ECB Doesn’t Rule Out “PIIGS” Gold as Collateral for Gold Backed Eurobonds, Sends Gold Soaring

Friday, September 2, 2011
By Paul Martin

by Tyler Durden
ZeroHedge.com
09/02/2011

Today, the President of the ECB, Jean- Claude Trichet did not rule out a gold backed euro bond in an interview with ‘Il Sole 24 Ore’ published on the ECB’s website.

The comments were a response to former Italian Prime Minister Romano Prodi who proposed – in Italian national daily business newspaper ‘Il Sole 24 Ore’ last week – the creation of a euro bond backed by member states’ gold reserves.

Prodi was President of the European Commission from 1999 to 2004.

Trichet was asked about “the creation of a fund guaranteed by the gold reserves of countries that would issue bonds to buy back national debt and make new investments.”

Trichet did not answer the question directly but said “at this stage, we have the EFSF bonds, which are bonds with a European signature. The main message of the ECB Governing Council to governments is to implement rapidly, fully, comprehensively the decisions taken by the European heads of state and government on 21 July.”

Reuters reported today in an article entitled ‘Gold sales would not solve Europe’s debt troubles’ that “Europe’s most indebted nations are under heavy pressure from their richer neighbours to sort out their finances, but they are unlikely to mimic the impoverished gentlefolk of old by selling off the family silver — or in their case, gold – to do so.”

Reuters recount how senior German lawmakers and politicians have advocated so called ‘PIIGS’ nations sell their gold to fund “bailouts”.

Reuters says that the “demands ignore the fact that this gold is not the property of the PIIGS’ governments to sell.”

The Rest…HERE

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