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.

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.