Golden solution or golden folly?

The Wall Street Journal ran an opinion piece this morning by Stephen Fidler titled “A Golden Solution for Europe’s Sovereign-Debt Crisis.” In it, Fidler first suggests using gold as collateral for nation state bond offerings then rejects the idea on three grounds:
1) Central banks not governments own the gold and “the ECB must agree to any transfers of gold to governments.” He does not mention the governing document for this assertion, but we’ll take his word for it.
2) A transfer of gold to governments “raises questions about whether such transfers breach the prohibition on central banks providing monetary finance to governments.”
3) Most of the euro-zone central banks signed the Washington Agreement to limit their gold sales. “It is not clear,” says Fidler, “whether using gold as collateral would be considered inside or outside the scope of this agreement.”
All three assertions are very good reasons to believe that it would be difficult to mobilize the gold of European countries as bond collateral, but there are a few other reasons, beyond the political hang-ups and restrictions within the euro-zone that need to be considered.
1) Much of the gold under consideration has already been leased through the bullion banking system and the metal sits as a paper entry, usually referenced as a receivable, on central bank balance sheets. Pledging it as collateral would amount to pledging it twice.
2) There is some question as to whether or Portugal, which is mentioned in the article as a prime candidate in a gold-as-collateral bond scheme, has already deposited its gold with the Bank for International Settlements in some type of collateral arrangement.
3) Even if the gold were available (the amount of leased gold is in most instances a closely guarded secret) any nation state so encumbering its gold reserves would surely need to consider the loss of those reserves due to the depth and seeming intractability of the fiscal and debt problems in Europe. There is little doubt in my mind that savvy investors of all sorts, including other central banks and sovereign wealth funds, would jump at the opportunity to purchase gold-backed bonds. It represents a back-channel for unloading unwanted dollars and euros for a bond likely to default in due time (and possibly in short order) and result in the delivery of gold — an increasingly scarce monetary commodity in physical form.
Pledging gold as collateral under the current circumstances in Europe is short step away from being forced to sell it or ship it in the case of default. With Europe on the verge of a monetary collapse and economic breakdown any mobilization of gold would be considered by certain elements within those nation states as foolhardy. We recall that Greece added to its gold reserves at one point during its crisis precisely because it was considering the possibility of either being expelled from the European Union, or taking leave of its own accord. Under such circumstances, the more gold in the national treasury the better.
In a sidebar to the article, the Wall Street Journal attempts to make a case that gold-backed bonds would be bad for gold in that the metal would need to be sold if there were a default. I think the opposite, i.e., that this gold would never see the light of day, but go directly to the bond-holders in question and those bond-holders would likely be the strong hands of Asian nation states, mega-hedge funds and prominent investors who would welcome the delivery of gold to their coffers under what would undoubtedly be some very difficult economic circumstances globally. Their fear would not be that sales would depress the price but that they would actually receive the collateral hypothecated by the nation states.
For the nation states themselves there is more folly than wisdom in this scheme and more adding to their problems than arriving at a solution.