? The US can't be trusted with gold since 1971.

https://en.wikipedia.org/wiki/Nixon_shock

Who even needs a ton of Bitcoin?

Germany and Italy, it says so in the title of the article.

I'll take it off their hands if they don't need it.

> US should have never been trusted

Depends on when gold was shipped to the US. For the better part of the 20th century there was absolutely no reason for most of it's friends and allies to not trust the US. Especially if you deposited your gold with the US around the world wars or any time before the mid 60s really.

>IMO the US should have never been trusted

I propose, they had never been trusted. Nations do not believe in trust. At the International Relations level, IR Realism is basically the only generally accepted policy. You may have a few Constructivists, but the smartest ones still put trust and norms below power calculations.

Its really that the average person has essentially no understanding of IR and history.

I assure you that verification methods have been happening. The amount of trust was less than the amount of verification.

The point of holding gold is that it is a physical asset that is always valuable. It’s also an very risk-averse asset.

The idea of all countries having it in one location: If you have to transfer money to a different country for whatever reason you just have to put the gold from one part of the vault to the other. Money securely, physically and quickly transferred.

Also you have the physical money and don't rely on computers or similar. More secure (if you ignore Die Hard 3).

If countries start moving the gold away it's a) sign that they need the money elsewhere or b) they don't trust the current location anymore.

When you have all the money, what do you worry about? Gold is a hedge.

This is called war chest. Because the war is coming.

II World War hasn't started with German attacking Poland 1.IX.1939 and Russia (Soviet Union) on 17.IX.1939. There was Spanish Civil War earlier (1936), annexation of the Sudetenland - part of Czechoslovakia in 1938.

Law of the jungle

This is not as much as it looks like at first glance. "Revenue" for the german state is something around $2000B, while their ~3000 tons of gold are worth ~300B.

It is plausible to me that building up a gold reserve might be worth it, longterm, purely because the gained trust/perceived stability nets you slightly better conditions when financing megaprojects alone (like the Fehmarn tunnel): Over a few centuries you might save tax dollars thanks to investing into bigger gold reserves earlier.

And gold is objectively useful if things go to shit-- just look at Russia for a recent example-- gold is nice for mitigating sanctions and stabilizing your currency under bad conditions.

So repatriating your own property is now pro-Russian propaganda? Unless country is defenseless what is wrong with keeping one's things at one's place

It's still a very good idea given the US instability and complete lack of trust in this administration

Is far-left really pro-Russia or just anti-US? Not everyone that is anti-US (which a lot of people with common sense would be tbf) is pro-Russia

I thought Wagenknecht had somewhat distanced herself from pro-kremlin positions she and parts of Die Linke previously held? She's still pretty staunchly anti-NATO, though. I think her German-nationalist positions kind of overlap with positions that benefit Russia like resuming gas supplies to drop energy prices and heating costs.

This is a very skewed view of the political landscape. Would be nice to forget this pro/anti Russia narrative. Please also note that AfD has become the strongest party in Germany. Sure, firewalled, but question is, for how long.

That's all fine and dandy, but also IMO it's entirely possible that the US cannot deliver their gold if these countries (and/or others) wanted it back.

Just look at what happened when Venezuela wanted their gold back. It took ages and that was a relatively tiny amount.

It's extremely naive for many EU countries to still believe that they "have" "their" gold stored in the US. And even more naive to not try and get it back.

The entire US banking and financial system relies on NOT delivering or owning the underlying (fractional reserve banking, federal reserve printing money out of thin air, failures to deliver every single day on everything from stocks to government bonds, failing CDS'es and so on).

This is a very superficial perspective. Disclaimer: I disdain both BSW and Afd.

You're basically falling into "the populist trap" in which they take a fact or something true and wrap it with a lot of BS and conspiracy theories. If you disregard the true core "just because it's from the wrong party" you give them political lever. We've seen that playbook working out for 10+ years.

De Masi did a great job as a financial expert in a parliamentary group, highly regarded by people over the whole political spectrum. I don't understand why he joined BSW but that doesn't weaken his point here.

And since we're already publicly discussing Trump blackmailing us with decommissioning US IT-Services without further notice, it is exactly right to talk about assets like gold being stored on US soil.

You're correct this does not matter this year. But in the 2013 German election, AFD got no seats, and now it has the second most seats. BSW was not around in the 2021 election, they got about 5% of the vote but Die Linke managed not to lose their vote to BSW. BSW probably picked up voters who would have gone to either AFD or Die Linke (kind of like voters in the early 1930s who switched between the KPD and NSDAP).

This is the future of European, and US elections. Undermining Russia is important to the rulers of Europe and the US, but not as much to workers and voters. You can see the sea change with Trump in office and socialist candidates like Bernie, who is getting huge crowds in Idaho and Oklahoma, or AOC and Zohran in New York. Young people can't afford houses, even programmers are having trouble since the 2022 layoffs - can you imagine the Amazin RTO in Seattle mandate would be possible in 2021? Wealth inequality leads to disruption, and political parties are made to appeal to the masses - either fascist or socialist. The political tendencies arising are no anomaly.

As it is correct, that they are virtually not in power, framing them as pro-russia is some sort of false flag. Just because they are not anti-russia, like every other party, does not automatically mean that they are pro-russia. AfD and BSW together got more then 25% of all votes. So, you are correct, they virtually are not in power, but they have some real power just by being there. This HN post here is the best example for this mechanism.

> […] * BSW (populist far-left, pro-Russia, anti-US) or AfD (populist far-right, pro-Russia).*

An example of:

* https://en.wikipedia.org/wiki/Horseshoe_theory

?

> The Germans in this article all appear to be aligned to either BSW (populist far-left, pro-Russia, anti-US)

Picturing BSW as far-left, while not uncommon, strikes me always as very strange. While it's a bit unclear where to put them with their wild mixture of populism, the only reason they are by some seen as leftwing is because of the history of their founder. She was previously a member of the left party, but for many years, even while she still was a member of that party, has not held any views that could count as far-left.

The only reason some still put her in the far-left camp is that she was, looooong ago, a member of the communist platform in the PDS, the predecessor of the left party in Germany.

Good for them for being pro-Russia, we need more of those parties in this colony called the European Union.

Probably because, with full knowledge and awareness of the history you describe - they still feel their gold is safer in NY than in their own country. Europe and it's governments have history too.

This is a little skewed based on my understanding. What actually happened to precipitate this was some European countries intentionally attempting to destabilize the dollar, gold having been pegged to a specific dollar amount. Obviously (to me, at least) such an action, threatening a country’s solvency, can’t just be allowed to go on, especially from the position of strength the US had in 1944 (literally a physical presence in 100% of the developed world’s ports at the time).

And let’s not forget that part of the deal was that the US would guarantee maritime security, which they have fulfilled for nearly 100 years. I would say that’s worth quite a bit more than whatever gold is in dispute, given that it allowed for the rise of globalization in the first place.

What really caused the end of the BW financial system was the inability of a world economy to be backed by gold in the first place. This coincided with the US leaving the gold standard in 1971, and this was only ~5-10 years after the instability began. So the system still enjoyed 15-20 years of operating as intended.

> I wonder what it says about Europe that its leaders are still falling for these rugpulls. That they are uneducated is the most generous reading I can think of.

Stupid Atlanticists

If anyone's interested in some of the nitty gritty of this, can highly recommend "Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy" (https://www.amazon.com/Three-Days-Camp-David-Transformed/dp/...)

Note that Germany already finished bringing back 300 tons of gold from NYC and about the same amount from Paris in 2016, so this is a bit out of date (that whole transfer was completed ahead of schedule, which indicates, in hindsight, that probably not all the German gold in NYC was missing completely in 2011 :P).

Damn. I despise crypto, but even I have to admit that there's some power behind this comment. Not because crypto isn't shit, which it is, but because letting someone else hold your gold is stupid. As stupid as letting someone else have your crypto keys. Bravo.

In a regional crisis it will

> And in a crisis likely won't be useful for buying things that do.

In a crisis, the value of gold holds more than that of the Papiermark, or even the US dollar - I can buy only one egg for the two I could have bought five years ago. Gold is uniform, portable, divisible and durable - useful attributes in a crisis, and worth more than Confederate dollars.

Gold is useful - for filling teeth, for electronic coating. It's value has stayed normal for thousands of years - although in times of inflation or crisis it might become a little overvalued temporarily as people flee to its safety. One could switch to other precious metals like silver, but this happens to them too.

Everytime it comes up this fruitless educational effort appears, indicating a persistent irrational value, decoupled from reality . Which makes gold valuable even in conflict zones where irrationality abounds..

As someone deep into International Relations, I always find it a bit interesting to hear when someone says 'X nation is untrustworthy'. I mostly find it interesting because it means some event disrupted norms to a level that The Commons is aware. Everyone in IR knows trust/morals is not something to put weight into, but 'normies' are always surprised whenever there is a chance in IR that contradicts international law or norms.

It will surprise most Americans to realize the world is not governed by Liberalism/Institutions, despite the veil presented. However, at the highest level the world is managed by the principles of IR Realism.

'Trust' is subordinate to national interests, the purpose of trust is small, only enough to make deals. However, even then, deals are always backed by verification methods and checked consistently.

None of this is unique to the US, The West, or this century.

Store it somewhere safe and stable, that way if you're invaded the government in exile can still access the country's wealth to fund resistance and what-not, or at least keep the invaders from just taking it.

Source: all that stolen wealth in WW2.

Trade becomes easier. Metaphorically pushing the bar across the room.

Countries also keep cash funds at the NY Federal reserve too