GOLD BACKED BONDS – AN ALTERNATIVE TO EUROPEAN AUSTERITY?

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The World Gold Council and leading academics and international think tanks believe that using a portion of a nation’s gold reserves to back sovereign debt would lower sovereign debt yields and give some of the Eurozone’s most distressed countries time to work on economic reform and recovery.

According to research done by the World Gold Council using the European gold reserves as collateral for new sovereign debt issues would mean that without selling an ounce of gold, Eurozone countries could raise €413 billion. This is over 20% of Italy’s and Portugal’s two year borrowing requirements.  

The move to back sovereign bonds with gold would lower sovereign debt yields, without increasing inflation, which would help to calm markets. This should give European countries some vital breathing space to work on economic reform and recovery. 

Some citizens would be concerned that there may be a risk that the sovereign nations who pledge their gold as collateral could ultimately end up losing their gold reserves to the ECB, or whoever the collateral of the gold reserves are pledged to, in the event of a default. (Doc’s note: Bingo!- banksters plan)

Unlike currency debasement and the printing and electronic creation of money to buy sovereign debt, under schemes such as Draghi’s “outright monetary transactions” (OMT), the use of gold as collateral would not create fiscal transfers between Eurozone members, long term inflation or currency devaluation risk.

Silver Doctors – JANUARY 25, 2013 BY 

http://www.MissionMining.com 

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