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Financial Times Says European Banks Lent Their Customer's Gold To The Bis

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Financial Times Says European Banks Lent Their Customer's Gold to the BIS

Although it does not appear until almost the end of this article in the Financial Times, BIS Gold Swaps Mystery Unravelled, the source of the gold provided in the dollar swaps with BIS is coming from customers of about 10 European banks who are holding their gold at the banks in 'unallocated accounts.'

"The gold used in the swaps came mainly from investors’ deposit accounts at the European commercial banks. Some investors prefer to deposit their gold in so-called “allocated accounts”, which restrict the custodian banks’ ability to use the gold in their market operations by assigning them specific bullion bars. But other investors prefer cheaper “unallocated accounts”, which give banks access to their bullion for their day-to-day operations.

The European Banks, including HSBC, Société Générale and BNP Paribas, were desperately in need of dollars because of a repeat of the eurodollar short squeeze which we had previously identified. Their customers were withdrawing dollars previously on deposit at the banks, which were unable to meet the demand because of the deterioration of the dollar assets they held, and because of the fractional reserve nature of their operations.

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Guest sillybear2

Proper gold bugs go physical and totally opt out of the house of cards. That said this is no different from your cash deposit made on Monday being lent out to someone else to pay their gas bill on Tuesday. The bank claims legal ownership of any cash you deposit with them, you get an IOU in return, on the basis you trust them to make good on it when needed.

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So, let's assume that I own a gold bar and I could not afford to keep it in my own private vault in the bank but had it deposited in the general vault with all the other 'poor people's bars'... then the bank has every right to go and swap my gold for some dollars in order to pay out dollars to another customer?

So now I am dependent upon the BIS giving my bank back my gold bar so that I can get it?

No wonder the rich have allegedly been demanding their physical gold.

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Proper gold bugs go physical and totally opt out of the house of cards. That said this is no different from your cash deposit made on Monday being lent out to someone else to pay their gas bill on Tuesday. The bank claims legal ownership of any cash you deposit with them, you get an IOU in return, on the basis you trust them to make good on it when needed.

yep i know

shame most of the population dont yet know it

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Guest sillybear2

yep i know

shame most of the population dont yet know it

Most of the public are in debt, 50% of savers have less than £500, so they don't really care. However I think Lehman, NR, B&B, IceSave, etc drove the point home with people who have enough money to care about such things.

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Most of the public are in debt, 50% of savers have less than £500, so they don't really care. However I think Lehman, NR, B&B, IceSave, etc drove the point home with people who have enough money to care about such things.

the awareness is still low

in my own experience 100% are not aware of this fact, out of about 50 business owners i have asked

link

74% think they own their money, when of course they do not, the bank does.

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Most of the public are in debt, 50% of savers have less than £500, so they don't really care. However I think Lehman, NR, B&B, IceSave, etc drove the point home with people who have enough money to care about such things.

Yeah but no but.. we're all minted, innit, 'cos we's all got invested in property, like.

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Guest sillybear2

the awareness is still low

in my own experience 100% are not aware of this fact, out of about 50 business owners i have asked

link

Of course, but if significant amounts of people were aware of then con then the lack of trust becomes a self-fulfilling prophecy, the system would cease up.

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Guest sillybear2

i know

its coming

It already did, but the bankers went crying off to nanny state before the general public noticed too many spinning plates hitting the deck.

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Some people find it normal that fractional reserve is applied to gold holdings. I'm surprised it is even legal.

his bit of news is going to spread around the web like wildfire.

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Guest sillybear2

Some people find it normal that fractional reserve is applied to gold holdings. I'm surprised it is even legal.

his bit of news is going to spread around the web like wildfire.

I'm not saying it's acceptable but given the whole system relies on such confidence tricks it's hardly surprising. It there's a market price and it's readily exchangeable into fiat then it's an asset that can be fractioned, look at banks balance sheets, they contain gilts, corporate bonds, corporate paper, equity stakes, cash equivalents, collateralized commercial and residential property, so gold is simply another commodity that can be abstracted into paper and run through the magic FRB mill. The whole concept of modern banking was born out of goldsmiths conning customers.

Swap agreements bring into question the viability of the institution you're trusting to hold your gold, and gold will be at its most valuable when they fail, hence the reason gold bugs stay well clear. However, in terms of market manipulation of the gold price then you need to look at the futures market, that's where paper fictions can be used to influence tangible assets.

Edited by sillybear2

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If the gold isn't in your own hands you don't own it.

Including the likes of Goldmoney? Would you trust them (or Bullionvault)?

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I've said before, unless you own physical gold in your hand, how do you know your "gold" even exists?

It doesn't have to, it's just like any other stock or investment.

You buy it for £x. You sell it for £y. As you can never hold it in your hand, you aren't buying gold, you are merely speculating in the price of gold.

None of the gold actually has to exist. The bank could also be speculating... naked selling. As long as it has enough money to pay out to anyone who wishes to sell up they are fine.

I fully believe that when the tide goes out, people will suddenly find that 90% of the "gold" being traded was merely theoretical.

Remember that the private holding of bullion in the UK is illegal. you can own it, but you can never hold it or touch it.

Should all the goldbugs turn out to be right, and the price of gold triple, unless these gold-dealer-banks really do have all the ACTUAL gold they claim to have, the will instantly be bankrupted.

The chances are, the gold doesn't exist. If thats the case, the goldbugs will lose all their money. No FSA guaranty on gold.

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.Remember that the private holding of bullion in the UK is illegal. you can own it, but you can never hold it or touch it.

What the hell are you on about, thats aload of hogwash.

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.Remember that the private holding of bullion in the UK is illegal. you can own it, but you can never hold it or touch it.

What the hell are you on about, thats aload of hogwash.

Seconded. What total hogwash. (It was true in the 1960s though, for instance.)

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Guest sillybear2

ame='Scott Sando' date='31 July 2010 - 01:43 PM' timestamp='1280583791' post='2647335']

Seconded. What total hogwash. (It was true in the 1960s though, for instance.)

The London gold pool still operates as a closed loop between the big banks and dealers, your average joe cannot just pull bullion out of the system and redeposit it at will, every bar is officially tracked and verified, if any gold leaves the system it has to be reassayed before it's accepted back.

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The London gold pool still operates as a closed loop between the big banks and dealers, your average joe cannot just pull bullion out of the system and redeposit it at will, every bar is officially tracked and verified, if any gold leaves the system it has to be reassayed before it's accepted back.

Yes, for 400 Oz London Good Delivery Bars.

So just buy coins or smaller bars - it really is very simple and easy to buy physical gold in the UK.

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Yes, for 400 Oz London Good Delivery Bars.

So just buy coins or smaller bars - it really is very simple and easy to buy physical gold in the UK.

They aren't bullion.

Bullion is something very specific... gold at a certain percentage purity.... 99.9% fine I think, though might be 99.99%.

You "own" bullion but you cannot "possess"/hold it... only certified bodies such as banks can do this.

There are plenty of physical forms of gold you can hold in your hand, from jewelry to coins, but these aren't the same as the gold many people on here buy where the banks hold it for them.

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They aren't bullion.

Bullion is something very specific... gold at a certain percentage purity.... 99.9% fine I think, though might be 99.99%.

You "own" bullion but you cannot "possess"/hold it... only certified bodies such as banks can do this.

There are plenty of physical forms of gold you can hold in your hand, from jewelry to coins, but these aren't the same as the gold many people on here buy where the banks hold it for them.

Sorry but you are talking absolute rubbish.

It is perfectly possible and legal to own and possess gold be it in any format you wish: jewellry, coins, small bars, large bars, unrefined chunks.

Coins are the easiest to hold because they have a recognised form and do not need to be assayed like some of the larger bars in your personal possession would need to be (although given the simplicity of measuring the dimensions and weight this is a moot point anyway).

Gold coins come in all sorts of shapes and sizes and fractions of ounces. Krugerands for example are 22 Carat gold (but contain a full oz). Canadian Maples are 24 Carat / .9999 pure gold and contain an ounce.

Why do you say that you cannot possess gold?

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Sorry but you are talking absolute rubbish.

It is perfectly possible and legal to own and possess gold be it in any format you wish: jewellry, coins, small bars, large bars, unrefined chunks.

Coins are the easiest to hold because they have a recognised form and do not need to be assayed like some of the larger bars in your personal possession would need to be (although given the simplicity of measuring the dimensions and weight this is a moot point anyway).

Gold coins come in all sorts of shapes and sizes and fractions of ounces. Krugerands for example are 22 Carat gold (but contain a full oz). Canadian Maples are 24 Carat / .9999 pure gold and contain an ounce.

Why do you say that you cannot possess gold?

Maybe what he's trying to say is that bullion has a technical definition and when gold is transferred outside the system of certifiable holders it can no longer technically be referred to as bullion without being re-assayed.

BTW, there are elements that are very similar in terms of gold to density, so similar in fact it would be very hard to tell the difference by measuring.

TaxAbuserOfTheWeek, do you have any updates on when my gas supply is due to run out ?

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The London gold pool still operates as a closed loop between the big banks and dealers, your average joe cannot just pull bullion out of the system and redeposit it at will, every bar is officially tracked and verified, if any gold leaves the system it has to be reassayed before it's accepted back.

Very true, but this has nothing to do with the definition of the term "bullion". I've never seen a definition that restricts the phrase to something approved by the LBMA. Moreover, you can still hold allocated bullion that is not an asset of the holding institution whilst remaining in the system. The point being that it is (supposedly) there and you could remove it from the system if you felt like it and no one else has a claim on it.

Sovs and Kriggerands are defined as bullion by everyone, and they are only 90% pure.

For a list of definitions from the world's dictionaries:

http://www.taxfreegold.co.uk/bulliondefinition.html

Edited by Tiger Woods?

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  • 244 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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