GOLD 0.51% $1,391.7 gold futures

central banks buy gold, page-44

  1. 4,618 Posts.
    lightbulb Created with Sketch. 31
    That is intersting to note re: swiss franc and LIBOR.

    Let's get back to foundations of debt and the banking system. The creation of credit relies on fractional
    Banking. At some point an asset has to be collateralised to borrow money. LIBOR is almost zero now.
    Put another way banks are lending to each other without margin. This is happening to try and stimulate
    The movement of money.

    Backing interban loans is gold. Central banks are buying gold to use as collateral to underpin
    interbank loans. Previously banks used their gaurenteed income from interest earned as collateral for further
    Interbank lending.

    Gold lease rates are negative and will remain that way until debt becomes productive (ie debt can be serviced
    By real profit).

    So as long as borrowed money remains unproductive real profits will not be generated. Real profits are required
    To pay down debt. If debt is not paid down demand for borrowing decreases as does the velocity of money. Banks
    Can no longer lend on their profitable margins as they once did and can no longer service their loan obligations
    They buy gold to support further monetary expansion therby pushing up the price. Meanwile debt loads contue to expand
    Without abatement. Vicious cycle isn't it unless the banks that are too big to fall actually do fall

    GC
 
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