Wealth in Portugal
Gold in Portugal
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Within the country of Portugal, there are plenty of economic issues. In fact, the entire world is well aware of these economic problems. In spite of the poor economic state, the gold reserves are better than ever. Facing serious issues, Portugal has been encouraged to start utilizing this commodity to assist those who find themselves impoverished within the borders of the small nation.
Summary of Portugal’s Buried Wealth:
- 16 Billion Euros
- 382.5 Tonnes more than the United Kingdom
- Double the Amount Held in Major Gold-Producing Countries
During the present economic climate, neutral analysts have been called forward, requesting that the European Union give them the go-ahead to start utilizing these stocks. In addition to that, the World Gold Council, also known as the WGC states that the European Parliament should allow Portugal to offer their gold as collateral in the case of sovereign debt issuance.
A recent report states that Portugal is actually holding gold reserves greater than 20% of its financing requirements for the next two years. This report was conducted by a neutral party, otherwise known as Europe Economics, based out of London England. It should be noted that the gold in Portugal is not the property of the Eurozone. In fact, it is owned solely by the Bank of Portugal in Lisbon, which makes it more than acceptable for the settling of any debt. In spite of that, as Portugal is a part of the European Union, authorization from the EU would still be required if Portugal is to use gold for any financial transaction.
Gold vs. Euro
As pointed out by the WGC, gold is a more reliable asset than the Euro. While the number of Euros available is usually accurate, there is still some doubt as they are typically represented as numbers on a computer screen. Gold on the other hand can be seen and counted by creditors. It sits in a warehouse or vault, waiting for interested parties to visit and take stock. That being said, as collateral, gold is considerably more reliable and credible.
While currency might represent gold, gold is a constant in currency. In taking a loan, or attempting to settle a debt, the gold bars could simply be sent to the third party and Portugal would collect their property once the loan was paid back. In the event they defaulted however, they would not have their gold returned to them.
Portugal Gold Facts
- 20 Tonnes were Sold off in September of 2006
- Portugal’s Gold Reserves are now half from 1975
- Portugal Represents the highest Proportion of GDP in the Developed World
Citizen Exports
The government might be holding onto its precious metals, but the citizens are doing no such thing. Around 13 tonnes of second hand gold were exported from the country last year, which only helps to solidify the economic issues that are occurring.
Portugal is facing some serious economic issues, but these precious metals might just be its saving grace. Whether or not the EU plans to allow this tactic is up in the air, but with the consistency and reliability of gold, there is really no reason for them to reject these plans.
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