In a previous article, I explained as simply as I can how gold direct leasing works. A central bank (let's say the Bank of England) leases gold to a Bullion Bank (BB)(let's say UBS) for 1%. UBS then sells the gold on the open market through the London Bullion Market (LBM). UBS then takes the proceeds to buy a higher rate Treasury.
It is not as simple as that because eventually UBS has to give the gold they leased back to the Bank of England.? This is where it gets complicated because didn't UBS sell the gold in the open market. Also, when they have to give the gold back, what if the price of gold lowered and now they have to take a loss? UBS is at a risk to price swings.
So what does UBS do?
According to Rapid Trends:
national wear red day gunner kiel gunner kiel groundhog soulja boy did the groundhog see his shadow punxsutawney phil
No comments:
Post a Comment