But while the notion of billions of dollars in gold bars being transported across the Atlantic and the Franco-German countryside triggered a thousand heist jokes on Twitter, the decision reflects a real, and somewhat disturbing, current in German politics.
The backstory: Germany built up its gold reserves as the flip side of running trade surpluses in the decades after World War II. In practice, much of the world’s gold is stored in vaults underneath central banks: eighty feet below street level and hard against the bedrock of lower Manhattan at the New York Fed, in the ancient vaults of the Bank of England on Threadneedle Street in the City of London, and so on. This is highly convenient; when one government or central bank sells its gold to another, the precious metal can be rolled from one cage to the next, with none of the risk that comes with transporting it across oceans. (For more about the New York Fed's gold storage operation, click here).
The system, of course, is built upon trust -- that the New York Fed won’t suddenly be taken over by people with no respect for those nations’ property rights and seize it for their own use, and that the central banks won’t lie about how much gold is in their vaults. Among the world’s central bankers, that trust runs deep, and most governments are content to keep their gold wherever it is most convenient. The exceptions are governments that have reason to fear that their gold stocks could be frozen as part of a conflict, such as in Iran and Libya.
So what the heck is Germany doing? It is a nation with a deep-seated fears about the stability of its currency, no doubt in part the legacy of the Weimar hyperinflation of the early 1920s. The fixation on its gold comes at a time when the world of finance seems in chaos. Germans are being asked to help rescue Greece and other European nations with troubled finances. The European Central Bank has bought bonds from some of those nations, which Germans widely view as tempting enormous inflation. Against that backdrop, it is perhaps not shocking that there is political resonance to the theory that the New York Fed and Banque de France may be putting one over on the Bundesbank and that some of Germany's gold might actually be missing.
(This is, it should be noted, not solely a German fixation. There are plenty of Americans who are convinced that the U.S. gold reserves in Fort Knox are missing.)
So, essentially, the Bundesbank is offering a sop to the conspiracy theorists by relocating the gold to German soil. The nation just has to hope that nothing goes wrong during the journey.
“In Germany, a lot of emotion is attached to the topic of gold reserves,” Bundesbank board member Carl-Ludwig Thiele said in a press conference announcing the move. The same could be said of Americans.