Germany Urges Portugal To Sell its Gold to Raise Cash

Perhaps Germany is finally starting to realize it will never see its gold held at the NY Fed ever again? Desperate to get their hands on some real money, senior German lawmakers are urging Portugal to sell its gold hoard in order to raise cash to ease its debt burden- likely in exchange for Germany’s agreement to the Portuguese bailout.
“Sure, we’ll print however many Euro’s you need- just give us all your gold!”

From Goldcore:

Senior German Lawmakers Urge Portuguese Gold Sale 
Another sign of the increased appreciation of gold as an important asset came from Germany today where Angela Merkel’s budget speaker and his opposition counterpart have urged Portugal to consider selling their gold.

Norbert Barthle, Germany’s governing coalition budget speaker and his counterpart Carsten Schneider from the Social Democrats, the biggest opposition party urged Portugal to consider selling some of its gold reserves to ease its debt problems. They called for a review of Portugal’s request for financial aid to include gold and other potential asset sales.

The German lawmakers did not specify who should buy the gold from the Portuguese central bank but given the challenges facing Germany and the Eurozone it is likely that the Bundebank and the ECB would be willing buyers – if the gold is not already encumbered due to Portugal’s membership of the Eurozone.

Interestingly, there was an article in the Times of London on Monday suggesting that the Portuguese gold reserves (worth some $20.7 billion at today’s prices) be used to fund their bailout (see news).

Meanwhile creditor nation central banks continue to accumulate gold reserves as seen with the breaking news from the Financial Times that the central bank of Mexico has been diversifying their currency reserves (largely in dollars) into gold with the purchase of 100 tonnes of gold bullion in February and March.

Debtor nations with large gold reserves may be forced to sell gold reserves to creditor nations in the coming years as has been the pattern throughout history.

Speak Your Mind