As the saying goes, always check the small print and in the case of the Greek bailout the creditors have the right to seize gold. Although the amount of gold reserves held are quite small, many economists suspect gold could play a major role in any future change to the US dollar’s status as world’s reserve currency.

The New York Times reports that Greece’s lenders may have the right to seize the Bank of Greece’s gold reserves.

“Ms. Katseli, an economist who was labor minister in the government of George Papandreou until she left in a cabinet reshuffle last June, was also upset that Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal.”

The Reuters Global Gold Forum confirms that in the small print of the Greek “bailout” is a provision for the creditors to seize Greek national gold reserves. Reuters correspondents in Athens have not got confirmation that this is the case so they are, as ever, working hard to pin that down.

Greece owns just some 100 tonnes of gold. According to IMF data, for some reason over the last few months Greece has bought and sold the odd 1,000 ounce lot of its gold bullion reserves. A Reuter’s correspondent notes that “these amounts are so tiny that it could well be a rounding issue, rather than holdings really rising or falling.”

It was done in a sneaky way

While many market participants would expect that Greece’s gold reserves would be on the table in the debt agreement, it is the somewhat covert and untransparent way that this is being done that is of concern to Greeks and to people who believe in the rule of law.

Its not just Greece who may have to give up their gold reserves.

Recent months have seen many senior German government officials calling for so called “PIIGS” nations gold reserves to be used as collateral. Such as Angela Merkel’s budget speaker and his opposition counterpart who urged Portugal to consider selling their gold. 

Norbert Barthle, Germany’s governing coalition budget speaker and his counterpart Carsten Schneider from the Social Democrats, the biggest opposition party, urged Portugal to consider selling some of its gold reserves to ease its debt problems. They called for a review of Portugal’s request for financial aid to include gold and other potential asset sales.

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