Target2 – an expression that is in the media because of the German model economist Professor Sinn. Sinn has long assumed that the equalization system among the national central banks in the Eurosystem, which is operated by the European Central Bank (ECB), will cause trouble. The latest developments have made the inequalities in the Target2 balances clear again. The balance of the Deutsche Bundesbank alone rose from January to September by 27 percent to 1.15 trillion euros. An immense sum that will probably never be served properly. Target2 balances come about when national central banks lend their domestic companies so that they can pay for supplies from other countries, for example.
In total, there is an imbalance of 1.5 trillion euros in the ECB’s Target2 system. If Target2 were to collapse, the Deutsche Bundesbank would probably be left with its claims against other central banks. Around 400 billion euros could well survive an end to Target2 as claims. But that’s not all. Since the Bundesbank owns 26.38 percent of the ECB’s capital, the Bundesbank is also liable for defaults accordingly. An additional payment obligation of around 400 billion euros could thus be met, although the majority of the Target2 claims are for Germany.
In order for the euro system to survive such a Target2 failure shock, a lot more liquidity should be pumped into the market. That should weaken the euro and further fuel the devaluation race with the US dollar. Winner: The gold price in all currencies, including gold companies such as Filo Mining or Fury Gold.
Filo mining – https://www.commodity-tv.com/play/filo-mining-exploration-targets-set-drill-program-starting-soon/ – Develops the Filo del Sol high grade copper-gold project located on the border between Chile and Argentina. The project is characterized by gold finds close to the surface.
Fury Gold Mines – https://www.commodity-tv.com/play/auryn-resources-and-eastmain-resources-shareholder-approve-merger-and-peruvian-spin-off/ -, an exploration and development company, focuses on three productive mining regions in Canada. A 50,000 meter drill program is about to begin on the Eau Claire project in Quebec.
Current company information and press releases from Filo Mining (- https://www.resource-capital.ch/de/unternehmen/filo-mining-corp/ -) and Fury Gold Mines (- https://www.resource-capital.ch/de/unternehmen/fury-gold-mines-ltd/ -).
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