Europeans may have to sell their gold

By Jeremy Holcombe
Contributing writer for Goldco Direct and End the Lie

There have been many options thrown out to some of the major European countries that are in financial crisis on ways to help ease their debt pain so they don’t have to go into bankruptcy.

Believe it or not, the latest suggestion/conclusion may be for countries such as Italy and France, as well as a few others, to sell their gold stockpiles to cover their bills.

What? Yes, that’s right, these countries may sell their gold to cover their debt bills. The best part is, they have enough to do it.

Most people don’t know this fact, but Italy holds the world’s fourth biggest stockpile of gold. With a massive holding of 2,452 tonnes, Italy has more gold than France, and twice as much as China.

To put that in perspective, in 2011 China started using its cash to buy gold and silver to become a major player in the precious metals market. While they have a ton of gold, it is still much less than the much smaller Italy. Only the United States, Germany and the International Monetary Fund (IMF) have more gold.

So with this being said, will Italy and some other countries sell their gold stockpile to cover their massive debts? Well, many insiders think that they already have. Lets take a look at why some people think this.

Italy has enough gold to hold a street value of $123 billion. They are $80 billion in debt this year, so they are easily covered if they do this.

Portugal has $19 billion in gold stashed away, and they are only $13 billion in debt, so they are covered.

Finally, France has roughly $122 billion in gold, which would make a huge dent in the $150 billion they owe. Yes, this would tap them out as far as gold goes, but probably only for a bit.

It seems as though these countries should have already gone under, sending the rest of the financial world (including the United States) with them. Yet, they are still holding on.

Could it be that there is already a deal in place with someone to buy all this gold and relieve the financial pressure of these countries?

Who Could be the Buyer?

This is an interesting question. It could be the United States or Germany, which, along with Italy and the Netherlands hold 60%-80% of the gold reserves in the world.

However, my dark horse in China. As stated above, China has opened its doors earlier this year to start buying and selling gold to become a major financial player in the precious metals arena.

Yes, their credit is poor and at first glance they seem poor, but in reality, China has cold hard cash, and we all know cash is king.

How much do they have? China has a reserve of over $3 trillion ready for whatever purchases they want to make. Bailing these countries out, while gaining a huge portion of gold is not out of the question.

The above article is for informational purposes only and is not a solicitation by End the Lie or Goldco Direct.  It is the commentator’s opinion only and not intended for investment recommendations, and does not necessarily reflect the views of End the Lie or Goldco Direct.  Any references to outside sources are believed to be accurate.  Past performance is not a guarantee of future results.  All commodities involve risk. Investors should consult their financial advisor before making any investment decisions.

One Response to Europeans may have to sell their gold

  1. Anonymous December 21, 2011 at 1:16 PM

    On November 9, 2011, Max Keiser gave his opinion that China would come to the aid of Italy in exchange for Italy’s gold. Mr. Keiser said that Italy will pre-empt the IMF and do the deal with China. He also said that it would happen within the week. Either it has already occurred and is being kept secret, or Max’s prediction was somewhat off in terms of time-frame. It is well known that for years China has been on a world-wide resource-buying binge. Europe’s debt-ridden rulers will have no problem selling their black souls and the souls of their innocent countrymen to China.

    Reply

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