A few days ago, Erste Bank shared the following spot on description of gold's function in the modern monetary system: "The possession of gold is tantamount to pure ownership without liabilities. This also explains why it does not pay any ongoing interest: it does not contain any counterpart risk. Along with the International Exchange and the Chicago Mercantile Exchange, JPMorgan now also accepts gold as collateral. The European Commission for Economic and Monetary Affairs has also decided to accept the gold reserves of its member states as additionally lodged collateral. We also regard the most recent initiatives in Utah and in numerous other States as well as in Malaysia, and the planned remonaterisation of silver in Mexico as a clear sign of the times. The foundation of a return to “sound money” seems to have been laid." Today, we get a quick reminder of this all too often forgotten truth, after gold has surged.
http://www.zerohedge.com/article/gold-surges-reminder-it-only-currency-without-liability-and-counterparty-risk
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