The dwindling credit of Turkey and significant decline in its currency, has led to the new clever idea of confiscating gold with a smile. The Turkish Central Bank has come up with an idea of how to confiscate private gold while pretending they are helping you earn more money. Their objective is to make the private gold stocks of the citizens available to the financial system for themselves, but how to sell that to the people?.
The Turkish central bank is launching two new investment opportunities for physical gold, according to reports in the Daily Sabah . They are issuing a gold bond on one hand and on the other an instrument for the loan of gold and gold jewelry.
The scheme is that the Turkish government is really seeking to use the precious metal in the private sector making it available to the financial industry. This is being marketed as broadening the financial system allowing citizens to earn additional income with their gold reserves under their mattresses by turning it over to the government. They are pitching that this will stimulate the economy according to Deputy Prime Minister Mehmet Simsek .
What the government is really doing with issuing a gold bond that will pay you interest for using your gold. They are promising to pay a certain interest rate during the term of the bond in Turkish lira. This interest rate will be oriented towards the development of the gold price. The gold-covered loan certificate also entitles the holder to receive interest after physical gold or gold jewelry has been deposited with the intermediary bank.
This clever scheme means that the government cannot borrow internationally, so it now wants to confiscate people’s gold using a bond scheme that in the end they will be forced to default. This will be a major test of the saying: You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time*.
*(There is no evidence that Abraham Lincoln ever said that)
