On June 4th, the Federal Reserve, the Office of the Comptroller of the Currency, and the FDIC all circulated a memo asking for review of a proposed policy change. The policy change includes several things, but this is the biggest possible game changer:
Gold will be considered “zero risk weight” if it’s “gold bullion held in the banking organization’s own vaults, or held in another depository institution’s vaults on an allocated basis…”
If this proposed rule change goes into effect, then banks and financial institutions will be able to buy gold without it being considered risky, meaning the reserve ratios suddenly fundamentally change.
This means that gold would be considered with the same risk as treasury bills. This is huge, huge, huge. It woud mean big banks would suddenly dump money into gold without having a lot of the negative consequences gold currently has in terms of reserve ratio requirements.
Note that the policy hasn’t, that we can see, gone into play yet. Still, this is an incredibly, incredibly important development we should be watching. If this does happen, the gold market would have just fundamentally changed, and this is one of many reasons to regularly buy gold.
Join Over 8,000 Investors:
In less than 15 minutes a week, you'll learn everything you need to know about gold prices, the collapsing dollar, and the real inflation rate.
Thousands of investors have already signed up for the newsletter and are getting the info for free: