At the same time he (Austria’s Finance Minister) mentioned they had been earning income on leasing the gold. These central banks have deposited their gold with the Fed or the Bank of England, and in turn it has been leased out. Of course when gold is leased out it ultimately gets sold in its physical form to someone who is not likely to return it.
For example, if our ETF buys gold, it’s not going back. If the Chinese buy gold, it’s not coming back into the system. If the Indians buy gold, it’s not coming back. So the central bank has, in essence, an IOU from a bullion bank on their balance sheet, but if they exercised that IOU, there is no way they would get that gold back."
- Eric Sprott during a recent King World News interview, read the full interview here: