They've been asking this question since before 2013. The writing has been on the wall since the US started demonstrating that it thinks debt monetisation is an acceptable strategy.
Have outlets like Deutsche Welle been speaking like this since 2013? I don't really think so. Not to defend the past administrations, but that the question is starting to hit mainstream media does in fact tell a huge lot about this current one.
This has been a topic of continuous debate since at least ~2000 in Germany. The German Wikipedia has a whole section covering it¹. Obviously, the debate gets more intense every time the relationship between Germany and USA gets strained.
Sovereignty is a matter of constant maintenance, but only recently has the discourse been affected by lack of trust in the admin itself, not only for transparency or logistics.
> think there is substantial difference between the two sub-parties
You said something close enough.
Yes, they're both terrible. Biden's admin allowed a genocide to take place in Gaza while pretending to give a damn about it and repeating propagandist lies from Israel. But the Trump admin is openly looting everything they can get their hands on.
The real answer is something HN doesn't like so I won't advocate it openly, but it involves society paying to take care of people to provide homes, provide medical access, things like this. Neither party is interested in that.
But only one is brazen about harming peopler and making content from it or unashamedly posting AI-generated memes.
> The real answer is something HN doesn't like so I won't advocate it openly, but it involves society paying to take care of people to provide homes, provide medical access, things like this. Neither party is interested in that.
There are enough people on HN who think working social democracy is a great option; not everybody here is a libertarian cryptobro, an eastern european with decades-long PTSD or a hardcore conservative.
I’m learning the opposite lesson. The US is surprisingly fragile and a single president with no morals or ethics can do far more damage than anyone could have imagined.
It's a lot more than "a single president". It's the two thirds of American voters who either voted for him or couldn't be bothered to vote against him, even after having seen how he behaved in his first term.
That's why he's not the biggest problem. He's more of a symptom than a cause. He won't be around for ever, but even after he's gone, most of those same people will still be around.
no i believe we were taught correctly that the powers of the presidency are limited. the issue is that he is the leader of a group that is embedded into every branch of government at multiple levels. it is not hte case of a random crazy president abusing presidential power and everyone is just at the mercy of a lunatic. It is the case that every wild thing he does is upheld and supported by a large network of people who otherwise would have the power to absorb and dismiss his attempted actions.
Nah, it's more like the United States is vulnerable to 50 years of reactionaries, upset about things like civil rights for African Americans and women in particular, actively working to dismantle democratic processes.
That's why farmers vote for politicians and policy that put them out of business. In my hometown, the county went from 150 dairy farms in 1990 to 3. They voted to keep their guns or whatever bullshit they were told to worry about, and were wiped off the map by the deregulation they "wanted". My little town is a rural ghetto, the richest people in town now are the school principal and state trooper.
POTUS is an acute condition. The sickness lay deeper.
Debt monetization is not happening. There's been significant expansion of the money supply, which got the US through COVID at a one-off cost of about 10% inflation in one year, which I think was a reasonable cost of covering the crisis (especially compared to the GDP response in less generous countries!)
What's happening is a much simpler, more drastic concern: does the US respect its international commitments?
I think it's also worth noting that a lot of people have 'forgotten' other factors happening besides stimulus and monetary (central bank) policy—especially when it comes to energy and food prices:
The US stopped respecting its international commitments in Trump's first term when it single-handedly withdrew from the JCPOA (singed by way more countries than just the US) without a single valid reason to do so.
Since then, it flip-flopped on the Paris Agreement, single-handedly put tariffs on goods imported from literally every single country in the world, withdrew from WHO and so on and so on.
Not only does the US not respect the commitments it already agreed to, it hasn't done so for the past 10 or years.
> Not only does the US not respect the commitments it already agreed to, it hasn't done so for the past 10 or years.
These commitments were commitments by the administration in the White House at that time. They were not accords or treaties ratified by Congress. Agree with them or don't, they should have been understood as what they were: limited in legitimacy and free to be canceled by the next administration with no discussion.
This isn't a matter of arcane political skullduggery, it's spelled out in the US Constitution's definition of treaty, Article II, Section 2, Clause 2. The people were not formally heard.
The administration is administering the USA. It's the USA that commits. To other countries it does not matter what your internal rules are to what your country does.
Well I can't speak for all the people who own gold, but I expect the order of actions they'd generally prefer is move the gold to a vault somewhere they think is financially stable first and then engage in a relaxed debate about the merits of storing gold here or there second. It doesn't cost that much to move a bit of metal around.
If countries enter the lunatic phase of money printing you never quite know what they're going to do next. But it probably isn't going to be good for asset owners and it may well already be too late to get things out of well known vaults. Better to be a bit early.
Sorry, but I really have to call this out as pedantic and irrelevant at a time when the main risk is the US going fascist. The Germans in particular are sensitive to that trend.
They're not motivated by an abstract argument. Any moment you're going to see a comment about how they should've put their money in crypto or some foolishness like that. This is not about central banking or government issued currencies. This is about a specific risk of dictatorship and war.
I don’t think this is correct. This is about German politics. Their central bank has been attempting to repatriate gold since 2013 in an effort to centralize their holdings. It’s also not just about the US. In theory, Germany could move all its gold holdings to Switzerland. Where there is a major trading hub. The fact that they want it back in the country is domestic politics.
Everything that happens in politics happens because someone managed to assemble a powerful enough coalition. Maybe some people wanted to repatriate gold before, but not enough to make it happen. Now suddenly, there are enough people.
France just did that and even made some gains. Was in HN today as well.
Germany has lost it, no farsightedness or longer plan. So frustrating how the German gov is failing on these longer term issues and are ground up in day-to-day noise. Flood the zone with shit comes to mind.
That was purely an accounting gain (because of selling that gold and buying it back). After realising this PnL the gold is now held at a much higher cost basis.
Today, a large national poll in Spain showed trump as the largest national threat identified by citizens (81% agree), placing him well above putin. This is consistent even among right wing voters (71%). People also place "American military actions" and "global economic crisis caused by the US" as the largest global risks.
Yes, Polish or Finnish people are probably more on edge towards the east, but it should still be a wakeup call that 8 out of 10 people see the US as the entity they're most terrified of, above any dictator.
> The fact that this question needs asking tells a lot about how other countries see the current administration.
Not really. You just weren't paying attention before. To wit, countries (including Germany!) have been questioning the safety of storing gold in the United State long before the Trump administration.
There probably should be a maximum legal age for the president and congresspeople (e.g. 65 aka "retirement age"). The guy is 78. It's common and expected for brain health to deteriorate, it's not a huge surprise, but the guy has too much ego/narcissism to ever admit that this is happening, and the people in his administration won't want to admit that they put a toxic narcissist with dementia into power and defended him way past the point where it was reasonable to do so.
There's many simple, small changes the US could put in place to make its political system less corrupt.
In theory, the electorate determines the maximum age for a politician by who they vote for…
There were several young Presidential candidates running in both parties over the last few cycles, but voters chose the oldest from each side. Which tells me that voters don’t really care about age as much as they do other things.
Which, when I view it from that lens, kind of makes your argument seem like: “people are voting for politicians based on things I think they shouldn’t, so I want to make a law saying they can’t”
> Which, when I view it from that lens, kind of makes your argument seem like: “people are voting for politicians based on things I think they shouldn’t, so I want to make a law saying they can’t”
Trump's situation has nothing to do with his age or mental acuity. We've had moron presidents before. Biden was supposedly a vegetable at the same time "he" was guiding us to a soft landing from COVID that made most other developed nations extremely envious.
It has everything to do with his public support for heinous and moronic and outright unconstitutional acts, and the way that support is pushed from the Legislative arm of the government. Without the majorities Republicans hold in Congress, Trump could have been rightfully removed months ago.
The President is not as powerful as Trump thinks he is. Congressional Republicans are using him as a lightning rod to keep pressure off their backs. They are mildly beholden to him in certain specifics, in that if Trump tells his base to primary you they often will, but they are not preventing Trump from doing stupid shit that even his base doesn't totally support that will objectively hurt everyone like this Iran war.
Reforming the Presidency cannot change anything because the paper already says he can't do these things. It doesn't matter as long as other people just pretend they don't hold the power they do.
Trump has been a moron, a simpleton, a grifter his entire life. None of this comes from mental deterioration. He's just a fucking moron who only knows retribution and grifting and refusing to pay contracts. A 35 year old Trump would be doing nothing different.
I think the split is between those who recognize it as true, and those who recognize it as true, but are mad you called it out. Because "politics on hn" or "dear leader during war time".
Also, he's 79, and turning 80 this year. I'd be good with a limit of 75, which would mean no one in office at 80+.
No. People turned to Trump because the other side is equally ludicrous, refusing to address things as simple as urban crime and propagating meaningless feel-good solutions.
While I agree with you about the pattern of impotent feel-good solutions, let us be clear that urban crime is a municipality, or possibly state-level problem. People turned to Grump because they wanted simple answers to complex problems (validating their own egos), and they doubled down (refusing listen to their fellow citizens) out of pure mass-media-induced spite.
Mass media reflects top down sentiment. The red media machine frames this as "liberal" to market themselves as some alternative when the reality is that they are openly in the pocket of big business rather than even having to make a show of caring about individuals.
They both present overly simplistic answers. The blue simplistic answers generally fall short and fizzle, as they're framed in disempowering ways and neutered by corporate lobbying. The red simplistic answers cause active harm by rejecting reality and the idea of second order effects. Grump's policies are basically what the grassroots red tribe has been lusting after for decades, and the results have been disaster after disaster - regardless what one thinks effective policy should look like.
(the only two political philosophies I've been able to find that match Grumpism are anarcho-capitalism and religious fundamentalism. I used to have more of an ancap perspective, but I moved past that thanks to Yarvin's writings)
In my hometown, a seventh grade boy was strangled to death by his mom's boyfriend, who had been deported twice and convicted multiple times. It's comical to me you think people abandoned liberals out of 'pure mass-media-induced' spite. I hate this site.
For sure, that is a tragedy with failures of multiple institutions. But a single anecdote doesn't form a general argument! I would say that the main result of putting emphasis on such anecdotes is to make people crave overly simplistic solutions - that exact "mass-media-induced spite" I am talking about.
In this instance, if the murderer had been prevented from reentering the country, this murder would not have happened. Everyone can agree this would have been a much better outcome.
But we can easily imagine a slightly different situation where the mother gets deported, the kid stays here in the "care" of the boyfriend, and then gets subsequently strangled by the citizen-but-criminal boyfriend.
Without data and a logical model, we're hopelessly lost in the weeds. Data for putting in context how prevalent various types of these occurrences actually are. And a logical model that keeps the focus on the relevant details. For instance, the [presumably criminal] convictions seem much more relevant here than the immigration status. And the immigration status seems like a red herring that feeds into those simplistic answers.
It's disturbing to me that you think one criminal is representative of all immigrants. Especially considering immigrants as a whole commit fewer crimes than citizens. The immigrants, especially undocumented, mostly try to keep a low profile and work. But you, rando new account, are trying to imply they are all bloodthirsty criminals because of one tragic case you read about in the news.
Years back, there were people on this site with investments in Tesla that would mass down vote any comments negative comments about Tesla or Musk. There are people on this site currently working on DRM and online ads and regularly defend efforts to defeat ad block efforts. There are immigrants that advocate for pulling up the ladder behind them and advocate for very racist policies.
Don't take the down votes personally, just know there's really scummy people out there
> There are immigrants that advocate for pulling up the ladder behind them and advocate for very racist policies.
If you listen to the immigrants supporting "pulling up the ladder", you wouldn't be making such bad faith attacks. Typically the arguments come from legal immigrants that took no benefits, attacking policies of mass immigration or illegal immigrants and giving social benefits to immigrants. This isn't pulling up the ladder, this is a fiscally conservative view that someone who pays taxes can hold and is a reasonable policy to have.
I didn't downvote you, but I don't agree that he's unpredictable.
At least to me, he is very predictable. He has an MO, and he never deviates very far from it. And he publishes his stream of consciousness on social media, which exposes a lot about what he's thinking at any given moment.
I agree with you, but most average people in the US were blindsided by his obsession with Panama, Canada, and Greenland. Remember, most average people in the US aren't thinking about other countries. Maybe Mexico. I know many older people who love Trump but don't know anything about Iran. It's very confusing, and seemingly counter to his America First and 'I only end wars' comments.
The EU considers breaking the rules and confiscating state and private assets normal to apply some political pressure on the opponent. They should expect US to do the same, because why not, especially under Trump. Given this, it's stupid to hold state's gold reserves in the US.
"apply some political pressure on the opponent" being applied to Russia for a military invasion of a neighboring country is very different than applying to the US, one of Germany's biggest allies and trading partners. I recognize that is changing, and I don't blame Germany at all for questioning whether it's a good idea to continue to hold their gold in the US, but the comparison to the EU seizing Russian assets after Russia launched a full scale invasion of a European country, is pretty specious.
O…K… I will expand on that, but you seem to be looking for a fight, so I’m not sure I’m going to enjoy this thread. Here we are:
It is surprising to me in a bad way that someone thinks the relationship between the US and the EU (who have traditionally been allies) has become so adversarial that someone would compare it to the relationship between Russia and the EU.
The comment was: the EU should expect the US to hammer them the same way they hammered Russia.
And my point was, that would be a significant course change because for the US & EU to be like Russia & EU would be a significant change.
Freezing and confiscating are very different things.
The EU have very deliberately avoided actually confiscating Russia's money. It is sill there, and (much to the annoyance of those who do want to actually confiscate it) Russia can have it back as soon as they stop their illegal invasion of Ukraine.
Closest the EU got to actually confiscating that money is, in fact, a loan such that if the peace agreement fails to include reparations then EU nations cover the loan but everyone's hoping Russia agrees to reparations so they don't need to.
Probably safe as long as Germany is amenable to supporting "American interests" which can be anything and everything as decided by a human RNG they choose to elect.
We don't even need to theorize how this can go wrong. We've got a real example: the French CFA system that is used to do economic colonialism in West Africa [1]. Basically, it works like this:
14 French-speaking Africian former colonies keep significant (>50%) of their gold reserves with the French treasury and use the CFA Franc as a currency, which is pegged to the Euro.
The colonial model is one of discouraging or even outright banning being self-sufficient. Crops that might otherwise feed the local populace are replaced to exportable cash crops. In particular, that's the World Bank/IMF model of "helping".
Anyway, Germany isn't a US imperial interest in the same way Cote d'Ivoire is for France... yet. Still, there are other mechanisms beyond gold that the US uses to influence or even control Germany (ie NATO).
This is almost exactly echoes how European leaders were completely fine with the US illegally blockading and invading Venezuela and then a week later Trump wants Greenland and suddenly they care about "territorial integrity" and what not.
Back when we justified foreign wars with Domino theory and it must be true because Walter Cronkite would never repeat something that wasn't a rigorously validated fact?
Or maybe 20ish years before that when we violently restructured the government or Iran at the behest of supposed allies?
Or how about when we sold our industry overseas because a steel mill who's pollution we can't control on the other side of the world is better than one in Ohio?
It boggles the mind that people cannot grasp that the sum total of bad and shortsighted decisions of the past are what created the present conditions.
It’s always been convenient for Europeans to have America do the dirty work, which is why they could afford to keep military spending so low and deps to gas and oil high. That just doesn’t work anymore. And then there’s China, and I’m told that China has already surpassed the U.S. in many areas. If China takes Taiwan by force, we know that the West and the U.S. will have nothing left to stand up to them.
The trouble is that everyone chooses their own favorite bits from the past and ignores the rest, plus succumbs to unrealistically positive stereotypes about the past.
Back when it used military power to commit war crimes the world over, and gained or maintained financial capital supremacy from it?
As compared to now, when it can only use military power to commit war crimes on a smaller scale, and is throwing away American hegemony in the process?
> Back when it used military power to commit war crimes the world over, and gained or maintained financial capital supremacy from it? As compared to now, when it can only use military power to commit war crimes on a smaller scale, and is throwing away American hegemony in the process?
Such comments either are propaganda or they play into the hands of propagandists.
There is a huge difference in the degree of corruption and malfeasance of this administration. Implying that the current regime is so similar to prior ones downplays the critical importance of restoring competence.
Or, it might be the case that the prior regime had tactfully hidden all of those things being accused by the GP's comment, and this regime is simply doing it in the open with no regard.
Even if this were true (which of course it's not), doing bad stuff in the open actually is far and more deleterious to the fabric of society than doing bad stuff in secret.
for which society? the American society, maybe? they get to feel good about themselves
for the societies all over the globe that have been the targets of such policies for more than a century, I think it's better to call a spade a spade. the non-American politicians and aristocrats that benefit from US imperialism get to hide much better if the Americans are "the good guys"
No even for other societies, it would be far worse if American politicians felt no imperative (moral, political, economic, or otherwise) to not behave like raving lunatics.
This is of course what we're seeing today, where Trump is just discovering his taste for utilizing American military power to achieve his whims.
Hopefully we get bogged down in Iran enough not to continue, but obviously as soon as we started the Iran conflict, the GOP was already talking about "Cuba's next" etc, which is obviously the start of an infinitely long list of places to "liberate."
This situation is far worse for everyone than the one where the US is mostly benign (despite mistakes) relative to its incredible power.
It is absolutely true. The USA has a history of making shit up, kill some million(s) of people, steal their oil.
The only difference is that Donald Trump doesn’t care about plausible deniability at all, unlike previous presidents,which is why the American public remembers (the demons) George Bush neutral or slightly positive. They should both have died in prison.
This is an extremely popular view that recently has been disseminated and while based on fact, is emotional propaganda. It basically exists as a justification for Trump’ and this administrations actions, along the lines of “they’ve always done it, at least we don’t hide it” and gives them a combination of legitimacy and a strange sense of “doing the right thing”.
I understand that it’s true that the USA has been problematic in the past but in this case, the story being sold to people about the US “always” having been bad exists to convince people that there is no other way, and you either have to accept it or tear it all down. Interestingly both benefit the current administration
No, this is not “propaganda “ to justify anything Trump is up to.
The USA has not been “problematic”, it has enforced a particular ideology on the world with the rest of us unwilling participants.
The USA has repeatedly overthrown diplomatically elected leaders(Iran ironically being the best example, a democratic government toppled because it was stopping American business interests and democratising its oil resources) so the USAs ownership class can make their fortunes.
Sometimes , it has stopped elections, exterminated millions, set their villages on fire, because the people were picking the wrong ideology.
Yes those are all bad and you are naive if you think a USA that relishes brutality could not or would not be 1000x worse.
Militarily, the US can trivially eradicate entire countries. It is “only” our leadership and their sense of morals (imperfect and spotty as they are) that prevents this.
A USA run amok for a mere 4 days can literally end human civilization as we know it. One sentence uttered from the mouth of a contemporary POTUS can make the atrocities of WW2, Vietnam, OEF, OIF all look like charity projects.
Whether the US is capable of hiding their maleficence or not should not be an indicator of whether it is safe to deal with them. If your indicator for the US being a good partner in _anything_ is that "well we did corrupt things in the past, but people didn't use to care about it", then the US is still not a good partner.
It's not like the US has never e.g. openly threatened NATO allies with war: There is quite literally a standing law that allows the US president to invade the netherlands if any US military personnel is ever detained by the International Criminal Court.
This law has been on the books for over 20 years and has the publically announced intention to prevent the US from being prosecuted for all the other atrocities committed in e.g. Iraq. This bill was supported by both democrats and republicans.
The reality is that the US' stance towards the rest of the world has not changed with the recent administrations (nor would I expect it to: Trump does not happen in a vacuum). What did change was willingness of the rest of the world to act on the US' actions.
The US government always committed war crimes and all sorts of human rights abuses abroad.
The previous presidents were just more competent stewards of these activities.
In some ways, not being from the US, I don't dislike Trump. He may be a senile buffon and apparent pedophile, but at least he laid bare what the US truly stands for. He was elected twice after all, and still has substantial support.
At least other countries can stop pretending the US is in any way friendly.
May I recommend Chris Hedges' American Fascists The Christian Right and the War on America, published in 2007. The current situation didn't develop in a vacuum, it is the mushroom that shows how far the mycelium has spread and how old it is.
fwiw i agree with you that the current situation is much worse than in the past, given all the horror's being done in the open without any nod toward reason, multilateralism, or public consent
I don't have rose-tinted glasses with regard to US actions in the past, especially in OEF/OIF. So many instances of horror in Vietnam, WW2, and so on.
But all of those things are the awful things that happen during war even with a military, political, and legal apparatus that tries to mitigate it.
We are now dealing with a regime that claims and will make no such efforts. The only reason the Iran war hasn't so far yielded the same horrors is because so far we haven't attempted to occupy Iran.
If we do, I absolutely promise you that a military populated by people who know they can be court martialed, jailed, or even executed for crimes against the local population will be significantly better behaved (even if imperfectly, per your article) than one that is told – from the very top – that they will be accountable for nothing except maximal brutality and lethality.
The past was bad. But the current is far worse. Tell it to the people disappeared in the ICE concentration camps. Or to any trans people in any bad state.
> compared to now, when it can only use military power to commit war crimes on a smaller scale
The fact that the US is not as powerful as it used to be may actually make it dangerous. "On a smaller scale" doesn't mean it cannot destroy the world's economy, as we are seeing now.
I want America to go back to being as it was in precisely 1998.
When there'd be UN resolutions before the armed intervention, a casus belli with (non-fake) evidence of genocide, a peacekeeping force with troops from 39 countries, and captured leaders tried. And the peacekeeping force was able to deliver peace reasonably effectively, instead of bleeding troops and money for decades on end.
And although to some it seemed like an American president trying to distract domestic political attention from his sexual misdeeds, it was just a consensual blowjob from an adult woman.
Peace had just come to Northern Ireland, western relations were improving with Russia (newly democratic) and China (sure to soon adopt democracy as they open up to the world). The first parts of the International Space Station had just been launched. School shootings weren't a thing, the one a year later would be shocking and the cause of major soul-searching. Also Half-Life was game of the year.
“Which is why the Matrix was redesigned to this: the peak of your civilization. I say your civilization, because as soon as [AI] started thinking for you it really became [AI’s] civilization, which is of course what this is all about.”
— Agent Smith, looking out the window at a circa-1998 American city skyline
s/AI/capital/g. In general, but it works really well for that quote.
The problem, as always, isn't the technology. Rather it's how people with power use the technology. Today that technology is"AI". But several decades ago it was the replacement of human judgement with financial modeling and line-goes-up über alles.
(note that even though I'm critiquing "capital" I'm not what you would call an anti-capitalist)
People only notice now because the “right” kind of people are suddenly affected.
Just like the invasion of Ukraine became the most important topic globally for years, and made everyone virtue signal about how important sovereignty supposedly is, whereas sovereignty somehow didn’t matter in Afghanistan, Iraq, Libya, Mali, South Sudan, Iran, Lebanon, and I don’t know where else.
Ya, like the intervention in the Balkan war (Europeans just looked the genocide). Or like the Iraq wars to keep the world oil and gas consumption running. Or the nuclear shield in germany to prevent Russia to invade Europe since the cold war.
There are always two sides to every coin.
That was a very narrow window of time, mostly the time between the fall of the USSR ending the Cold War up to 9/11, so about a 10 years period since the end of WW2.
Before that the USA was aiding and fostering violent dictatorships, helping them to perform coups all around if they were amenable to the US's interests (aka: they were anti-commies) like in Latin America, Iran itself, etc.; bombing countries where their right-wing coups failed like in Vietnam during its independence period after French rule, for example.
There were fuckups too but the declared goals were usually not bad. Now declared goals seem bad. The language is the language of hate. It's a big change. and this is not north korea. it's one of the most powerful country and definitely most influential in the world
Naw, sorry, reading through this thread you're burying your head in the sand; sorry, just calling balls and strikes.
I say that as a person who is out in the streets in the US doing what we can against the current government. But to be honest, we were out in the streets before. The difference is that you were at brunch and didn't notice.
> But to be honest, we were out in the streets before.
Who is "we"? Do you remember your past lives? If you are fighting against every government when you will realize you should maybe just move to another country?
I'm not american or from US but this reads like mental illness
Reading hackernews comments in the morning from Europeans always wakes me up. It’s like a Markov chain of Reddit comments about how Europe doesn’t need the US
We'll be alright, unlike you we only really need to defend ourselves and don't invade random countries all over the world to please Israel and bring about Jesus' second coming, so we probably don't need such a huge military budget like you guys.
Meanwhile your empire is collapsing because you voted for a retarded paedophile. It's so sad and humiliating to have your country led by a retarded paedohpile. Way more cringe than simply having a low military budget. Thoughts and prayers as you say.
> reposting a flagged and deleted comment to this comment (why?)
The big difference before was that america commit war crimes, but it did so in a socially acceptable way and was able to keep a polite face in important company.
It's like how being a manager at tech companies is 95% speaking affluently and sounding like you know what you're doing (and also like 80% being white). We used to sound like we knew what we were doing. Now we don't.
Doesn't that depend on when they acquired the gold and at what price? It has roughly tripled in just 10 years, and increased tenfold since the early 2000s.
Gold is gold. There is no such thing as suspect gold. It can always be subject to a purity test. Those who buy much gold, e.g. Apmex, always do it. The fact that France was able to sell the gold validates that it was gold.
For Germany's national interests, the ideal probably would have been repatriation back in early 2010. A decade after Poland had joined NATO, half a decade after the Baltic States had - the threat of Russia somehow seizing the gold was at a nadir. The 2007-9 fiscal crisis was safely past, the Euro crisis not yet too dire, Obama was in the White House, and the winds were otherwise favorable for quietly sailing Germany's gold back home.
Second best might have been for Germany to get its gold back in mid-2021 - Biden in the White House, but events of 6 Jan '21 making it really obvious that the US wasn't nearly so stable as in the good old days.
Vs. raising the subject now*, with a very temperamental administration in Washington, feels ill-advised. Though I'm probably marking myself as a senile idealist, to even think of a national gov't, or leading media outlet, intelligently working for its nation's long-term interests.
From another angle, I could see leaving it in NYC as a symptom of advanced calcification of Germany's politics and gov't bureaucracy. Moving the gold home would require major decisions, real organizing, and competent execution. Vs. the relative do-nothing of inaction, forever turning the crank of old routines, is so much easier.
Germany already repatriated about half of its gold reserves between 2013 and 2017 from paris and new york to frankfurt.
There has been a recent (as in "18th of march" recent) petition to the Bundestag to repatriate the gold.
The reason not to repatriate the remaining gold back then is because Germany has substantial trade with the US, which is why Germany held gold in new york to begin with: It's the easiest way to resolve USD-Euro currency exchange at the central bank level (this is also why germany got rid of the paris gold reserves: with the euro you don't need currency exchange anymore).
Also, as you mentioned, the idea of "officially" repatriating gold with the current administration is quite dicey. It is very possible that the correct way of resolving this is to just stop buying gold in new york and let the currency exchange flux deal with the slow unwinding of the reserves without explicit repatriation.
Effectively none. The US has a huge trade deficit with Germany/Europe so there is practically never a case where the US receives gold from Germany: It's always more then offset by the deficit.
The equivalent for the US would be the consumption goods that are already flowing into the US. I.e. US gets goods but doesn't sell enough to Germany, so the difference to maintain the total exchange rate is the Gold.
That's also why it was trivial for france to repatriate its gold compared to germany: Germany holds about 10x the amount of gold in the US compared to France (France was ~120 tons, Germany is roughly 1200 tons: France earned its gold through different trade).
That's also why it is such a complex thing to repatriate German reserves: France took almost 1 year to repatriate its gold. For Germany, the efforts would be decade spanning (though maybe with recent changes there is a little more urgency).
Of course not. That's why Charles de Gaulle repatriated French gold from the New York Fed in the 1960s. Before Trump, there was Nixon, the US has form in reneging on its commitments.
It seems there are still 138 tons of gold left over that will be recovered by 2028:
I might be wrong in my reading, but i read the article as stating that while all french gold is now in France, some of that gold is still below modern standards, not that there still remains any gold in the USA.
I'm a huge fan of those kinds of "laws"¹. My favorite one is Conway's law². Having said that Betteridge's Law never really convinced me. As far as my gut is concerned it's just always true for one in two cases.
2: "[O]rganizations which design systems (in the broad sense used here) are constrained to produce designs which are copies of the communication structures of these organizations."
Betteridge’s law needs allowances for cases where the issue at hand is opinion or speculation. In this case, the non-clickbait headline would be “Germany’s Gold isn’t Safe in New York”, but the facts aren’t there to go to press with that.
The other article on France's gold reserves mentioned that France sold their older gold bars in the US, and used the money to purchase higher-standard gold bars in Europe. In their case, they did that over many decades and just finished now.
The unproven but persistent conspiracy theory that the US was behind one or more assassination attempts on Charles de Gaulle. Often brought up in connection with gold, the exorbitant privilege, and beer.
Its persistence is truly a mystery. After all, the US never had, and probably never will, tried to overthrow or assassinate a country leader with strongly held anti-American views.
At today's prices, that's around 1400 tons of gold. It's made out of lots of individual gold bars, and they can certainly move it in increments, by road then air or sea, unless the American government stops them doing it.
People ship million-dollar assets all the time. It would be a huge task to make 160,000 such trips, though.
No, equal. If the profit gained from buying/selling gold in New York and doing the opposite in London is not equal to the cost of physically transporting the gold across the Atlantic then there is and arbitrage opportunity and in a perfect market it would be eliminated until those costs are exactly equal.
In reality markets aren't perfect, and also you'd have to take into account the benefit that doing things digitally is much faster, so it won't actually be equal. But in the magic world that economists live in it should be.
Compared with the logistics of moving that much gold safely, "moving" it by selling it and buying the equivalent in less fraught location need not be that much slower.
They can also sell it in the US, buy it in Europe, as France did. It's also the preferable route because IIRC the Chinese have had suspicions about the quality of their gold holdings held in the US for sometime now. That is, US-stored gold is not of the same quality grade as in the rest of the world.
The usual claim, which is difficult to prove without physical access to the bars, is that some bars were made by melting and casting the confiscated gold coins that FDR gathered in the 1930s.
Such bars would not be to the 99.9 percent gold standard set by the London Bullion Market Association. They would instead be at about 90% purity, since American gold coins had 10% copper added, which makes the gold harder and more wear-resistant.
The Deutsche Bundesbank has a long list of every single gold bar in their possession (including those currently stored in GB and USA), including their weight (to 0.1 gram) and purity (at least 995/1000 as far as I can tell).
I don't read German well and don't care to run this through a translator, but this is fascinating. I wonder how this list was compiled, by whom, and when it is used (is the gold audited)? You could randomly sample bars from the list to check the status of the gold periodically. I'm curious if other countries maintain similar lists.
I don't think they regularly audit the gold bars. But according to an article I read, the German Bundesbank used these lists to check off each of the bars transferred between 2013 and 2017 (when they transferred ~ 300 tons each from Paris and New York¹).
Back then, they brought the gold bars to Germany, weighed them at multiple checkpoints, and melted them here. AFAIK, no discrepancies between list and actual weight/fineness were found.
I think this list is not only used for internal audits but also to assure the public and banks that Germany indeed knows in detail where its gold is stored.
Yes, it's called the nuclear umbrella, Potsdam '45 and the fact that the Soviets are out of the equation. Even with the Soviets in place the Americans had no second thoughts about getting rid of Bretton Woods when it suited them.
Having your stuff stored in another country is ultimately a voucher of confidence, I can't see Trump or anyone else willingly misusing that trust. I do think the Western leaders need to temper their tendencies for isolationism these days, what's the alternative guys? And why even think that other people/cultures will want you in their swimming-pool if you can't keep your own one clean/functional?
(this comment also covers France recently bringing home their gold)
I do find the down votes odd, comment seem to contribute to the discussion, is it a reflex move because of intense dislike of the sitting US president?
Western reflexes towards isolationism comes from two factors:
1. Long-term backlash against unchecked globalization. Every western country has to come to grips with the long-term impacts of the deindustrialization that globalization has enabled - this impacts their domestic societal stability, their long-term economic growth, and their ability to act internationally and independently.
2. One particular western leader (who happened to come to power, at least partly riding the wave of the backlash above) has accelerated this trend by taking the possibility of trans-Atlantic (+plus a few Pacific trends) tradebloc to form "globalization lite" as a middle ground solution (honestly, I have no idea how viable this would have actually been), and took it behind the shed and shot it, and then burned the corpse.
Globalization was bearable in part because America did infact run the game, and tended to run the game reasonably well. US aligned nations could all see China growing in strength, but they all figured that as long as they played their role and played nice, that when the time came, they could join the US in whatever new game it wanted to play, or join the US in helping push back. What they perhaps did not count on was just has careless America could be, or that America would want to stop playing with them at all.
Towards your point on confidence and trust. As others have pointed out, Trump has also violated trust in all sorts of ways. Trump delights in norm and trust breaking, as a form of dominance display - both as meat for the base, but also to satisfy his own impulses. But perhaps worse, I think a lot of people are now also calculating that Trump could easily misuse or violate trust without really knowing it. Iran should have clarified to everyone that the Trump administration is willing the act on deeply flawed (or perhaps absent) second order (or even move-countermove) planning.
> the Western leaders need to temper their tendencies for isolationism these days, what's the alternative guys?
Agreed, but tempering their tendencies for isolationism doesn't mean trusting a country that threatens to invade so-called allies. There are many other places, starting in the EU (since Germany is already in the EU, of course).
He is not a trustworthy negotiating partner. This is a real estate developers approach to deals - they are only selling you a condo once, so they are going to screw you as badly as they can while still making the sale. They never plan to do business with you again.
Perversely, I’m not even sure that US seizing foreign owned gold would crash the gold market. Remember prices are set by incremental sales, not total held. So there would likely be a rush to buy gold domiciled outside the US, creating upwards price pressure if only temporary.
Sure he might want to do that, but I think his behavior shows he's still beholden to the markets to a large degree. A lot of his (self?) image is tied into 'economic performance', rightly or wrongly.
And despite the meme that GOP is better for stock market & that Trump is obsessed with it - its only up 10% since inauguration vs 17% this far into Biden presidency.
And he seems to be trying to crash it each spring (Tariffs, Iran).. looking forward to next season.
The market is not stupid enough to ignore what he does after hours, it just blunts the knee jerk reaction by a few hours.
Not really Trump-specific is it, given Europe seized a ton of Russian assets. Maybe they just realized how easy that was and that nobody is going to war over it.
Exactly this. There were thousands of warnings that the western order conducting arbitrary seizure of treaty-protected deposits held by the outgroup was always a slippery slope to everybody getting hurt, right back to confiscating insured Cypriot bank deposits a decade and a half ago.
But we live in a world where it is considered poor form to expect history qualifications in elected office, so this kind of crash, followed by the long descent, is baked in.
One, Russia’s stuff hasn’t been seized. Europe tried. But, in true form, failed to get its act together.
Two, is the argument really that Trump would be constrained by precedent if Europe and the U.S. got into a situation where seizing the former’s gold comes on the table?
Freezing assets is simple. Seizing them is a huge pain. The EU has a hard time agreeing how to do it and who takes the liability for the Russian claims.
The EU has a hard time agreeing how to do anything, but the net effect for Russia seems about the same either way. If the 'freezing' lasts forever, what is the practical difference from the Russian perspective?
not committing now = keeping your options open. it's smart. usually who has more different available moves is in a better situation. money are not going anywhere and if EU doesn't urgently need them it's a nice bonus in future.
Unless Putin's scientists really discover a way to keep him alive forever, Russia will likely one day have a different leader and a different administration, which may be more amenable to diplomacy.
It sounds optimistic, but after Stalin came Khruschev, a much more "normal" person. Though it is true he didn't last even a decade. But there was a lot of political thaw in between, and some of this thaw survived.
Stalin to Kruschev was in a very different context. I don't see any way that Russia's next leader is someone cuddlier, unless through some forcing event.
Contexts are never quite the same. And instead of "cuddlier", I would simply say "more realistic".
It is quite obvious that Russia miscalculated heavily, and someone who wasn't part of the small team that decided to go in, and thus whose face is not at stake, may be more amenable to declaring "OK, our goals have been basically met, let us solve the rest at the negotiation table".
From what I get out of my Russian and Russia-located acquaintances, people are growing tired of this nonsense. Not yet rebellious (though some of the recent actions of the government, like messing with the civilian Internet to the point of unusability, plus mass culling of cows in Siberia, have certainly increased the total level of anger), but dead tired. There is political space to conclude this war, and the reason why it isn't happening is personal.
Europe didn't seize them, the EU and US froze them, and the dividends of those assets in the EU are being seized. There's a big difference, the US actually seizing any country's gold would be much more serious.
To me frozen and seized are roughly interchangeable and mean, minimally, a temporary capture of control of an asset. Although maybe there's some strict legal difference I'm not aware of, I'm not sure there's much practical difference from the Russian PoV.
Confiscation would be e.g. definitively taking control and disposing of it, the proceeds going in to the general funds of the relevant country.
It’s brave to assume the gold is still there. Nobody checks it; last time they did, a bunch of bars were made of tungsten.
If you’re someone guarding the gold, you’d have to be stupid not to replace it with tungsten. A single bar is a lifetime of wages. It’s not like anyone will ever notice, it’s a reserve that will never be spent.
You can't just walk in and out carrying 12kg bars. Also I don't think you can just buy a bar of tungsten, you gotta smelt it, coat with gold, not trivial. That kind of operation would involve a lot of cooperating people. You also need to convert gold to dollars which might not be as trivial as you think.
So maybe that happens, but it's a lot more complicated. And, of course, there are measures against that happening.
It’s a long time gold bug conspiracy theory. There was a case of a Canadian bar that came from a bank that had a tungsten core but there was a huge outcry about that and it was decades ago.
Chinese gold has been tungsten spiked, fairly often actually, but it’s a known fraud vector there so is broadly audited.
