From the thread of my second favourite gold stock at current prices-
Tier 1 status for Gold is approaching, Gold currently holds Tier 3 status which means only 50% of its value can be credited to the banks required Tier 1 holding requirement , January 2013 is when it starts officially.
Banks have been big buyers of Gold of recent and for good reason. Rumours are always around of banks suppressing the price of Gold , true or false the common man will never know . I wonder what will happen to the POG when its value effectively doubles to the bank from 50% to 100% will these rumours of suppression be a distant memory in the past ?
I have copied a piece from each article, the full articles are worth reading.
http://stratrisks.com/geostrat/6732
Something’s afoot in the world of high stakes finance.
The Basel Committee for Bank Supervision (BCBS) is about to decide something crucial to bankers, sovereign nations, and gold investors alike.
As part of the Bank of International Settlements (BIS), the BCBS is reviewing the upcoming new Basel III rules. That may sound arcane to you but I promise it is not. Though rarely discussed in the mainstream press, the all-important Bank of International Settlements is essentially a global central bank to the world’s central banks. Its goal is ostensibly to provide global stability to the monetary and financial systems.
In a surprise twist that only a few years ago would have been considered preposterous, the BCBS is entertaining whether gold should qualify as a full-fledged Tier 1 capital asset. Currently, the precious metal is relinquished to a Tier 3 status, deserving no more than a 50% weighting at that.
Here’s why that distinction is important and potentially astonishing.
Achieving Tier 1 status would credit gold with the recognition it’s been denied ever since Nixon closed the gold window on August 15, 1971.
In essence, it would mark the official recognition that gold is real money. But that’s not the only reason gold is gaining respect. Other factors are brewing that will set the stage for the next leg up in gold prices
Gold as Tier 1 This is why the crafters of Basel III added a paragraph or two reranking gold as a Tier 1 asset. In the past, the yellow metal was ranked as a Tier 3 asset. When Basel III is implemented, gold will go from being counted as being worth 50% of a Tier 1 asset to being worth 100%. In other words, if a bank wanted to hold its required 7% of capital as gold, it could. (In the past, it would have had to hold twice as much.) This means that after Basel III gets accepted sometime after January 1, 2013, gold will become more valuable to banks... And as gold increases in price while cash, T-bills, and mortgages are falling or stagnant, the desirability to own gold by major institutions will soar. This is the most significant thing to happen to gold since Nixon took the United States off the gold standard 40 years ago. Perhaps because it has to do with the complex world of banking, very few people are talking about it... You won't see it on the national news. But know this: Gold will become a lot dearer over the next year. All the best,
