In the June 18 meeting of the Fed ad FDIC they reviewed what are known as the Basel III standards for Banks. As a result of that meeting, the following key points were established:
1. Tier 1 assets, for banks, are the safest assets that a bank can hold in reserve
2. Gold is defined as a Tier 1 asset under these new Basel III standards
3. The reserve requirements just increased from 4% to 6%. The new standards allows the banks to increase their reserves by holding gold.
What does this mean
First of all its a clear statement and recognition that gold is as safe as cash when it comes to banking. Further, this means that the Fed and the banking system now, for the first time in a long time, see gold as money — not just some commodity to put in your portfolio.
What does this mean for your self directed IRA
This admission and acknowledgement that gold is money will likely cause even more gold buying and holding by banks and other financial institutions. This tells you that they value it as a safe haven. This means that you should place the same kind of value in the metal. Because of this, we continue to maintain the position that gold and silver should be a key part of your self directed IRA portfolio.
Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.