Who lent 380 tonnes of gold to the BIS?
From the Telegraph:
It takes a lot to spook the solid old gold market. But when it emerged last week that one or more banks had lent 380 tonnes of gold to the Bank of International Settlements in return for foreign currencies, there was widespread surprise and confusion.
In a tiny footnote in its annual report, the bank disclosed its unusually large holding of gold, compared with nothing the year before. The disclosure was a large factor in the correction of the gold price this week, which fell below $1,200 for the first time in more than a month.
According to the World Gold Council, central banks in Greece, Spain and Portugal held 112.2, 281.6 and 382.5 tons of gold respectively in June. The only other potential monetary authorities with enough gold are the US, China, Switzerland, Japan, Russia, India and Taiwan – and the International Monetary Fund. This led to musings that the counterparty was the IMF, making sense because the lender of last resort is historically prone to cash shortages and has been quietly selling off gold in the first half of the year.
The day after original reports about the swaps, BIS emailed a statement saying that the swaps had not been conducted with monetary authorities but purely with commercial banks. In this case, one or more of the so-called bullion banks – which act as wholesale market-makers and include Goldman Sachs, Deutsche Bank, JP Morgan, HSBC, Barclays, UBS, Societe Generale, Mitsui and the Bank of Nova Scotia – would have agreed to act on behalf of a monetary authority.
This would add an extra layer of anonymity. “So the BIS swaps look like a tripartite transaction,” writes Adrian Douglas of the Gold Anti-Trust Association. “The commercial bank or banks made a swap with a central bank or banks and then the commercial bank or banks made a swap with the BIS.”
What does the IMF know that we don’t? Are they funding their share of the European Community bailout fund, or preparing for a new one (say, Britain)?
Now I know what ‘IMF’ means: ‘Idiot mother …’ Oh, never mind!
Oh come on MachineHead, don’t leave me hanging and trying to guess at the F-word that you have in mind is…..
Fruitcakes. Yeah, that’s it — fruitcakes.
[delete double post]
Wow! That sounds like really big news. What does this mean, though, for the gold market , in the near term (if anything)…. do you think?
Alright, I’ll confess, it was me. You got me, guys.
I had to find something to do with my Tungsten. Everybody is buying those damn energy efficient light bulbs now.
Did anyone check for a Tungsten underbelly?
Yes. Analysis revealed that it’s made of tungsten cowhide and crapalloy.
Perhaps they’re lending it to Audi…