It was very brief, however something is up, and it is consistent with want I've been posting here the last month. This came out from the World Council today. Although they beat around the bush, I can tell you what the real issue is with CB's. THEY NOW KNOW THAT PUTTING THEIR THEIR GOLD AT RISK FOR 1% RETURNS IS A GOD AWFUL DEAL!
"According to usually reliable market sources, the Bank of England has not
been lending gold over the past few days. This is unprecedented as its
short-term lending is considered a vital tool in the smooth running of the
London market. The Bank's explanation for this ( confidentially ) is that
many client central banks had lent out for longer periods than normal around
the WAG period, and that as the loans matured they were not being renewed,
creating a temporary tightness in liquidity. The market is regarding this
explanation with some suspicion, however, suspecting that more may be
involved.
"It has indeed been suggested that another joint central bank move on gold
lending may be imminent, cutting the amount of gold available for lending.
We have no firm evidence for such a move. However, if this were to happen,
then lease rates would soar; non-WAG countries have increased their lending
substantially in recent months and it is unlikely that they could fill any
liquidity gap produced. In these circumstances, a price spike could easily
develop; shorts would be quick to cover while other borrowers would be
forced to buy as the rolling over of existing loans became more difficult to
achieve." |
