I’d expect it’s a Cold War thing. When Germany (or West Germany, at the time) was concerned that it could be the frontline of WW3 at any moment, it probably wanted somewhere to keep its gold reserves that wouldn’t be captured. The current German gold reserve is the second largest of any in the world, so on the assumption that at least most of that was from West Germany then it’d be a huge thing to capture in the event of war. If it could magically all be sold at the current London gold fix price, it’d be worth well over 300 billion USD
That’s really interesting. So what you’re saying is, Germany sold more to the states than they bought, but the states were able to “keep” the money by marking off that Germany had so much gold.
And I guess now, Germany is concerned that the states may no longer honour that ledger.
Germany can’t be more concerned than before. I expect that the publicity is a chip in the current trade negotiations that must be happening after Trump announced the tariffs.
How would that work exactly? Trade surplus is just an accounting balance. It’s the difference between what US importers paid for German goods and what German importers paid for US goods. The money went to the companies involved, how would it be used to buy gold for the German state?
It’s mostly a result of Bretton-Woods. Countries with a trade deficit had to pay those with a surplus -mostly in gold. And because shipping gold is expensive, that gold stayed in the USA. The German central bank had 24 tons in 1950 but 4000 tons by 1951.
I’d expect it’s a Cold War thing. When Germany (or West Germany, at the time) was concerned that it could be the frontline of WW3 at any moment, it probably wanted somewhere to keep its gold reserves that wouldn’t be captured. The current German gold reserve is the second largest of any in the world, so on the assumption that at least most of that was from West Germany then it’d be a huge thing to capture in the event of war. If it could magically all be sold at the current London gold fix price, it’d be worth well over 300 billion USD
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That’s really interesting. So what you’re saying is, Germany sold more to the states than they bought, but the states were able to “keep” the money by marking off that Germany had so much gold.
And I guess now, Germany is concerned that the states may no longer honour that ledger.
Germany can’t be more concerned than before. I expect that the publicity is a chip in the current trade negotiations that must be happening after Trump announced the tariffs.
How would that work exactly? Trade surplus is just an accounting balance. It’s the difference between what US importers paid for German goods and what German importers paid for US goods. The money went to the companies involved, how would it be used to buy gold for the German state?
It’s mostly a result of Bretton-Woods. Countries with a trade deficit had to pay those with a surplus -mostly in gold. And because shipping gold is expensive, that gold stayed in the USA. The German central bank had 24 tons in 1950 but 4000 tons by 1951.
Interesting, didn’t know that about Bretton-Woods (or probably forgot), thanks for the info!
Yeah me neither, Wikipedia reminded me, there’s and entire entry to the acquisition of gold by the German government