At Berlin's insistence, Washington has finally returned 300 metric tons of gold to Germany.

According to reports, the transfer was uneventful and even ahead of schedule:

The German Central bank finally got its gold back. But it wasn't easy... “The transfers were carried out without any disruptions or irregularities,” Bundesbank board member Carl-Ludwig Thiele said in yesterday’s news release. “The gold storage plan for New York, which envisaged the transfer of 300 tons of gold from New York to Frankfurt, was fully realized in 2016.” The 300 metric tons of gold repatriated from New York equates to 20 percent of Germany’s gold holdings in the United States. Thiele also announced that Germany would repatriate 100 percent of its gold holdings in France by the end of 2017. The Bundesbank currently stores 47.9 percent of its gold in Germany, 36.6 percent in the U.S., 12.8 percent in England, and a mere 2.7 percent in France. Once the transfers are complete, Germany will hold half its 3,378 tons of gold in Frankfurt, with the balance in New York and London.

But experts say that Germany's decision to repatriate its gold revealed a not-so-secret secret: U.S. gold reserves are not nearly as large as they are reported to be:

Valentin Katasonov, a professor at the International Finance Department at the Moscow State Institute of International Relations (MGIMO), suggested that the US disposed of Germany’s gold bars at its own discretion. "There are a lot of signs that the gold was not physically presented in the New York vaults when Germany called it back. Of course, the US began to return it to Germany but there is one interesting detail. When you leave your suitcase in the luggage storage you expect to get back the same suitcase. But Germany took the wrong 'suitcase,'" Katasonov told Radio Sputnik. According to the economist, the gold bars that Bundesbank repatriated have different labels. He suggested that the US might have replaced the German bullion with different gold bars bought from the market.

All of this suggests of course that the U.S. had to buy gold off the market to fill Germany's order.

This is interesting in its own right. But another important aspect of this story is: Why is Germany so eager to get its gold back? There are multiple competing theories, but here is one of them:

With President Trump threatening to undermine both nato and the European Union, you can be sure that German leaders are discussing how they can shore up their economic and military might in a world where America isn’t their ally. Germany’s old World War II foes will soon regret turning Germany loose. The world is about to see a much stronger Bundesbank—and consequently, a more aggressive German nation. German confidence and power grows with the clink of each brick it adds to its towering stack of gold!

We reported last week that Russia and China were dumping U.S. treasuries and buying up gold. It seems that Germany is positioning itself accordingly.

Things are getting interesting.