A golden idea to save (or doom) the euro - will Europeans Fall for It? - *video*Submitted by Charleston Voice on Sat, 06/09/2012 - 16:12
17:25 EST Friday, Jun 08, 2012
ROME — Gold is back in the news, big time, and not just because the price may be on the verge of another upswing or that Peter Munk is turning Barrick, the world's biggest gold company, into a CEO meat grinder. It's because Germany, it appears, wants to make gold the effective currency of the euro zone before the region plunges to the bottom of the seas like a concrete U-boat.
The weakest euro zone countries are tapped out financially and economically. But a few of them are brimming with gold reserves. Take Italy, the euro zone's third-largest economy.
The Italians love gold and it?s stashed everywhere, in their central bank and in their jewellery and safe deposit boxes. (I once saw a religious-festival parade of children in a mountain town, with each child groaning under the weight of heavy gold necklaces and other baubles). At last count, the central bank had 2,451 tonnes of gold, valued at close to US100-billion ($128-billion). That's not a fortune compared to Italy's 1.9-trillion national debt, but it?s not bad when Rome is raiding the pantry to pay its ever-rising debt.
Germany?s idea is coyly named the European Redemption Pact and it is nothing if not creative. While details are scant, here is roughly how this gilded baby would work.