r/Wallstreetsilver • u/IlluminatedApe • 11h ago
DUE DILIGENCE Basel III: Read the Rulebook Before You Repeat the Sales Pitch
The Charlatans in this sector hate me anyway, so lets me piss them off some more by making you Apes smarter:
If someone tells you Basel III suddenly made gold a “Tier 1 asset” and therefore prices must explode, ask them to show you the actual provision.
Then ask why the relevant gold treatment appears in a document from 1988.
A few distinctions will save you hours of listening to people who confuse banking terminology with a price forecast.
1. Tier 1 capital means the bank’s capacity to absorb losses.
It consists of Common Equity Tier 1 and qualifying Additional Tier 1 instruments. Common shares and retained earnings are its principal foundation.
A gold bar sitting in a vault is an asset. It does not automatically become the bank’s regulatory capital. Borrowing $1 million to buy $1 million of gold does not magically create $1 million of equity.
Read Basel CAP10, particularly paragraphs 10.2–10.6.
2. A 0% credit-risk weight is a different calculation and the gold provision is decades old.
The original Basel I agreement already allowed a 0% credit-risk weight, at national discretion, for gold bullion held in the bank’s vaults or on an allocated basis, to the extent backed by bullion liabilities.
That is in Annex 2, footnote 1, printed page 21 of the July 1988 agreement.
Also, “0% credit-risk weight” does not mean gold’s price cannot fall.
3. “Level 1 liquid asset” is another separate category.
Liquidity rules concern what banks can use to meet stressed funding needs.
In May 2025, the LBMA publicly corrected claims that gold would become “Tier 1 HQLA” on July 1, 2025. It explained that people were mixing capital rules with liquidity rules.
Even industry commentary sometimes uses “Tier 1 asset” loosely. That wording does not establish a new Basel III promotion.
Read the LBMA correction yourself.
4. Basel III did introduce meaningful funding requirements.
Under the Net Stable Funding Ratio, physical traded commodities, including gold, generally receive an 85% required stable funding factor.
That concerns how banks fund their exposures. It does not instruct them to replace 85% of paper claims with physical gold, announce a gold standard, or set your investment’s future price.
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Consider how useful the confusion is to a promoter: an official institution supplies credibility, unfamiliar terminology discourages scrutiny, and an implementation date supplies urgency.
The claim still needs a mechanism connecting the rule to the buying pressure being promised.
Before accepting another monetary-reset prediction, ask: Which paragraph? What changed? When? And how does that change produce your claimed outcome?
REMEMBER THE WEF: YOU WILL OWN NOTHING AND BE HAPPY.
STACK SILVER BECAUSE THEY NEED IT TO IMPOSE THE DIGITAL CONTROL. STOP LISTENING TO IDIOTS! WE HAVE "SUPER INTELLIGENCE" AT OUR FINGER TIPS. USE IT!
