heads the US wins, tails, you lose, game.
We want our gold back.
Apparently the UK is willing to cover all bank
losses from infinite re-hypothecation, as Brown did
in the Brown's Bottom Show. He covered the banks
when the evil Germans decided to ask for their gold
back.
I wonder why they don't trust those Brit re-hypothecators.
I would. pfffffffft
Just because the UK government lost money, prestige and gold
doesn't mean that the banks learned their lesson. If the re-hypo
laws were not changed, that means the UK wants the banks
to stack up their gambling so that they're too big to fail.
checkit: Zerohedge
It Begins: Ecuador Demands Repatriation Of One Third Of Its Gold
Holdings
One week
ago, when we reported the news that the Bundesbank had secretly pulled
two thirds of its gold from London years ago, we said the following:
...
Germany has done nothing wrong! It simply demanded a reclamation of what is
rightfully Germany's to demand.
And here
is the crux of the issue: in a globalized system, in which every sovereign is
increasingly subjugated to the credit-creating power of the globalized
"whole", one must leave all thoughts of sovereign independence at the
door and embrace the "new world order." After all this is the only
way that the globalized system can create the shadow cloud of infinite repo-able
liabilities, in which we currently all float light as a binary feather, which
permits instantaneous capital flows and monetary fungibility, and which guarantees that there will be no sovereign
bond issue failure as long as nobody
dares to defect from the system in which all collateral is cross pledged and ultra-rehypothecated...
for the greater good. Until the Buba secretly defected that is.
And
this is the whole story. Because by doing what it has every right to do, the
German Central Bank implicitly broke the cardinal rule of true modern monetary
system (never to be confused with that socialist acronym fad MMT, MMR or some
such comparable mumbo-jumbo). And the rule is that a sovereign can never put
its own people above the global corporatist-cum-banking oligarchy, which needs
to have access to all hard (and otherwise) assets at any given moment, on a
moment's notice, as the system's explicit leverage at last check inclusive of
the nearly $1 quadrillion in
derivatives, is about 20 times greater than global GDP. This also happens to be
the reason why the entire world is always at most a few keystrokes away from a
complete monetary (and trade)
paralysis, as the
Lehman aftermath and the Reserve Fund breaking the buck so aptly showed.
We
are confident that little if anything will be made of the Buba's action, because
dwelling on it too much may expose just who the first country will be (or
already has been) when the tide finally breaks, and when it will be every
sovereign for themselves. Because at that point, which will come
eventually, not only Buba, but every other bank, corporation, and
individual will scramble to recover their own gold located in some vault in
London, New York, or Paris, or at your friendly bank vault down the street, and
instead will merely find a recently emptied storage room with humorously
written I.O.U. letters in the place of 1 kilo gold bricks.
It
appears that the story, which has refused to go away, was not covered
sufficiently fast, and precisely the worst case scenario - at least for the
"asset-lite" status quo - is slowly but surely starting to
materialize. From Bloomberg:
Ecuador’s
government wants the nation’s banks to repatriate about one third of their foreign
holdings to support national growth, the head of the country’s tax agency said.
Carlos
Carrasco, director of the tax agency known as the SRI, said today that
Ecuador’s lenders could repatriate about $1.7 billion and still fulfill
obligations to international clients. Carrasco spoke at a congressional hearing
in Quito on a government proposal to raise taxes on banks to finance cash
subsidies to the South American nation’s poor.
So
yesterday: Germany... today: Ecuador... tomorrow: the World?
Because
while Ecuador, with its 26.3 tonnes of gold, may be small in the grand scheme
of gold things, all it takes is for more and more banks to join the bandwagon
and demand delivery in kind from official repositories (i.e., New York and
London), and the myth that is the overcollateralization of hard money by central banks will
promptly come to an abrupt, bitter and, likely, quite violent end.
