The 1997 Federal Reserve Piece that advocated Govt Gold Mobilization
"...governments can loan out all their remaining gold in each period. In the future when all gold now owned by private agents, whether above or below ground, has been used, governments sell in every period whatever gold is necessary to make the price be whatever it would have been if they had sold all their gold instantly. The quantity of gold available for private uses are the same...as with immediate sale. However, there is an important difference.....governments relinquish title to the gold in the future and then only gradually. Therefore, to the extent that government uses can be satisfied by owning gold but not physically possessing it, most if not all of the gains associate with maximizing welfare for private uses can be obtained with little or no reduction in welfare from government uses until sometime in the future."
federalreserve.gov
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P.S. ;-).......Wink Wink nod nod. Lease your gold now Mr. Central Banker. Because you still own it, nobody will have to know. Of course, in the future, when that gold is hanging around some peasant's neck, you'll have to sell so that the borrower doesn't get squeezed. But by that time, we'll all be floating around like the Jetsons and no one will care.
P.P.S. A plan, I suppose. But what if a central bank decides to take only half that advice, leases, but then doesn't sell? |
