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The American Empire in a Changing World



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Friday, December 7, 2012

''Basel III Brings Gold Back''

From National Interest

''Just a few years ago, central banks were selling their gold. Between 1999 and 2002, Gordon Brown, then England’s chancellor of the exchequer, sold off 395 tonnes, half of the U.K.’s reserves. Between 2002 and 2009, the world’s central banks were net sellers of over 3,000 tonnes of gold.

But since 2010, central banks the world over have “turned on an Eagle” (to “coin” a new phrase), becoming huge net buyers of gold, buying back more than a thousand tonnes.

Why the turnaround, and at prices much higher than those at which the central banks sold? Because the rules have changed: The Basel Committee on Banking, the body that sets the standards followed by the industrialized world’s central banks (and the commercial banks they oversee), has reclassified gold bullion as a “tier one asset.''

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