JulieB Posted October 24, 2011 Share Posted October 24, 2011 Seems our government (presumably acting on advice - haven't seen any accounts otherwise - sold, and the price then went up).. Brown was advised by just about everyone he consulted not to sell . If I recall he announced the sale in advance thus ensuring we managed to get a rock bottom price... Now the man was an idiot but I dont think he was (totally)stupid and so one has to wonder what the real reason was for offloading the gold... Maybe there was something in the "carry trade" rumours around that time concerning gold ... And maybe Brown had no choice ? He did it twice. He should have drip fed the Gold onto the market to be sold. Instead Brown announced it was to be sold beforehand, the price dropped and we all lost loads pawning off some more of the family treasures! In volatile times Gold is a tangible asset that is sort after, it's a good hedge against other falls in currencies and markets. It's been a good investment over the past decade. Actually IIRC fine wine and sort after farmland and forestry have actually been the most productive assets in the past decade. Saudi cash machines can now pay you out in bars of Gold. The Chinese have been going made for the stuff the past few years instead of saving in banks also. Families are buying up trinkets. Long term over a number of decades though the equity markets have seen the best returns but then you've had to put up with very uncomfortable amounts of volatility. In the past 13 years the FTSE is back where it was then, so if you've passively invested in simple tracker funds, you ain't done very well. Link to comment Share on other sites More sharing options...
CI Posted October 24, 2011 Share Posted October 24, 2011 Anyone know who bought the gold Brown flogged Did he just put it in one if those pre-paid envelopes? Link to comment Share on other sites More sharing options...
snowychap Posted October 24, 2011 Share Posted October 24, 2011 In volatile times Gold is a tangible asset that is sort after, it's a good hedge against other falls in currencies and markets. What actual purpose does a country's gold reserve serve if it's sat in someone's drawing room doing shag all? Link to comment Share on other sites More sharing options...
CI Posted October 24, 2011 Share Posted October 24, 2011 It has tangible net worth, as opposed to bank notes Link to comment Share on other sites More sharing options...
colhint Posted October 24, 2011 Share Posted October 24, 2011 In volatile times Gold is a tangible asset that is sort after, it's a good hedge against other falls in currencies and markets. What actual purpose does a country's gold reserve serve if it's sat in someone's drawing room doing shag all? I thought it was your nest egg if you like. In boom times keep it there. In a recession sell some to help the economy. Perhaps we should do that now. Link to comment Share on other sites More sharing options...
Genie Posted October 24, 2011 Share Posted October 24, 2011 In a recession sell some to help the economy Thats exactly what happened wasn't it? Link to comment Share on other sites More sharing options...
CI Posted October 24, 2011 Share Posted October 24, 2011 Sold at rock bottom price though We effectively lost billions in the Brown cash for gold transactions Link to comment Share on other sites More sharing options...
colhint Posted October 24, 2011 Share Posted October 24, 2011 In a recession sell some to help the economy Thats exactly what happened wasn't it? Almost, well except we weren't in a recession, we were in a period of about 6 years of growth. Link to comment Share on other sites More sharing options...
snowychap Posted October 24, 2011 Share Posted October 24, 2011 Sold at rock bottom price though We effectively lost billions in the Brown cash for gold transactions What was the book value of the gold which was sold? Link to comment Share on other sites More sharing options...
colhint Posted October 24, 2011 Share Posted October 24, 2011 Sold at rock bottom price though We effectively lost billions in the Brown cash for gold transactions What was the book value of the gold which was sold? 395 tonnes at an average of $275 per ounce. Last week it was $1640 per oz Link to comment Share on other sites More sharing options...
JulieB Posted October 24, 2011 Share Posted October 24, 2011 In volatile times Gold is a tangible asset that is sort after, it's a good hedge against other falls in currencies and markets. What actual purpose does a country's gold reserve serve if it's sat in someone's drawing room doing shag all? I don't understand the point - Gold is no different to any other asset that a country owns. It's just more liquid than say a valuable painting or a listed building owned by the crown. Their value is only realised on sale, however you don't sell assets surely unless the price is right. Gold reserves go on the plus side of the balance sheet and the more the price rises, the more that asset makes the Crown worth more. It is an asset... like a property.. that you can buy, sell or use to borrow against.. only in UK PLC's case we ain't got any left but we're still borrowing! Link to comment Share on other sites More sharing options...
CI Posted October 24, 2011 Share Posted October 24, 2011 Sold at rock bottom price though We effectively lost billions in the Brown cash for gold transactions What was the book value of the gold which was sold? 395 tonnes at an average of $275 per ounce. Last week it was $1640 per oz An act of gross negligence from Brown In the olden days he'd have been hung Link to comment Share on other sites More sharing options...
PIW Posted October 24, 2011 Share Posted October 24, 2011 Wasn't it our gold reserves that were sold off? Not all of it? You'd imagine that our reserves weren't that great considering the amount of gold around. Link to comment Share on other sites More sharing options...
CI Posted October 24, 2011 Share Posted October 24, 2011 How many ounces in a tonne ? Link to comment Share on other sites More sharing options...
ender4 Posted October 24, 2011 Share Posted October 24, 2011 How many ounces in a tonne ? 35274 ounces in a tonne. Link to comment Share on other sites More sharing options...
ender4 Posted October 24, 2011 Share Posted October 24, 2011 395 tonnes at an average of $275 per ounce. Last week it was $1640 per oz sold at $3.8 billion. could have sold it at $22.8 billion last week. cock-up of $19billion. Link to comment Share on other sites More sharing options...
colhint Posted October 24, 2011 Share Posted October 24, 2011 is that the biggest cock up of any chancellor ever Link to comment Share on other sites More sharing options...
tonyh29 Posted October 24, 2011 Share Posted October 24, 2011 sold at $3.8 billion. could have sold it at $22.8 billion last week. cock-up of $19billion. yeas and No depends where he invested the money generated by the Gold he sold ... some rough calculations if he put it into Government bonds meant that he "only" cost us around £6 - £9 bn Interestingly there was an opinion from some economist the other month that osborne has messed up by not buying into Gold , despite it's somewhat high price at present ... Link to comment Share on other sites More sharing options...
snowychap Posted October 24, 2011 Share Posted October 24, 2011 Sold at rock bottom price though We effectively lost billions in the Brown cash for gold transactions What was the book value of the gold which was sold? 395 tonnes at an average of $275 per ounce. No. That was the average price at which it was sold. What was the book value? Last week it was $1640 per oz What was it the week before or the month before that or the year before that or the first time when someone said that '£x billion[sic]' had been 'lost'? Link to comment Share on other sites More sharing options...
snowychap Posted October 24, 2011 Share Posted October 24, 2011 I don't understand the point - Gold is no different to any other asset that a country owns. If it is just something being held on to then it is unproductive. Their value is only realised on sale, however you don't sell assets surely unless the price is right. When was/is the price right? Would it have been right in 2003? In 2004? And so on? As you rightly say the value is only realized on sale so, as suggested above, all of the people who have been calculating figures since he did it (often, if not exclusively, talking in nominal terms rather than real terms) are making nonsensical claims because in order to realize the amount they would have to be selling it at that time and at that specific price. And, as Tony points out above, it depends on where this money went. It would make a difference if it was used to prop up the euro, to try and keep down the price of gold, for capital spending projects or invested in other currencies and other government bonds. It is an asset... like a property.. that you can buy, sell or use to borrow against.. Well, that's one of the reasons that I asked the question. Is that asset working or is it just sat on the balance sheet? Is it actually being used as some sort of collateral or just as something that reduces the country's net debt? By all means let's criticize and lambast Gordo for his decision but let's actually do it with some thight rather than some crass back of a fag packet calculations which don't take in to account many other factors and less obvious costs and benefits. My biggest problem with what he did is that I haven't seen him explain why he supposedly chose to ignore the advice not to do what he did. Edit: I'd also be interested to know what the advice actually was. Was it: leave it till next year, never sell it or buy high sell low :winkold:? Link to comment Share on other sites More sharing options...
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