This position is in partnership with Worldcrunch, a new global news site translated stories of note in foreign languages in English. The following article was published in Die Welt.
The first thing that insolvent private person is forced to is waive the silver family. But other rules seem to apply to the Governments. If they have lived beyond their means for a few years or decades, some countries hold on tight to their credit, declare unable to repay their debts and to turn to other countries for help.
The European Union (EU) has seen many example. For now, the Greece is in negotiations with the troika EU-European Bank Central-International Monetary Fund for a new rescue plan - all Athens sits on an impressive four-million-ounce (125 U.S. tons) cache of gold, which could carry four large trucks, fully loaded.
Brilliant in the Greek National Bank coffers are EUR 4 billion. If Athens were selling only gold, the Greek State would be theoretically capable of at least part of the due debt payments soon without any outside assistance. (Read how the economic crisis of the Greece is threatening the Euro).
Another country in crisis, Portugal, also holds significant amounts of precious metals, dating back to the time of the regime of Ant?nio de Oliveira Salazar. Instead of using, Lisbon could converted value of the euro for its 13 billion dollars in liquid gold.
Nick Moore, chief strategist of commodities to the Royal Bank of Scotland (RBS) in London, reported that a question often asked by clients of the Bank is why these Governments do not sell some of their gold. After all, it is recognized worldwide as an asset that can be sold even in difficult economic times. Gold in the central banks of the members of the euro area is some 375 billion euros.
With that, 4.5% euro EUR 8.3 billion public debt could be paid in one fell swoop. Its debt, the Portugal is particularly rich in gold. Lisbon could bring 383 tonnes on the market and at the current rate, to EUR 13.3 billion.
The problem is particularly unstable because the Portuguese pressed just a program of 80 billion euros from the European Union. The reason given for the application of the aid was that the country would not be fair conditions of capital markets, but he needed money to repay outstanding loans. With the money they have are derived from the sale of gold, they would have been able to repay a large part of an older debt that they have been carrying which is due this year.
In comparison with the rest of Europe, Lisbon is disproportionate accumulation of large amounts of gold. No other country has as much precious metal in their foreign currency reserves. In the Euro for the first years, the National Bank is shy on the sale, the reducing its gold reserves of 20 to 12 million ounces and raising liquidity of approximately 2.8 billion euros. (Photos: see the events in Athens.)
But Portugal stopped selling in 2007 and it was the Greece. At the beginning of the new millennium, Greeks sold large quantities of metal, but when the crisis strikes, they left intact supplies and the Europeans for help.
This cannot, however, be entirely due to the lack of will on the Government to use their gold reserves to repay the debt. There are institutional barriers: Ministers of finance have no direct access to gold reserves. Central banks are independent institutions not subject to the orders of the Government - a requirement of contracts monetary union European. Yet, these same contracts contain other passages that Europeans were not met, as the Article 125, known as the "no clause bailout." "
Article 123 prohibited funding for the budgets of the State through the European Central Bank, but de facto happened when the ECB buy Greek bonds in May 2010. Then there is Article 126, which governs the policy to deal with excessive deficits in the Member States. These procedures were invoked pro forma but never actively implemented. Before the financial crisis, 13 cases have been opened and closed.
There is an excellent opportunity to put the gold on the market today. The price of the precious metal is just below Records. It is also quite latitude with respect to the Washington Central Bank Gold Agreement (CBGA), a number of central banks is signatory, agreeing not to bring more than a specific amount of metal on the market each year.
To 400 tonnes allowed, only 53 tonnes were sold during this accounting period, whose 52 tons of reserves of the Monetary Fund International. If central banks want to sell under the agreement, they are free to do so until 26 September, when sales quotas expire. Several central banks around the world are doing just the opposite and yet continues to be stored.
To Worldcrunch:
Exhibition of Iranian Art in Israel Sparks controversy
-Haaretz
Are attacks of NATO in Libya all about oil?
-The world
When the Euro area is divided into two: here is the "Nordeuro".
-Die Welt
Photos: protesters entrent in conflict with the police.
Our tragedy Greek.
See this article on Time.com
Most popular on Time.com:
No comments:
Post a Comment