Berlin follows Caracas in goldbug repatriation

Why are they doing it? Because the conspiracists have won.

You may have heard that the Bundesbank is planning to repatriate its gold from the New York Federal Reserve to its own coffers in Germany.

The AP reports:

The Bundesbank plans to bring back to Germany some of its 1,500 tonnes of gold stored in the vaults of the Federal Reserve in New York, and the 450 tonnes stashed with the Bank of France in Paris, reported the German newspaper Handelsblatt.

The central bank declined to comment on the report but will on Wednesday outline a plan to manage the reserves, which total about 3,400 tonnes, or 270,000 gold bars.Most of Germany's massive reserves have been stored abroad since the cold war amid fears of a Soviet invasion.

It's a similar story to one from 2011, when Venezuela announced it would be repatriating up to 211 tonnes of its gold from various vaults around the world. Here's how the FT reported it at the time:

Venezuela would need to transport the gold in several trips, traders said, since the high value of gold means it would be impossible to insure a single aircraft carrying 211 tonnes. It could take about 40 shipments to move the gold back to Caracas, traders estimated.

“It’s going to be quite a task. Logistically, I’m not sure if the central bank realises the magnitude of the task ahead of them,” said one senior gold banker.

It feels — although I can't put my finger on why (no snark intended, for once) — that the tone of the reporting around the Bundesbank's decision has been far more respectful than it was eighteen months ago. Then, it seems to have been taken as a given that the move was a mad power grab on Chavez's part, and all the economics blogs focused on the difficulty of actually carrying out the pledge.

Take Felix Salmon:

It seems to me that Chávez has four main choices here. He can go the FT’s route, and just fly the gold to Caracas while insuring each shipment for its market value. He can go the Spanish route, and try to transport the gold himself, perhaps making use of the Venezuelan navy. He could attempt the mother of all repo transactions. Or he could get clever.

This time, however, the analysis is focusing less on how the transportation will work, and more on patiently analysing the Bundesbank's decisions. Ezra Klein, for instance, writes:

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 doubtless partly because transporting up to 1,500 tonnes of gold between New York and Berlin is — probably rightly — seen as less risky than transporting 211 tonnes of gold from London to Venezuela. But it's also because Germany is a Very Serious Country full of Very Serious People and Venezuela is the home of Wacky Hugo.

Germany is repatriating hundreds of tonnes of gold because economic conspiracy theorists have gained a relatively substantial amount of political capital in the country. Venezuela did the same thing in 2011. They are both very silly places.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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The Chancellor’s furniture gaffe is just the latest terrible Tory political analogy

Philip Hammond assumes everyone has at least a second home.

“Right. Got to sort out Brexit. Go on the radio to avoid questions about it and all that. But first of all, let me work out where I’m going to put the ottoman and the baby grand. Actually, maybe I’ll keep them in one of my other properties and leave a gap in my brand new one for a bit, just to get a feel for the place. See where everything will fit in after I’ve grown familiar with the space. Bit of pre-feng shui,” mused the Chancellor. “What?”

These were Philip Hammond’s precise words on BBC Radio 4’s Today programme this morning. OK, I’ve paraphrased. It was a pouffe, not an ottoman. But anyway, he seemed to believe that the metaphor for Brexit we would most relate to is the idea of buying a second, or another, home.

“When you buy a house, you don’t necessarily move all your furniture in on the first day that you buy it,” he reasoned with the presenter.

Which, of course, you do. If you’re a normal person. Because you’ve moved out of your former place. Where else is your furniture going to go?

Rightly, the Chancellor has been mocked for his inadvertent admission that he either has an obscene amount of furniture, or real estate.


But Hammond is not alone. Terrible political analogies – particularly household metaphors – are a proud Tory tradition that go back a long way in the party’s history.

Here are some of the best (worst) ones:

David Cameron’s Shredded Wheat

When Prime Minister, David Cameron tried to explain why he wouldn’t stand for a third term with a cereal metaphor. “Terms are like Shredded Wheat. Two are wonderful, but three might just be too many.”

It’s a reference to an old advertising slogan for the breakfast staple, when it came in big blocks rather than today’s bite-sized chunks. It turned into a bit of a class thing, when it emerged that Shredded Wheat had been served in Eton’s breakfast hall when Cameron was a schoolboy.

Boris Johnson’s loose rugby ball

When asked if he wants to be Prime Minister, Boris Johnson said “no” the only way he knows how – by saying “yes” via a rugby metaphor:

“If the ball came loose from the back of the scrum, which it won’t of course, it would be a great, great thing to have a crack at.”

George Osborne’s credit card

In a number of terrible household analogies to justify brutal cuts to public services, the then chancellor compared the budget deficit to a credit card: “The longer you leave it, the worse it gets.” Which, uh, doesn’t really work when the British government can print its own money, increase its own revenue anytime by raising taxes, and rack up debt with positive effects on growth and investment. A bit different from ordinary voters with ordinary credit cards. But then maybe Osborne doesn’t have an ordinary credit card…

Michael Gove’s Nazis

In the run-up to the EU referendum, the Brexiteer and then Justice Secretary Michael Gove compared economic experts to Nazis:

“Albert Einstein during the 1930s was denounced by the German authorities for being wrong and his theories were denounced, and one of the reasons of course he was denounced was because he was Jewish.

“They got 100 German scientists in the pay of the government to say that he was wrong and Einstein said: ‘Look, if I was wrong, one would have been enough’.”

Gove had to apologise for this wholly inappropriate comparison in the end.

Iain Duncan Smith’s slave trade

Another terrible historical evocation – the former Work & Pensions Secretary Iain Duncan Smith compared the Tories’ “historic mission” to reform welfare and help claimants “break free” to the work of anti-slavery campaigner William Wilberforce:

“As Conservatives, that is part of our party’s historic mission. Just look at Wilberforce and Shaftesbury: to put hope back where it has gone, to give people from chaotic lives security through hard work, helping families improve the quality of their own lives.”

Boris Johnson’s Titanic

A rather oxymoronic use of the adjective “titanic” from Johnson, when he was discussing the UK leaving the EU: “Brexit means Brexit and we are going to make a titanic success of it.”

I prefer the more literal reading of this from Osborne, who was present when Johnson made the remark: “It sank.”

Anoosh Chakelian is senior writer at the New Statesman.

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