Some call gold archaic and outmoded, however, the world’s central banking system sees it otherwise. The world’s central banks use gold in roles ranging from a guarantee to a “fractional”, to full payment of a debt. Fractionals are when a bank demands just a “fraction” of the total amount now and the rest later, the transaction commencing when the fraction is delivered – similar to how a home mortgage works in the US.
Yet many of these transactions are not discussed publicly, even when they involve rather huge amounts. Today’s featured article is a primer on how gold is actually used in the world markets, with several well-publicized examples when gold quite literally saved the day.
Yes, some other asset could have been used, but the fact that the IMF and other world banks “go for the gold” when things get difficult tells just how important it is. Read all about it in today’s featured article.
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