Germans Getting Paranoid About Gold Reserves

Moneybox
A blog about business and economics.
May 15 2012 3:58 PM

Germans Getting Paranoid About Gold Reserves

1337111899042
Robbing the New York Federal Reserve

Die Hard With A Vengeance screengrab

For no good reason other than aversion to change, most central banks of rich countries still have substantial gold reserves from back in the day. One of many things that makes gold impractical as a monetary instrument is that it's heavy, and switching large quantities of gold from one vault to another is an annoying hassle. Consequently, the way things used to work is that central bank gold reserves would really just sit in a handful of vaults in New York, London, Paris, etc., and rather than moving the gold from place to place you'd just sort of tag it "Spain's gold," "Sweden's gold," and so forth.

None of which would be very interesting except for the fact that Spiegel is reporting that as part of the German elites' retrogression into the economic dark ages they're getting paranoid that somebody's stealing their gold and some people want the Bundesbank to start undertaking physical inspections of the alleged stockpiles at the New York Fed and elsewhere. The irony here of course is that only former East German special forces colonel Simon Gruber even has the wits to pull off the kind of theft we're talking about.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

  Slate Plus
Slate Picks
Dec. 19 2014 4:15 PM What Happened at Slate This Week? Staff writer Lily Hay Newman shares what stories intrigued her at the magazine this week.