Wednesday, March 13, 2013

Turkey's Banking System Begins to Use Gold as Money

Kitco interviews Jeff Christian, who reports that the Turkish central bank now allows its commercial banks to use gold as reserves for deposits, and about 7% of deposits in Turkish banks are backed by gold. Christian believes that other countries will imitate Turkey's move, which he describes as pure genius. Christian is a modest gold bear, predicting a $1540 bottom over the next two years. It seems to me that if banking systems begin to imitate Turkey, monetary demand for gold will be a bullish factor. Christian also predicts a move away from the dollar as banking systems embark on a multicurrency regime.  Over the long run the dollar will slide.  This is going to devastate Social Security and pension payments, leading to a meager old age for the baby boom generation.