Why not sell some of our gold reserves?

[rov1200]

The price has quadrupled since Brown sold a portion so we could achieve a fair price for the gold. Do we need such a large reserve? We have more than twice held by Spain and Australia and compared with Ireland we have nearly 50 times as much.

What are our total reserves and what could they fetch on the market?

When the economy picks up we could if the price is right replentish those that have been sold.(maybe)

Would the sale cover our current debts?

[R1Geezer]

Well no doubt we'd get a good price but even if we sold the lot it wouldn't amount to much in the scheme of things.

[joggerjayne]

GB sold more than "a portion"

He sold well over half of it.

[joggerjayne]

Patricia Hewitt claimed that they were selling "3%" of the gold reserves.

I've put "3%" in quotes, because they actually sold over 400 tons, out of a total reserve of 715 tons ...

... an interesting interpretation of "3%"

[jake-the-peg]

Gold is about 15% of our entire reported reserves

http://en.wikipedia.o...fficial_gold_reserves

http://en.wikipedia.o...ign_exchange_reserves

These are about $96 Billion

UK defecit is currently about £156 Billion

[joggerjayne]

JTP's link suggests we have about 310 tons left, which is consistent with my figures.

[Old_Geezer]

I don't claim to be an expert in money matters but ought we not be more concerned that our currency can't be covered by our reserves already, and is only working on a trust system ? Never mind about selling more.

[ABerrant]

Mr Brown sold 395 tonnes of gold (55% of the 715 tonnes reserve) between 1999 and 2002, realising $3.5bn.

The price of gold was at a 20 year low and the announcement of the sale further depressed the price by around 8%.

[joggerjayne]

... not that GB would have cared one bit, if he'd just completed his (our) sale !

[jake-the-peg]

Amazing thing hindsight

In 2007 it was reported that the sale of that gold had cost us £2 Billion

In 2009 it was reported that it was £5 billion

Should they have sold in 2007 and lost £3 billion?

Would you advise the Goverment to sell now?

I also love the way that the right wing love quoting the amount in tonnes or as a percentage

They also love talking about it in the context of the defecit

That loss is what? 3% of the defecit? - why don't you quote that Jayne?

[joggerjayne]

The deficit is a fluctuating figure ... it goes up and down.

The value of the reserve is also fluctuating ... it, too, goes up and down.

The only constant is the tonnage of the reserve ... THAT is why I use the tonnage figure, because it can't be manupulated by selective reference to particular dates.

[sandyRoe]

If things are as bad as Cameron says he might be asking us to donate the gold fillings in our teeth.

[ABerrant]

Hindsight? The Bank of England was advising Mr Brown not to go ahead with the auctions.

Parliament was told the sale was 'on the technical advice of the Bank of England'. Hindsight would suggest that Treasury Ministers deceived Parliament.

[Buenchico]

The UK's gold reserves contribute towards the security required against our massive debts. If the level of the reserves drops the UK will lose its 'triple A' credit rating. The consequence of that would be that the UK would be required to pay much higher interest on its existing borrowing (and on any future borrowing), requiring either higher taxes or further public spending cuts in order to service the debt.

Chris

[123everton]

Old Geezer has just described the basis of the FIAT currency system.
I think it'd be foolish to sell much gold right now, China's currently backing it's currency with commodities (most notably silver) but gold too, Malaysia and Indonesia have introduced a gold currency to protect it's people against a collapse in the U.S dollar, Russia has it's oil and gas to back it's currency.
C.I.S countries are heading towards using the rouble in all transactions, and Russia is pushing for oil to be priced in roubles too (I think Venezuela is backing them), it's only China that is keeping America from a currency collapse, it holds billions of dollars worth of U.S bonds, if it dumps them the dollar will crash.
And yet some American economists want to place greater import duties on Chinese goods (the prelude for the last great depression) whilst others complain that the Yuan Remnibi is valued too low (yet the dollar's been undervalued for years) if the Yuan is allowed to float then China will become all powerful economically.
The whole international finance system needs to reworked, the ratings are all skewed and unreliable, interesting times....