Monday’s media reported that the Austrian Court of Audit (ACA) was set to check the local central bank’s gold reserves at the Bank of England … and kaboom !!! 24 hours later the Court had finished with his task without having found a fault. At least central bank OeNB said so in its yearly press conference on tuesday. The auditors didn’t voice a word.
The circumstances surrounding this story are rather unusual and suited to raise the suspicion of even most gullible persons. On monday, 26th of march, business monthly “Trend” hit the street with its june issue. In its editorial central bank governor Ewald Nowotny was quoted saying that the ACA would be auditing physical gold inventories in a short time.
Publications like Trend usually have a copy deadline of five to seven days in advance of their release – so the auditors would have had a week to conduct their inspection. Was this possible? Sure. Was it probable? Not so much.
What stood out like a sore thumb was the fact, that this audit had allegedly taken place only days before OeNB’s most important press conference in which the gold reserves were bound to become a topic of its own. The national bank has been under fire from FPÖ, Austrias right wing opposition party, which is campaigning for returning the reserves back to Austria.
In this situation it absolutely did make sense for OeNB to address the topic actively. Governor Nowotny did so in a coy manner, so that his audience would get the feeling that he regarded it as somewhat unappropriate to disclose the results (as in fact it would be, if it were more than a pre-manufactured psyop).
OeNB president Raidl, who is not involved with the ECB, was a lot more assertive than governor Nowotny. He said: “The gold has been physically in place and the Court of Auditors was able to verify this for itself.”
Strangely enough, the ACA was completely absent from the scene and appearantly nobody from the media was able or willing to get a confirmation from the ACA or rather: a little more details on what their auditors really had found in London. The papers simply reported it as a fact: “Das Gold ist eh da.” The ACA did not issue any statement of its own nor did it reply immediately to an email of this blogger.
OeNB President Raidl did not give any specifics or add some caveats – as one would expect in a rather complicated matter like this. He basically stated: All of the austrian metal in UK – that is: 224 metric tons – is physical gold and it is in stock.
This is not credible at all – it would not even be so straight from the mouth of ACA president Josef Moser. This is the case because there can be no question, that part of austrian gold stock is still leased out. The “Presse”s Niko Jilch, probably the best informed austrian journalist in all matters of gold, thinks that 9 per cent are still outstanding and will be returned in the course of 2014 (while stressing at the same time all over again: it is all in London).
If it is still leased you may not count it as physical gold. Furthermore there is a problem with another category of non physical gold, which is not even mentioned once by Jilch or his peers: gold accounts.
The simplest and most unambiguous approach for OeNB would have been that of the german Bundesbank, which makes use of the yearly publication of its balance sheet to state the amount of their gold receivables (which happen to be negligible). This is what the BuBa financial statement looks like:
The OeNB could have done so as well – if it had wanted to. There must be a reason why it did not.
Edit, 2014-05-28: As was to be expected, a spokeswoman for ACA said to staatsstreich, that she cannot give a statement on a pending probe. They seemingly do not have the intention to deviate from their routine line of action. They do not give a time line for their report to the Austrian parliament either.
P.S: To understand the title one should watch the following Southpark clip: