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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Charlottesville: a town haunted by the far right

Locals fear a bitter far right will return.

On 12 August, a car ploughed down pedestrians in the street where I used to buy my pecan pies. I had recently returned to London from Charlottesville, Virginia – the scene of what appears to have been an act of white supremacist terrorism – having worked and taught at the university there for four years. While I unpacked boxes of books, the streets I knew so well were full of hate and fire.

The horror began on the evening of Friday 11 August, when thugs with torches marched across the “Lawn”. Running through the heart of the university, this is where, each Halloween, children don ghoulish costumes and trick-or-treat delighted and generous fourth-year undergraduates.

But there were true monsters there that night. They took their stand on the steps of the neoclassical Rotunda – the site of graduation – to face down a congregation about to spill out of St Paul’s Episcopal opposite.

Then, on Saturday morning, a teeming mass of different groups gathered in Emancipation Park (formerly Lee Park), where my toddler ran through splash pads in the summer.

We knew it was coming. Some of the groups were at previous events in Charlottesville’s “summer of hate”. Ever since a permit was granted for the “Unite the Right” march, we feared that this would be a tipping point. I am unsure whether I should have been there, or whether I was wise to stay away.

The truth is that this had nothing to do with Charlottesville – and everything to do with it. From one perspective, our small, sleepy university town near the Blue Ridge Mountains was the victim of a showdown between out-of-towners. The fighting was largely not between local neo-Nazis and African Americans, or their white neighbours, for that matter. It was between neo-Nazis from far afield – James Alex Fields, Jr, accused of being the driver of the lethal Dodge Challenger, was born in Kentucky and lives in Ohio – and outside groups such as “Antifa” (anti-fascist). It was a foreign culture that was foisted upon the city.

Charlottesville is to the American east coast what Berkeley is to the west: a bastion of liberalism and political correctness, supportive of the kind of social change that the alt-right despises. Just off camera in the national newsfeeds was a banner hung from the public  library at the entrance of Emancipation Park, reading: “Proud of diversity”.

I heard more snippets of information as events unfolded. The counter-protesters began the day by drawing on the strength of the black church. A 6am prayer meeting at our local church, First Baptist on Main (the only church in Charlottesville where all races worshipped together before the Civil War), set the tone for the non-violent opposition.

The preacher told the congregation: “We can’t hate these brothers. They have a twisted ideology and they are deeply mistaken in their claim to follow Christ, but they are still our brothers.” Then he introduced the hymns. “The resistance of black people to oppression has only been kept alive through music.”

The congregation exited on to Main Street, opposite my old butcher JM Stock Provisions, and walked down to the statue of Meriwether Lewis and William Clark – the early 19th-century Bear Grylls types who explored the west. They went past Feast! – the delicacy market where we used to spend our Saturday mornings – and on to the dreamy downtown mall where my wife and I strolled on summer evenings and ate southern-fried chicken at the Whiskey Jar.

The permit for the “protest” was noon to 5pm but violence erupted earlier. Between 10.30am and 12pm, the white supremacists, protected by a paramilitary guard, attacked their opponents. As the skirmishes intensified, police were forced to encircle the clashing groups and created, in effect, a bizarre zone of “acceptable” violence. Until the governor declared a state of emergency, grown men threw bottles of piss at each other.

At noon, the crowd was dispersed and the protesters spilled out into the side streets. This was when the riot climaxed with the horrific death of the 32-year-old Heather Heyer. Throughout Saturday afternoon and evening, the far-right groups marauded the suburbs while residents locked their doors and closed their blinds.

I sat in London late into the night as information and prayer requests trickled through. “There are roughly 1,000 Nazis/KKK/alt-right/southern nationalists still around – in a city of 50,000 residents. If you’re the praying type, keep it up.”

No one in Charlottesville is in any doubt as to how this atrocity became possible. Donald Trump has brought these sects to group consciousness. They have risen above their infighting to articulate a common ground, transcending the bickering that mercifully held them back in the past.

In the immediate aftermath, there is clarity as well as fury. My colleague Charles Mathewes, a theologian and historian, remarked: “I still cannot believe we have to fight Nazis – real, actual, swastika-flag-waving, be-uniformed, gun-toting Nazis, along with armed, explicit racists, white supremacists and KKK members. I mean, was the 20th century simply forgotten?”

There is also a sense of foreboding, because the overwhelming feeling with which the enemy left was not triumph but bitterness. Their permit had been to protest from noon to 5pm. They terrorised a town with their chants of “Blood and soil!” but their free speech was apparently not heard. Their safe space, they claim, was not protected.

The next day, the organiser of the march, Jason Kessler, held a press conference to air his grievances. The fear is that the indignant white supremacists will be back in greater force to press their rights.

If that happens, there is one certainty. At one point during the dawn service at First Baptist, a black woman took the stand. “Our people have been oppressed for 400 years,” she said. “What we have learned is that the only weapon which wins the war is love.”

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear