gold now a tier 1 asset

IDC holders,

Have come across the following article whewre the Basel Comittee have ruled that gold is now a tier 1 asset.

Up until now Gold Bullion has been only been considered a Tier 3 asset, which means if you were a Bank and had $10Billion worth of gold bullion and you needed to make a payment to another Bank of $10Billion, only 50% of it would be considered as collateral, eg $5Billion. You would have to find another $5Billion from somewhere else, Cash or AAA Govt Bond.

Or if a Bank needs to leverage the assets they have to increase lending, they can now use Gold Bullion to do so, as they do Bonds and Cash. In the past it was only worth half the value of Bonds of Cash.

Based on this last nights decision, gold bullion is now a Tier 1 Asset once Basel III comes into effect on the 1st of January 2013.....$10Billion worth of Gold will be worth $10Billion worth of cash, thereby doubling the value of gold held by Nation’s Central Banks.

It's been widely mooted on this forum and other gold stocks that Gold is the foundation of every Financial System in the world, especially after a Financial Crisis where money is being printed continuously.

For all IDC holders this means the SP will only benefit as we pass milestone events in the coming weeks.


http://www.wealthdaily.com/articles/the-new-rules-for-gold/3709