The Bank of England, much like Swiss banks are now doing with private and institutional clients that hold gold bullion in Switzerland, charges the Bundesbank over half a million euros a year for storing the German gold that is held in England.

Bizarrely, however, the New York Fed stores the German gold for free, reports the NYT, on the basis that the presence of the German gold is "supporting the dollar's status as the global reserve currency."

I'm not quite sure what that is supposed to mean, and I doubt anybody really knows. Why would European gold be used to support the dollar? This revelation will certainly add to the concerns of those who believe the gold doesn't actually exist, or that it is somehow pledged or restricted in some way. Here, I believe, we have the key reason as to why the Bundesbank has to wait until 2020 for its gold, rather than simply withdrawing it from the vault and having it shipped across the Atlantic.

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