December 18, 2012 | By Tekoa Da Silva
As indicated by the World Gold Council in a new gold campaign, the Euro Zone collectively owns over 10,000 tonnes of gold, worth over €458B ($602B). By using the gold as collateral for new sovereign debt issues, the WGC indicates that over €413B could be raised, as lower than current Euro Zone yields(due to the lower inherent risk), and without increasing inflation.
What are your thoughts? A good solution to bring back fiscal discipline?
If the issuing countries defaulted on the bond coupons/payments…would that mean gold-backed bonds could be used as a tool for large pools of private capital to access sovereign gold hoards? (ie. country defaults and bondholders take possession of said gold-backing)