In a surprise move today, Germany announced it will bring back to Germany some of the 1,500 tons of gold stored in the vaults of the Federal Reserve in New York, and all of the 450 tons currently stashed with the Bank of France in Paris. Just a few months ago, Venezuela brought home all its gold reserves stored in other countries.

Todays move was seen by some as indicating trust was deteriorating among the world’s big central banks. The US has already had it's bonds downgraded from AAA+ and looks as though it may not be able to borrow more to pay what it has commited to pay this year. May be the most significant development since France in 1971 asked for gold for a lot of US currency and Nixon said no, cutting the dollar free from any convertability to bullion.

Should be some interesting action in the precious metals in the days to come. Some believe that a lot of the gold held by the US for foreign countries has been sold or encumbered by promises to sell and may not be available to return to its owner.