This summer, a quiet change was made to the accounting rules for gold in bank vaults. It made headlines almost nowhere, but it has the potential to dramatically change how gold is viewed relative to cash in the broader economy. For informed and prepared minds, it’s also the chance to stock up up on gold at an attractive price before the mainstream masses really process the change.

Basically, for banks, gold is now 100 percent money.

How is that different than it was before? Previously, banks could only count gold as 50 percent money.

Confused? Well, welcome to the wonderful world of bank reserve accounting. This is the system that allows banks to have $1 in actual cash but make $5, $10, or even $20 in loans on that same dollar. Reading the fine print of the regulations around this system is better than NyQuil on a late night.

But the fine print has a wealth of gems for informed minds that care about the factors influencing the value of the money supply. Under the former rules of banking reserves, cash, U.S. Treasuries, and bonds of certain other developed nations were counted as 100 percent assets, since they were perceived to be “zero risk” assets by banking regulators. Gold, on the other hand, was counted as a 50 percent asset, since gold was perceived to be a riskier asset to hold by the regulators.

Continue: http://www.offthegridnews.com/2012/08/21/banks-finally-allowed-to-c...