Last week we mentioned that Germany’s audit office wanted the Bundesbank to make sure German gold held in foreign vaults is…you know…actually there…and has not been leased into oblivion, never to back sound money again. Well the story gets better.
Back then it took only 84 US cents to buy a euro. Those were the good old days when travelling to Europe didn’t cause you heartburn because of the cost. Today it costs 129 US cents to buy a euro. That’s actually worth thinking about, given how poorly the last few years have gone for the common currency. Of course Ben Bernanke has something to do with keeping the dollar weak, too.
But in any event, Chancellor of the Exchequer Gordon Brown was selling Britain’s gold around the same time the German’s were taking theirs home. Other than making completely opposite decisions, the biggest difference between the two is that Brown told everyone he was selling before he sold and the Germans told no one.
Did the Germans believe the euro would need physical gold backing to prove its mettle in a crisis? Or were they just being prudent in their mistrust of the Anglo-Saxon crooks and thieves in the City? And where is the rest of the gold overseas? Is it still there? Or has it been leased into oblivion?
These are intriguing questions. But in a normal financial world, they’d be trivial curiosities. Civilised people would be engaged in the hard work of valuing and buying and selling productive enterprises. Keeping track of gold – the corpse of value as it’s called by Japanese engineer Goto Dengo in Neal Stephenson’s book Cryptonomicon – is the sort of thing you do when all other wealth has been/is being destroyed.