Between 1999 and 2002, Gordon Brown 'ignored advice' and sold a massive amount of Britain's gold reserve at rock bottom prices (average of $265 a ounce; as of right now, its at $1000 an ounce). It was estimated at the time that his action of selling 451 tonnes of gold at the very bottom of the 20 year bear market cost the UK taxpayer £2 billion. He apparently made a measly £1.88 billion ($3.48 billion) for the sale. He sold this off over 17 auctions.
In 1999 Britain had 746 tonnes of gold reserves. Brown sold 451 tonnes leaving us with only 295 tonnes.
And it gets worse. The gold had to be paid for in $USD (a stable and strong currency at that time) then Brown immediately converted the majority of the Dollars to Japanese Yen (and lost 20% on his investment before he reduced the Japanese Yen foreign currency reserve holding to a sensible level) and bought billions of the new Euros currency at great risk and expense to British taxpayers (said a part of a devious plot to prop up the Euro in it’s early days and accelerate the demise of the Dollar as the world reserve currency; this was laughed off at the time).
Obviously the way the gold was sold smacks of corruption and billions were thieved from the public in an arrogantly brazen manner, at least as arrogant and brazen as the way the UK public are being denied a referendum.
Gold sank by almost one-tenth on the back of Gordon Brown's decision to announce his sales ahead of time.
"I was surprised they had chosen the auction method," adds Martin Stokes, a former vice-president at J.P.Morgan. "It indicated they did not have a real understanding of the gold market."
Clueless or not, however, it didn't matter. The Bank of England had no say - it only got to advise the government on HOW to sell the gold. The fact of the sale itself had already been decided by the Treasury. The Times told in 2007 that the government had defied all calls to release minutes and emails written at the time. And no-one found that the least bit suspicious? Talk about a lack of transparency in accounting!A few questions here:
1) Did anyone bother to check who the gold was sold to? Was that ever disclosed?
2) Why on earth wasn't he removed from the post of Chancellor of the Exchequer? If you did something like that in the private sector, you wouldn't ever work in the financial industry again! Any business owner reading this would agree with me.
3) Since then, it was said that the gold would be converted into euros, dollars and yen...I'm wondering if anyone has reported what percentage conversion took place? Mostly euros, I'm guessing...besides, selling that much at that time had to have a very deleterious effect on the pound sterling, and a very positive effect on the euro...the timing is almost enough to suggest an act of deliberate sedition. After all, it dwarfs even Norman Lamont's "Black Wednesday", and that would take some beating.
Here's an article from that time:
LONDON: 6 July 1999 – The sale today of the first tranche of 25 tonnes of UK gold was a disaster for the gold market with the price falling to a new low, and for gold producing countries and for Britain, said the World Gold Council.
The result of the first auction by the Bank of England was worse than many feared, said the WGC. The price of $261.20 accepted by the Government was significantly below yesterday’s market price and more than $26 below the price on 6 May, the day before the Government announced the disposal of 415 tonnes from its reserve of 715 tonnes, through a series of bi-monthly sales.
At this price the people of Britain are being ‘short-changed’ by the Chancellor by a staggering £450 million ($600 million), “ said Miss Haruko Fukuda, Chief Executive of the WGC.
This is the economics of the madhouse. We are told that these sales are simply a restructuring of the portfolio so the government can invest the proceeds in other interest-earning assets.
And finally, in the highly unlikely event of him avoiding dismissal, why was someone widely viewed as a "financial idiot" allowed to take the post of Prime Minister? Anyone else smell a vast rat here? Apart from the fetid stinking pile that already seems to surround New Labour?Here's a couple more article links for you.
Daily Telegraph May 8th 1999
The Times April 15th 2007
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