CNBC takes cognitive dissonance to eleven

[pmbug]

... In reality, it does not matter one bit whether the Federal Reserve Bank of New York actually has the German central bank's gold or whether the gold is pure. As long as the Fed says it is there, it is as good as there for all practical purposes to which it might be put. It can be sold, leased out, used as collateral, employed to extinguish liabilities, and counted as bank capital just the same whether it exists or not.

The actual presence of the gold wouldn't make a lick of difference unless, say, Germany's central bank decided it wanted to start using the gold for some practical, non-monetary purpose like making watches.
...

http://www.cnbc.com/id/49540593

Why, it's as good as bank credit!

:rotflmbo:

 

[swissaustrian]

Wow. Epic propaganda piece.
That would never have been published without the FED's consent.

 

[benjamen]

This article makes my head hurt.

Imagine if I opened up Benjamen's vault services and offered to store your valuables. After you deposit all your wealth, you come back years later and say you want to just view your belongings. My first response is to make it difficult for you to do so with paperwork, procedures, ect. My second response is to say it doesn't really matter if your goods are actually in my vault or not. As long as you think your wealth is safe, it is the same as it actually being in my vault.

 

[pmbug]

benjamin - your analogy works only if your vault service is also a market where peeps buy, sell, loan and lease the contents of your vault.

 

[benjamen]

benjamin - your analogy works only if your vault service is also a market where peeps buy, sell, loan and lease the contents of your vault.

I know, I was just giving the base case scenario. It gets even worse once you introduce swaps, loans, ect.