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Turkey Once Again Proves That Gold Is First And Foremost Money

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Zero Hedge
March 27, 2012

The Turkish central bank has doubled the amount of gold that lenders can hold in reserves (as opposed to paper money – Lira) as part of their reserve requirement changes. As the WSJ reports, this shift from 10% to 20% means that Turkish banks can use their shiny yellow metal as fungible money reserves against foreign currency deposits. This move follows closely on the heels of our comments on last week’s ‘gold transfer’ efforts in Turkey to unleash some of the country’s vast personal holdings of Gold. This effort to draw down on the nation’s individual gold reserves – the traditional form of savings in Turkey – is part of Ankara’s efforts to reduce a finance gap that is currently around 10% of GDP but more importantly it should serve as a lesson reality-check for Bernanke that gold is money and in the words of a 70-year-old housewife “In an emergency, I can convert [gold] to cash and I don’t have to wait for the bank to say the asset has matured.” It would seem a better store of value than the Lira over the past decade or two and we suspect incentives will have to rise considerably to ‘help’ the people part with their savings-gold.

It would seem the rise in the value of Gold (in Turkish Lira) has been a ‘good’ store of value for the Turkish people over the past two decades…

Turkey Once Again Proves That Gold Is First And Foremost Money 20120327 TRLGOLD 0

 

This article was posted: Tuesday, March 27, 2012 at 8:09 am





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