Truth Revealed – ECB To Italian Government: Your Gold Is Ours
Truth Revealed – ECB To Italian Government: Your Gold Is Ours from ZeroHedge
TDC Note – We discussed this situation, at length, in two different podcast on The Gadfly. One with Tom Luongo, from Gold, Goats and Guns. which is a Gadfly exclusive but available for public consumption. – click here now and I can assure you it is well worth your time. The other is during the marathon Contributor RoundTable with Jim Willie, London Paul, Ken Schortgen and yours truly! Don’t forget to sign up for the one week FREE TRIAL
As the squabbling over Italy’s populist government’s plans to blow out its budget deficit to finance an agenda of tax cuts and social spending (including a ‘citizen’s income’ that’s essentially UBI-lite) crowded the headlines, the issue of who owns the 2,451 metric tons of gold reserves held by the Bank of Italy has been quietly ignored – at least, outside of Italy.
But that might be about to change.
On Tuesday, the ECB asked the League, the dominant party in Italy’s ruling coalition, to remove a reference to the Bank of Italy holding gold as an “exclusive title of deposit” according to Bloomberg.
Translation? If Italy is not allowed to have title to Italian gold, then Italy’s gold now belongs to the ECB.
ECB ASKS LEAGUE TO REMOVE REFERENCE TO BANK OF ITALY HOLDING GOLD AS “EXCLUSIVE TITLE OF DEPOSIT”
Translation: Italy’s gold is now the ECB’s gold
— zerohedge (@zerohedge) June 25, 2019
Today’s escalation over Italy’s gold “title” comes two months after the WSJ reported that Italy’s ruling populists pushed ahead with efforts to seize control of the central bank and its gold reserves. Complaining that hundreds of thousands of small individual investors lost billions of dollars after several Italian banks failed in recent years, the current Italian government depicted the central bank as a symbol of a technocratic elite aloof from the needs of ordinary Italians.
“We need a change of course at the Bank of Italy if we think about what happened in the last years,” said Deputy Prime Minister Luigi Di Maio, leader of the 5 Star Movement.
Shortly thereafter, 5 Star lawmakers asked parliament to pass two draft laws.
One law would instruct the central bank’s owners, most of them private banks , to sell their shares to the Italian Treasury at prices from the 1930s.The other law would declare the Italian people to be the owners of the Bank of Italy’s reserve of 2451.8 metric tons of gold, worth around $102 billion at current prices.
“The gold belongs to the Italians, not to the bankers,” said Giorgia Meloni, leader of the Brothers of Italy, a far-right opposition party that supports both bills. “We are ready to battle everywhere in Italy and to bring Italians to the streets if necessary.”
So far there has been no fighting but if indeed Draghi just told Italy that its gold now belongs to the Frankfurt-based central bank we expect that to change (We discussed the proposed laws in more detail here).