Commodity Trade Mantra

Posts Tagged ‘Fractional Reserve’

Erosion of Trust Will Drive Gold Prices Higher

An erosion of trust means that people are less willing to accept the counterparty risk that comes with financial assets that occurs during financial busts. People as a consequence move their wealth into tangible assets, like farmland, oil wells or in tangible forms of money, which means gold.

Fractional Reserve Bullion Banking And Gold Bank Runs

The stability of the fractional reserve bullion banking system and its gold run-proofness depends on the extent to which central banks have lent gold physically or only via book entry to bullion banks. Unallocated bullion bank accounts are fractionally backed, no different to fiat banking.

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