– European Central Bank in effect tells euro-zone countries your gold is the ECB’s
by Francesco Canepa on Reuters
The European Central Bank needs to approve any operation in the foreign reserves of euro zone countries, including gold and large foreign currency holdings, the ECB’s President Mario Draghi said on Thursday.
“The ECB shall approve both the operations in foreign reserve assets remaining with the NCBs (national central banks)…and Member States’ transactions with their foreign exchange working balances above a certain threshold,” Draghi told two Italian members of the European Parliament.
“The purpose of this competence is to ensure consistency with the exchange rate and monetary policy of the Union.”
Editors note: This is an interesting and important story that should have been picked up more widely in Europe’s media and not solely on Reuters. The context is not given despite it being very important indeed.
The ECB and its President Mario Draghi realise gold is very important in terms of protecting the euro from collapsing both in terms of nations reverting to their national currencies but also in terms of the euro, dollar, pound and other fiat currencies collapsing in value, if the public loses faith in them.
The ECB President said of gold in October 2013 that gold is a “reserve of safety” that “gives you a value-protection against fluctuations against the dollar.” Draghi told an open forum at Harvard’s Kennedy School of Government, why central banks want gold and what value it offers. He said that there were “several reasons” to own gold including “risk diversification.”
The largest buyers of gold in 2018 were central banks and the largest holders of gold remain the U.S., the Bundesbank and other central banks in the indeed the IMF and the ECB itself.
Investors should prudently follow the lead of central banks internationally and gradually accumulate gold and dollar, euro or pound cost averaging into an allocated and segregated physical gold position.
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