Saturday, 27 August 2011

Gold confiscation?

Russian Central Bank To Offer Gold-Backed 
Loans (Or Why The Spam-Standard Is 
Coming To An End)  
08/26/2011 15:41 -0400


The spam standard is ending. 

In news that is likely about to throw the mouth-foaming Keynesians in for a perpetual loop, the Russian Central Bank has quietly announced the sneakiest gold confiscation ploy in history. 


Reuters reports: "Russia's central bank will offer gold-backed loans for up to 90 days at an interest rate of 7 percent, it said in a statement on Friday, expanding its lending facilities for dealing with any future liquidity crunch in the banking system.

So let's get this straight: Russia, which has been dumping US bonds with unseen vigor, and which has been buying gold at a record pace, has just offered its citizen the once in a lifetime opportunity to trade in their hard assets for paper in an imploding fiat system, but with promises to make 7% worthless percent. 

Oh, and when the "liquidity crunch in the banking system" goes away and one hopes to reclaim title to their gold, one will just find that the title certificate was signed by one Linda Greenova, and said title is perpetually lost in Siberian limbo. 

And while one waits to reclaim said title from robosigning transgressor #1, Bank of USSR, those heavily armed gentlemen in camouflage attire who just broke into your apartment will not wait to reclaim what now rightfully belongs to mother Russia.

More:

The gold-backed lending was approved by the board of directors at a meeting on Friday. The rate on the facility is in line with the central bank's Lombard rate on borrowing secured against high-quality bonds.

"This measure fits the central bank's policy of developing refinancing instruments within the banking system. The facility will be unlikely in strong demand, only at times of liquidity crunches," said Maxim Oreshkin, chief economist at Credit Agricole in Moscow.


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