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Are The Central Banks Running A Fractional Gold System?

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This is a really interesting article about how the Bank of International Settlements started and how it operates today.

http://www.financeandeconomics.org/Articles%20archive/2010.12.16%20BIS.htm

Unfortunately, the consequences of this "fractional gold system" - if true, could be the trigger to total collapse of paper money!

Ramper!

invasion-of-the-body-snatchers-78.jpg

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This is a really interesting article about how the Bank of International Settlements started and how it operates today.

http://www.financeandeconomics.org/Articles%20archive/2010.12.16%20BIS.htm

Unfortunately, the consequences of this "fractional gold system" - if true, could be the trigger to total collapse of paper money!

Fiat currency isn't backed by anything other than the diktat of the sovereign issuer , that's the whole point of having a fiat currency in the first place. Much more open to manipulation and therefore a lot easier for the banksters to cream off a goodly percentage of other peoples' production or for governments to obfuscate their debt.

Although the discovery that a nation's gold reserves weren't quite what they were claiming would undoubtedly hit their currency's value hard on the foreign exchange market.

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No really, it's great news and probably the number one reason for owning gold.

Apparently a customer recently had a big problem getting a tonne of his gold out of a Swiss bank who had been storing it for him since 1990. Which bank and customer remains a mystery, as he had to pursue legal action after they tried to palm him off with cash. In the end he got his gold, but instead of getting it immediately he had to wait 3 weeks (while the bank scurried around finding a tonne to give him no doubt). Story was from Zerohedge.

When the fact that 100 paper pieces of gold have been sold for every real ounce is out in the open once enough worried investors call time and ask for delivery of their metal, the price of the real stuff will explode like a nuclear bomb.

Edited by General Congreve

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Although the discovery that a nation's gold reserves weren't quite what they were claiming would undoubtedly hit their currency's value hard on the foreign exchange market.

Hit all currencies, all central banks, all credibility.

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Apparently a customer recently had a big problem getting a tonne of his gold out of a Swiss bank who had been storing it for him since 1990. Which bank and customer remains a mystery, as he had to pursue legal action after they tried to palm him off with cash. In the end he got his gold, but instead of getting it immediately he had to wait 3 weeks (while the bank scurried around finding a tonne to give him no doubt). Story was from Zerohedge.

I'd be interested to learn more ... it's bad enough that 'cash in the bank' is nothing of the sort (but at least anyone with a bit of banking knowledge knows about that) but things are pretty bad when you can't trust them to store your physical gold in their vaults.

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Unfortunately, the consequences of this "fractional gold system" - if true, could be the trigger to total collapse of paper money!

We will all understand "what is real and who is real"!

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When the fact that 100 paper pieces of gold have been sold for every real ounce is out in the open once enough worried investors call time and ask for delivery of their metal, the price of the real stuff will explode like a nuclear bomb.

Or alternatively they decide they have nowhere to store said gold and decide on a different class of asset.

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Found a link to the Swiss Bank/Gold story ....

Business Insider

:ph34r:

Very worrying indeed. Even Harry Potter had access to his Gold.

Talking of HP, it's ironic that his 'deposit' at the bank was all in Gold. I didn't see any piles of worthless paper anywhere in his vault :lol:

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Plenty of people have pieces of paper which they believe offers proof that they own gold stored somewhere.

Mugs.

I've been pointing this out for ages. Unless you actually ask for the physical gold, the bank never need to handle any.

They just sell it to you at one price and buy it back at another... both are cash transactions, no gold involved.

Chances are, 99% of the gold doesn't actually exist. Remember, if a bank is storing something for you, like gold, there will be a large annual fee, probably upwards of 3% to cover the actual storage costs. If it's a measuable item like gold, where you'll expect them to insure it, it's probably closer to 5%. If you arn't paying an annual fee, you've probably bought gold futures.

I expect most of these gold companies, especially the longer-standing ones exposed to the way gold has trippled in recent year, will be wiped out if people start asking for either their gold OR their money back at current prices.

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Or alternatively they decide they have nowhere to store said gold and decide on a different class of asset.

Yes, of course, they'll abandon their rapidly appreciating gold and buy houses, I'm sure of it. :lol:

If it really is 100-1 anyone who has enough gold that they need seriously secure storage could afford to build their own vault when this goes t1ts. Besides, it'll be more a case of which individuals and institutions have the real deal and which are left holding the paper. The prudent and the lucky will be laughing all the way to their new vaults.

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Of course there is some "fractional reserve" gold banking. But this is FRAUD, even if the bankers sometimes get away with it. If you charge storage and insurance, and are found not to have the gold, then the likelihood of being found out is high (I think one of the crooked banks actually admitted it in a court, I'll look for the link in a bit) but fractional reserve banking with FRNs is the actual legal nature of the beast.

Long-time readers of this forum will remember the discussions as to why it is utterly silly to trust any safe deposit vault (with a very-maybe exception of Switzerland or Austria). I can't understand why a multi-millionaire (a tonne of gold is roughly 28.25 million GBP) would do anything other than build his own vault and pay an alarm company to monitor it. That just has to be cheaper long-term than insurance charges.

What's the vault for Mr Rich Chinese? My wife is a little fearful, and fancied a Panic Room, Mr Round-eye Builder-Person. You know how it pays to accommodate women's wishes? Yeah, tell me about it. I'll order the door today, Mr Rich Chinese.

I hear that all homes in Switzerland have to have a bomb-shelter anyway...

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In HK a company simply renovated and threw out the old safe deposit boxes.

They negelected to check the contents and ask the people who had them before disposal.

As expected people have little faith in such safe deposit boxes and instead turn their homes into fortresses. My dad's old HK home has 3 locks on the front door which then opens to another huge steel reinforced door which again has 3 locks on it.

Easier to go through the wall.

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  • 284 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% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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