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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MPs should follow Emmanuel Macron's example and stand up to the far right

Where does a liberal centrist's victory fit into your narrative of inevitable decline? 

“Après le #Brexit, le printemps des peuples est inévitable !” wrote the far-right Front National leader Marine Le Pen, days after Brexit. Well, the blossom is on the trees, and Le Pen is through to the second round of the French presidential elections, so presumably we’re bang in the middle of that inevitable “people’s spring”. 

After all, a referendum that left Britain’s metropolitan elite weeping into their EU flags was swiftly followed by the complete overturning of US political and ethical traditions. Donald Trump defied polling and won the Presidency, all the while proclaiming he was “Mr Brexit”.  

Then, in December, the Italian Prime Minister Matteo Renzi held a referendum on constitutional changes and lost. Both Europhiles and Eurosceptics read the runes. Ukip’s on and off leader Nigel Farage crowed of 2016: “First we had the Brexit deliverance, then the Trump triumph, then the Italian rebellion. Democracy and the rebirth of the nation state!”

As this illustrates, the far-right want you to believe all these results are linked, and that they represent a popular, democratic movement. In the UK at least, the liberal left has drunk the English champagne. Labour is agonising over how to reconnect with “traditional” voters Ukip is apparently so in touch with – which don’t seem to include ethnic minorities, young people and those living in cities. Being “tough on immigration” is the answer to modern woes, and globalisation is a dirty word that can only represent multinational interests and not, say, cheaper food on the table. 

There are debates to be had about globalisation, of course, and the lingering impact of the 2008 financial crash, and the fact wages haven’t risen, and public services have been cut, and that in some northern towns, people from different ethnic backgrounds live segregated lives. But if the first round of the French presidential election can do us one favour, it’s to dispense with the narrative that there is something inevitable about the end of liberalism. 

Emmanuel Macron, an unapologetically pro-EU social, economic and political liberal, led the way in the first round of the French presidential election. The polls put him on course to become President.

If he wins, perhaps it’s time to revisit the narrative of decline. To remind ourselves that Hillary Clinton, now written off, won the popular vote in the United States, and among growing demographics of voters too. That a far-right  Austrian presidential candidate was defeated in 2016. That as recently as March, the Dutch mainstream prevailed against the far-right original Trump, Geert Wilders, and that the left-green leader Jesse Klaver enjoyed a surge instead. And that, although it’s now commonplace to assume Canada is just “nicer” in electing a liberal, Justin Trudeau, his party actually overturned nearly a decade of tar sands Conservative rule. 

Should liberals start to join these dots, voters should have the right to ask why both Labour and the Conservatives have jumped on the populists' bandwagon so eagerly. Why, among previously economically liberal Conservatives, are Nicky Morgan, Ken Clarke and Anna Soubry left as lone voices on the back benches. And why, in Labour, is patchy research linking depressed wages and immigration now exhalted as long-established fact? 

Liberalism may be out of fashion, but it’s not dead yet, as any of the Tory MPs in south-west marginal seats know too well. By the time Farage’s “independence day” on 24 June arrives, the narrative may have changed again. 

 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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