USGS releases first study to assess global earthquake risk to mineral supplies
Earthquakes have the potential to substantially affect mining operations, leading to supply chain disruptions that adversely affect the global economy.
The Globe and Mail reports ever since the euro zone bond markets first started to get the jitters, hedge fund managers have been whispering that gold could play a part in resolving the crisis.
Until recently, this discussion has mainly been the preserve of conspiracy theorists and backbench German politicians. But now the use of gold to fund a euro zone bailout is coming closer to reality.
The Globe and Mail reports for euro zone countries which between them hold 10,792 tonnes of bullion, gold-collateralized bonds could unlock a large pool of new financing. Italy’s central bank, for example, holds 2,451 tonnes of gold, worth roughly €100 billion and that the country has done it before, when it received a $2 billion bailout from the Bundesbank in 1974 and put up its gold as collateral.
Reuters reported two weeks ago Germany Economy Minister Philipp Roesler said the country’s gold reserves with the central bank cannot be touched, adding his voice to opposition to an idea reportedly discussed at the G20 summit of using reserves to boost euro zone bailout funds.
Earlier this month Julian D.W. Philips asked whether gold can do now what the Rentenmark did for Germany in 1923? This was after Robert Zoellick of the World Bank set the cat amongst the pigeons by suggesting that gold should be used as a reference point for currencies at the current time, a time when confidence in currencies is declining fast.
Commodity Online today quoted an HSBC research note that said the investment bank believes that gold may be approaching levels at which emerging markets and official-sector buyers would again become interested in acquiring bullion. In the case of central banks, HSBC believes that a host of EM official-sector buyers will accumulate gold for the foreseeable future in a bid to diversify their dollar-laden foreign-exchange reserves.
Casey Research investigated global central bank gold holdings and argues the clear point of the chart below is that the nominal quantity of the paper money in circulation has been growing much faster than the gold that formerly underpinned currencies and may be called upon to do so again before this is over.
3 Comments
jamesont
This may indicate that there may be a movement towards a true gold standard.
allritejack
Selling their gold, which is the only true wealth they possess, would be the ultimate folly. It is in any event a trifling amount of the indebtedness of Europe. Brown’s idiocy cost the UK some 12 Billion GBP through his ill conceived selling of half the nations true wealth. They will need their gold down the road when the full extent of the debasement of the currencies comes to light.
Fehertom64
Maybe. There are many more reserves in the planet Earth. While You are running about gold you forget the other materials. These get undervalued – do not forget it.