Precious Metals Will Go thru Roof - Basel III With gold being of a value far in excess of its price in the monetary system –as seen in its use as collateral via the Bank of International Settlements currency/gold swaps of the last few years— and with gold soon to become a level 1 asset on bank balance sheets, the demand for physical gold from the banking system as well as from emerging world central banks is set to rise tremendously and soon. The Basel III discussions allow for this to happen any time between 1 January 2013 and 1 January 2015. If gold is re-rated to a level I asset, as is proposed by Basel III (U.S. bankers are in on the discussions) then there is not enough readily-available gold to provide both the central banks of the world and the banking system with sufficient for gold to play this role.
Basel III And Gold
https://seekingalpha.com/article/1016161-basel-iii-and-gold
The most significant change is moving gold from its tier 3 status to tier 1 capital as 100% loan-backing reserves, the same as cash and bonds. For the first time in 42 years, gold is being brought back into our financial system as money. All the world's banks are now storing this metal, not as some 3rd rate "asset," but as all the world's working capital - its money.
Washington's lack of fiscal discipline is again an issue, and we are now being forced to recognize gold as official money again.
You probably were not aware of any kind of return to gold as official money, but these Basel III rules are set to go into effect January 1, 2013 and have prompted Brian Hicks to call it "The Secret Return to the Gold Standard
"In what might be the most under-reported financial story of the year" we are seeing an "important step in the re-monetization of gold." Reuters, he says, has quietly reported that "Banks are already preparing for the full implementation of gold's dominance as the new first class security for banking."