SaturnV,
"Central banks buy up gold with freshly printed dollars/Euros from those currently holding shedloads of it. And, just by coincidence, these holders of bullion hold the other side of debt obligations that can't be repaid."
The problem with this idea is the misplaced notion that "holders of bullion hold the other side of the debt obligations." They don't. Even if they did, that is no reason for central banks to buy gold. It would be more logical for them the print dollars/Euros and repay the dollar/Euro bondholders in the currency inwhich the debt is denominated. I am not aware of any government debt in any jurisdiction that is denominated in Gold.
(Where do these stupid ideas come from?)
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who is attacking italy's bonds? , page-26
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