Tag Archives: european banks

Stacy Summary:   Unbelievable, truly unbelievable.  Wonder why the BIS is taking the gold as collateral from the European banks rather than just a paper promise?  Don’t the BIS know they can’t eat gold?

European commercial banks have begun using their holdings of gold to raise cash with the Bank for International Settlements, in a further sign of strains in the money markets on which many rely for funding.

The BIS, the so-called “central banks’ central bank”, took 346 tonnes of gold in exchange for foreign currency in “swap operations” in the financial year to March 31, according to a note in its latest annual report.

In a gold swap, one counterparty, in this case a bank, sells its gold to the other, in this case the BIS, with an agreement to buy it back at a later date.

In the past the BIS has occasionally engaged in gold swaps.

There has been no mention, though, of any such operation in recent years.

. . . .

The BIS annual report says the gold received in the swaps was held “at central banks”.

The swaps are being blamed for gold crashing as seen in this gold chart: