- Turk – Central Banks Now Scrambling For Physical Gold !
Today James Turk told King World News, “… we have seen an ongoing scramble to turn paper-gold into physical metal. But here’s the important point, this scramble for physical metal has grown because it has now moved from the hedge fund community to central banks.”
Here is what Turk had to say: “The situation concerning Germany’s gold reserves is receiving increasing attention, Eric, which is a good thing because gold reserves are one of the pillars underlying any country’s sovereignty.”
“One could argue that under the gold standard, which was in place until 1971, it made practical sense for a country to store some of its gold with the central banks of its major trading partners. That’s because the gold was used to settle trade imbalances, which was accomplished by moving gold within a central bank’s vault from the payer’s cubicle to that of the payee. But that rationale for foreign storage disappeared in 1971 when the gold standard was abandoned and a policy of global fiat currency was introduced. Now trade balances are settled with accounting entries on a central bank’s computer….