Poll: What Does Germany’s Repatriation of Gold Reserves Mean?
In a poll conducted earlier this week in the CFA Institute Financial NewsBrief, we asked for readers’ reactions to Germany’s repatriation of gold reserves.
Germany’s repatriation of gold reserves is a sign of:
Germany’s central bank, the Bundesbank, made waves in markets last week when it announced plans to repatriate a significant portion of its foreign gold holdings. Specifically, it is aiming to maintain at least 50% of gold holdings within national borders by 2020, up from 31%.
The most popular response to our poll about the Bundesbank’s decision reveals that 36% of 857 respondents think Germany is preparing for a systemic-risk event. The second- and third-most-popular responses are that the German government is bowing to public pressure and that the move is a result of declining trust among nations.
A separate poll conducted through our Asia-Pacific NewsBrief shows that 36% of respondents think Germany is preparing for a systemic-risk event, whereas about 28% see the move as motivated by declining trust among nations, and about 23% think the German government is bowing to public pressure.
Interestingly, the Bundesbank is reducing gold held in Paris down to zero. Clearly, the role and importance of gold have grown substantially since the onset of the financial crisis in 2008. As J.P. Morgan once famously quipped, “Gold is money. Everything else is credit.”
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