The news has spread that Germany wants the gold stored in the US returned to Germany.

This is politically sensitive, because this step makes it clear that Germany is reconsidering its role with the US.

The last time Germany wanted some of its gold back, it took four years for the gold to arrive.

This time, Germany wants the gold NOW.

After all, Germany needs the gold to be able to make additional expenditures without increasing its government deficits.

Germany really needs the value of the gold now, because high energy prices are unsustainable for German industry.

The question now is what the US will do.

Refusing to repatriate the gold makes it clear that the US has become completely unreliable. Punishing the repatriation with import duties sends the same message. A message that other European countries will then hear very loudly.

The US does not want us to lose our dependence on the US. So I expect at least delaying tactics, but with Trump at the helm, an outright refusal is also not unthinkable. It could trigger a financial crisis and spark a very serious trade war with the US.

What the US does will therefore be extremely important. A contributing factor is that the US may have used gold completely illegally as collateral for paper trades. This could put additional pressure on this narrative, possibly with an illegal drop in the gold price to keep settlement affordable for banks. Given the declining confidence in fiat money, I expect gold to become much more valuable afterward. Citizens' confidence in fiat money is extremely important. Gold plays a role in restoring confidence because it can serve as partial backing for the currency.


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Joseph Pereira wrote to All <=-

Refusing to repatriate the gold makes it clear that the US has become completely unreliable. Punishing the repatriation with import duties
sends the same message. A message that other European countries will
then hear very loudly.

I think it also sends the message that the US doesn't have the gold
reserves it says it does - which is a prime setup for a bank run on a
fiat bank.



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