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Thursday, March 28, 2024

Liar, Liar, Pants on Fire; Spoon-Fed Demands by the Number

Courtesy of Mish.

On Wednesday I reported Fools in Cyprus to Sell Gold, Hike Corporate Taxes to Finance Small Part of Bailout.

That rumor was quickly (but unbelievably) denied.

On Thursday, the International Business Times reported Cyprus Denies Rumor It Will Sell Its Gold To Raise Funds; Option Raises Same Question For Others.

A Central Bank of Cyprus spokesperson said Wednesday that rumors stating that it would sell 75 percent (approximately 10 tons or $523 million) of its gold were inaccurately reported by Reuters. Aliki Stylianou told the Cyprus News Agency, or CNA, that no such deal was ever “raised, discussed or debated” with the bank’s board of directors.

No Such Deal Ever Raised! Really?

In spite of denials that any such deal was ever “raised, discussed or debated” I knew what was about to happen. Sure enough ….

Cyprus Gold Sale Must Cover Emergency Loan Loss

ECB President Mario Draghi says Any Cyprus Gold Sale Must Cover Emergency-Loan Loss

European Central Bank President Mario Draghi said the profits of any gold sales by the Cypriot central bank must be used to cover losses it may sustain from emergency loans to Cypriot commercial banks.

European creditors today left a possible gold sale in the hands of the Cypriot central bank, which manages 13.9 metric tons of the metal, according to the World Gold Council.

“The decision is going to be taken by the central bank,” Draghi said after a meeting of euro-area finance officials in Dublin. “What’s important, however, is that what is being transferred to the government budget out of the profits made out of the sales of gold should cover first and foremost any potential loss that the central bank might have from its ELA.”

ELA stands for Emergency Liquidity Assistance, a lifeline that can be offered by national central banks in the euro region to commercial banks that can’t get funding.

Asked about a letter he wrote to Cyprus President Nicos Anastasiades, Draghi said the letter is “very, very clear.” He said the government must abide by the central bank’s handling of the gold stock, since it is independent from political control under European rules.

More Lies Than One

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