If this gold backed bond plan would become reality I can imgaine the Central Banks in Europe will start to demand the Bullion banks to return the physical gold that has been leased to them over the last 10 years. Just imagine what that will do to the gold market and the gold price. That gold can only be acquired at a much, much higher price.

So far Italy has categorically denied they would accept their gold reserves to be used as collateral, but who knows that position is about to change.