The long-term “irreversible” trends continue to develop. Many of the trends, such as debt creation and the movement away from the U.S. dollar, are accelerating and their consequences are appearing globally.
"Given the business cycle is in the 'recovery' stage, investors lack a reason to increase their exposure to gold at present," says a note from Bank of America Merrill Lynch, which today cut its 2013 gold forecast by $10 an ounce to $1,670.
Global investors had to muster the courage to keep calm as news of Cyprus’ proposed partial theft of all bank deposits took Wall Street by surprise, closed the country’s banks and drove the price of gold higher.
The BIS and BCBS are two regulatory bodies play a considerably important role in the development of international banking supervisory standards. And, as it happens, they also put forward propositions on how gold is to be seen by the banks.
If global banks’ are realistically going to improve their balance sheet diversification and liquidity profiles, gold will have to be part of that process. It is ludicrous to expect banking to regain a sure footing through the increased ownership of government securities.
"The crash has laid bare many unpleasant truths about the United States. One of the most alarming is that the finance industry has effectively captured our government," writes Simon Johnson, a chief economist with...