Trump spurs questions about safety of Germany's gold in New York
FRANKFURT/BERLIN: The safety of Germany's gold reserves held overseas and in New York in particular, until recently mainly a talking point for the country's far-right party and gold bugs, is becoming a matter of public debate with Donald Trump back in the White House.
The Bundesbank, Germany's central bank, has the world's second largest stock of gold at 3,352 tonnes. One-third of it is stored at the Federal Reserve Bank of New York for reasons dating back to the Cold War and the monetary system created in the wake of World War Two.
Those holdings have occasionally attracted scrutiny in the past, and the right-wing Alternative for Germany (AfD) has embraced calls for a return of the country's gold back home.
U.S. President Donald Trump's confrontations with longstanding allies over trade and security, and his attacks on the Fed, have revived the issue in recent weeks and more mainstream voices have joined the debate.
Germany's Taxpayers Federation sent letters this week to the Bundesbank and the Finance Ministry calling on them to repatriate the gold stored in the United States.
'Trump wants to control the Fed, which would also mean controlling the German gold reserves in the U.S.' Michael Jaeger, the Taxpayers Federation's vice-president, told Reuters. 'It's our money, it should be brought back.'
Markus Ferber, an influential member of the European Parliament for Germany's ruling Christian Democrats, said the United States was 'no longer the reliable partner it used to be.'
'Trump is erratic and one cannot rule out that someday he will come up with creative ideas how to treat foreign gold reserves,' he told Reuters. 'The Bundesbank's policy for gold reserves has to reflect the new geopolitical realities.'
Public broadcasters ZDF and ARD have also recently carried reports asking how safe Germany's gold is in New York.
The Bundesbank said the New York Fed remained 'an important storage location' for its gold.
'We have no doubt that in the New York Fed we have a trustworthy, reliable partner for the storage of our gold holdings,' the central bank said in response to a Reuters enquiry.
The German Finance Ministry referred Reuters queries on the matter to the central bank, while stressing the Bundesbank's independence.
Any hint that Germany might be considering moving gold out of New York would be politically sensitive as it could be interpreted as lack of confidence in the Federal Reserve and its independence.
The European Central Bank last week stressed its trust in the Fed as a reliable partner. But Trump's frequent criticism of Fed chair Jerome Powell, whose term ends in a year, has fuelled some concerns about the Fed's future independence and its long-standing commitments to its partners.
Peter Boehringer, the architect of the original decade-old gold campaign and now an AfD lawmaker, said he felt vindicated that the topic of repatriating gold reserves has now become a matter discussed by mainstream media and other lawmakers.
'When I started asking about the gold, I was dismissed as a conspiracy theorist,' he said. 'Today, after Trump, my concerns are shared widely.'
Germany accumulated most of its gold during its 1950s-1960s export boom.
A key advantage of storing some of it in New York during the Cold War was to keep it at a safe distance from Russia in case of an invasion.
The gold also cemented a military alliance with the United States, which still has dozens of military bases around Germany, including Europe's largest.
With the Soviet Union long gone, the Bundesbank brought back 300 tonnes of gold from New York between 2014 and 2017, saying it wanted to 'build confidence at home'.
But Russia's invasion of Ukraine, and the implicit threat it represents for the rest of Europe, was likely to complicate Germany's geopolitical calculus again.
For Ferber, this underscored the need for greater diversification across several, and potentially new, locations. Today, Germany's gold reserves are held at the Bundesbank headquarters in Frankfurt, in New York, and at the Bank of England in London.
'For gold reserves, diversification is key. Having all eggs in too few baskets is never advisable,' Ferber said, without specifying where the gold should be brought.
Fritz Guentzler, a spokesperson for the Christian Democrats in the German parliament, said he had no reason to mistrust the Fed but the Bundesbank should continue 'regularly inspecting the stocks' of gold.
The Bundesbank said it ran regular sample tests and had inspected 13% of stock in New York over the years.
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Malay Mail
2 hours ago
- Malay Mail
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2 hours ago
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The Star
2 hours ago
- The Star
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"President Trump is acting within his lawful authority to deport illegal aliens and protect the American people. While the Supreme Court has rightfully acknowledged the president's authority in some cases, in others they have invented new due process rights for illegal aliens that will make America less safe. We are confident in the legality of our actions and will continue fighting to keep President Trump's promises," White House spokesperson Abigail Jackson told Reuters. The justices twice - on April 7 and on May 16 - have placed limits on the administration's attempt to implement Trump's invocation of a 1798 law called the Alien Enemies Act, which historically has been employed only in wartime, to swiftly deport Venezuelan migrants who it has accused of being members of the Tren de Aragua gang. Lawyers and family members of some of the migrants have disputed the gang membership allegation. On May 16, the justices also said a bid by the administration to deport migrants from a detention center in Texas failed basic constitutional requirements. Giving migrants "notice roughly 24 hours before removal, devoid of information about how to exercise due process rights to contest that removal, surely does not pass muster," the court stated. Due process generally requires the government to provide notice and an opportunity for a hearing before taking certain adverse actions. The court has not outright barred the administration from pursuing these deportations under the Alien Enemies Act, as the justices have yet to decide the legality of using the law for this purpose. The U.S. government last invoked the Alien Enemies Act during World War Two to intern and deport people of Japanese, German and Italian descent. "The Supreme Court has in several cases reaffirmed some basic principles of constitutional law (including that) the due process clause applies to all people on U.S. soil," said Elora Mukherjee, director of Columbia Law School's immigrants' rights clinic. Even for alleged gang members, Mukherjee said, the court "has been extremely clear that they are entitled to notice before they can be summarily deported from the United States." A WRONGLY DEPORTED MAN In a separate case, the court on April 10 ordered the administration to facilitate the release from custody in El Salvador of Kilmar Abrego Garcia, a Salvadoran migrant who was living in Maryland. The administration has acknowledged that Abrego Garcia was wrongly deported to El Salvador. The administration has yet to return Abrego Garcia to the United States, which according to some critics amounts to defiance of the Supreme Court. The administration deported on March 15 more than 200 people to El Salvador, where they were detained in the country's massive anti-terrorism prison under a deal in which the United States is paying President Nayib Bukele's government $6 million. Ilya Somin, a constitutional law professor at George Mason University, said the Supreme Court overall has tried to curb the administration's "more extreme and most blatantly illegal policies" without abandoning its traditional deference to presidential authority on immigration issues. "I think they have made a solid effort to strike a balance," said Somin, referring to the Alien Enemies Act and Abrego Garcia cases. "But I still think there is excessive deference, and a tolerance for things that would not be permitted outside the immigration field." That deference was on display over the past two weeks with the court's decisions letting Trump terminate the grants of temporary protected status and humanitarian parole previously given to migrants. Such consequential orders were issued without the court offering any reasoning, Mukherjee noted. "Collectively, those two decisions strip immigration status and legal protections in the United States from more than 800,000 people. And the decisions are devastating for the lives of those who are affected," Mukherjee said. "Those individuals could be subject to deportations, family separation, losing their jobs, and if they're deported, possibly even losing their lives." TRAVEL BAN RULING Trump also pursued restrictive immigration policies in his first term as president, from 2017-2021. The Supreme Court gave Trump a major victory in 2018, upholding his travel ban targeting people from several Muslim-majority countries. In 2020, the court blocked Trump's bid to end a program that protects from deportation hundreds of thousands of migrants - often called "Dreamers" - who entered the United States illegally as children. Other major immigration-related cases are currently pending before the justices, including Trump's effort to broadly enforce his January executive order to restrict birthright citizenship - a directive at odds with the longstanding interpretation of the Constitution as conferring citizenship on virtually every baby born on U.S. soil. The court heard arguments in that case on May 15 and has not yet rendered a decision. Another case concerns the administration's efforts to increase the practice of deporting migrants to countries other than their own, including to places such as war-torn South Sudan. Boston-based U.S. District Judge Brian Murphy required that migrants destined for so-called "third countries" be notified and given a meaningful chance to seek legal relief by showing the harms they may face by being send there. Murphy on May 21 ruled that the administration had violated his court order by attempting to deport migrants to South Sudan. They are now being held at a military base in Djibouti. The administration on May 27 asked the justices to lift Murphy's order because it said the third-country process is needed to remove migrants who commit crimes because their countries of origin are often unwilling to take them back. Johnson predicted that the Supreme Court will side with the migrants in this dispute. "I think that the court will enforce the due process rights of a non-citizen before removal to a third country," Johnson said. (Reporting by Andrew Chung in New York; Additional reporting by John Kruzel; Editing by Will Dunham)
