The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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From: RJA_	10/8/2008 12:35:47 AM
	1 Recommendation of 71474

From the email inbox: Bullion lending by central banks all but dries up By Javier Blas in London , Financial Times, 7 Oct 2008 Central banks have all but stopped lending gold to commercial and investment banks and other participants in the precious metals market, in a move that on Tuesday sent the cost of borrowing bullion for one-month to more than twenty times its usual level. The one-month gold lease rate rocketed to 2.649 per cent, its highest level since May 2001 and significantly above its five-year average of 0.12 per cent, according to data from the London Bullion Market Association. Gold lease rates for two, three and six months and for a year also jumped to levels not seen in the last seven years. Traders said the jump reflects the fact that central banks – mostly European – have almost completely stopped lending gold in the last few days and are not rolling forward old leases after maturity. This is because of fears that some borrowers might not repay their bullion loans if they are engulfed by the financial crisis. (Sorry if this has previously been posted)

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