Why have Central Banks started using their gold reserves to raise cash?
Background: http://www.huffingtonpost.com/dk-matai/mystery-of-bis-gold-swaps_b_638745.html Opening Paragraph: Central banks have started using their gold reserves to raise cash — a record USD 14bn worth — from the Bank for International Settlements (BIS), the central bankers’ bank based in Basel, Switzerland. BIS co-ordinates financial co-operation amongst its 57 member countries, that include most of the G20. The BIS, took 346 tonnes of gold — a record volume of gold reserves — in exchange for foreign currency in “swap operations” in the financial year ending March 31st, according to a note in its latest annual report. The increase in the use of gold swaps is particularly surprising because central banks have rarely used them for decades, and as a result, the amount of gold at the BIS has remained stable for years. These are the first major BIS gold swaps since the 1970s. Based on the latest data, BIS would be executing the biggest gold swaps in history in 2010. In a gold swap, on
