Blind Faith in the Financial System is Widespread

Yesterday’s Daily Telegraph contained an article that the Bundesbank withdrew two thirds of its gold holdings from the Bank of England in 2000 and 2001.  Germany is the country with the second largest holding of gold in the world, 3396 tonnes.  Much of this was moved abroad – to the Fed, the Bank of England, and the Bank of France – during the Cold War in case the USSR attacked.


So far, so prudent.  What is truly surprising is the German Court of Auditors admission that the gold “had never been verified physically”.  So the German government, with over 80% of its liquid reserves in gold, has not administered the basic good housekeeping to perform an inventory check on what amounts to almost $200 billion in assets.  Dumbfounding.


Hinde Gold Fund owns considerably less gold than Germany.  Nevertheless, Hinde Capital has a bar list, containing the bar number, purity and assayer, together giving a unique identifier for each bar of gold owned by the Fund.  Furthermore, the CFO and one of the directors personally inspected the Fund’s gold where it is held, in the bank vault of a Swiss private bank in Zurich.  An independent audit is performed twice each year, each bar identified and verified with our bar list (an excerpt of which is shown below).


Even the Germans it seems, with their reputation for efficiency and prudence, place blind faith in the global financial system.  Complacency and naivety abound. We hope, at Hinde Capital, we have avoided these classic human errors, and have constructed our gold fund accordingly: a safe, secure investment, providing peace of mind for our clients.

Comments are closed.