"The impact of Germany's repatriation on the dollar revolves around an unanswered
question: why will it take seven years to complete the transfer?
The
popular explanation is that the Fed has already rehypothecated all of its gold
holdings in the name of other countries. That is, the same mound of bullion is
earmarked as collateral for a host of different lenders. Since the Fed depends
on a fractional-reserve banking system for its very existence, it would not come
as a surprise that it has become a fractional-reserve bank itself. If so, then
perhaps Germany politely asked for a seven-year timeline in order to allow the
Fed to save face, and to prevent other depositors from clamoring for their own
gold back - a 'run' on the Fed.
Now, the Fed can always print more
dollars and buy gold on the open market to make up for any shortfall, but such a
move could substantially increase the price of gold. The last thing the Fed
needs is another gold price spike reminding the world of the dollar's decline. -
in a recent article by Peter Schiff ..."
at http://financearmageddon.blogspot.com/2013/02/where-is-germanys-gold.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FCRkw+%28The+Economic+Collapse+Blog%29
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