Secret gold swap has spooked the market

Telegraph (UK) ^ | 6:10PM BST 11 Jul 2010 | By Garry White and Rowena Mason

[DeaconBenjamin]

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

* * *

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 – leading analysts to point fingers at Portugal, or a combination of the three.

But an analyst from UBS noted that eurozone central banks would be severely limited by the influx of extra cash – unable to transfer it straight to governments or make use of the primary bond markets.

She then listed the only other potential monetary authorities with enough gold as the US, China, Switzerland, Japan, Russia, India and Taiwan – and the International Monetary Fund.

* * *

However, 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.

This did nothing to quell the sense of mystery surrounding the deal or deals. It is almost inconceivable that a single commercial bank could have accumulated so much gold alone....

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.

[camerongood210]

Could Soros be behind this?

[ButThreeLeftsDo]

You Know The Drill
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Hey! FReepers!
Help Fill The Tank!
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It Ain't Askin' Too Much
Ya Know....

[greeneyes]

Soros, and/or Goldman Sachs would be my guess.

[garjog]

[VanShuyten]

I don’t understand. What is this all about? Do private banks now own the gold that national governments had? Is there some kind of secret swap going on? Someone explain what this is all about, please.