13:38 GMT +321 October 2017
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    Gold bars and a Swiss Franc coin are seen in this illustration picture taken at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna November 7, 2014

    Gold Repatriation From Federal Reserve Would Shatter US Economic Hegemony

    © REUTERS/ Leonhard Foeger
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    Repatriation of foreign gold reserves from the Federal Reserve would undermine the geopolitical role of the US economy in the world.

    As the global economy is being engulfed in crisis, European countries are trying to repatriate their gold reserves from the US Federal Reserve to support their economies.

    The largest gold reserve stored by the Fed belongs to Germany, at 674 tons. On the whole, the country holds nearly 3,500 tons of gold.

    However, both sides were content with the situation: the US received money for storage, and Germany knew its reserves were finely protected.

    The first major attempts by foreign countries to return their gold reserves first began in 2012. At the time, Germany made attempts to withdraw its gold, but it was denied by Washington.

    The US said it could not provide the required security for audit. Then, Washington said it was impossible to differentiate the US gold bars from German ones.

    For European countries, that was a warning signal, as a total of 250 tons of physical gold should have been withdrawn from the Federal Reserve.

    Finally, Berlin managed to repatriate 10 percent of its reserves.

    Experts name two possible reasons behind the US trying to keep at any costs foreign gold reserves in the Fed storage.

    The first one is that dollar unlike other currency like euro or yuan is not backed by gold. As a result, Washington wants to protect the global role of its currency.

    Second, gold repatriation would have positive effect on the global economy. This could seriously affect the US geopolitical and economic dominance in the world.

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    Tags:
    gold, dollar, economy, Federal Reserve System, Germany, United States
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