So on the RBA website is this document which outlines the basis for the sales of gold reserves back in 1997. http://www.rba.gov.au/foi/disclosure-log/pdf/101110.pdf Surely this 7 pages of "analysis" wasn't the sole basis for us selling 167 tonnes of our gold? Has anyone looked at this issue before?
Most of it makes sense given the sentiments of gold in 1997. Wasn't gold like the whipping boy of bad investments in the 90s? Imagine if they accumulated more gold instead of selling it off.
From http://goldchat.blogspot.com.au/2011/01/reserve-bank-of-australia-gold-sale.html Further to The Australian's 11 January article "Reserve Bank's gold sale cost us $5bn", I thought my readers may be interested in the then Perth Mint CEO's response [link to doc http://www.scribd.com/doc/47066031/...Aug-1997-Reserve-Bank-of-Australia-Gold-Sale] to the 1997 sale. Consider these quotes: "It is important to remember that we are evaluating gold now in a low-inflation environment, in which other financial assets are currently performing extremely well, the most important of which is the stockmarket. However, current conditions are not going to last forever. In my experience, in the long term, politicians cannot help themselves. When they are faced with a really tough decision, such as the one creeping up on them now - that of how to create jobs - they will take the easy option and let inflation go." and "When the crunch comes, governments will want to be re-elected. Rather than take the tough decisions, they will turn the inflationary tap back on. For that reason, I believe that gold will again have its day. I have not lost faith in gold." The foresight of these statements come from the fact that Mr Mackay-Coghill worked for International Gold Corporation (Intergold) from 1971 to 1986. Intergold represented South African miners in the production and selling of Krugerrands and Mr Mackay-Coghill was responsible for the introduction of the Krugerrand to world markets in his role as CEO of Intergold.
Imagine the colossal amount of flak they would have had to weather, but the foresight..wow..fast forward to now and holding double or triple the tons they sold off - they would have been heralded as financial magicians! oh well. Live and learn - you'd hope.
Nope, but I should have thought of it myself. You do have to put yourself in the mindset of the 90s to understand where they were coming from.
Yes - as they say hindsight is 20/20. However, i would hope there was a bit more rigour around the decision making process than the 7 pages in the document i referenced. A first year uni student could've put something more thorough together.
History doesn't exactly repeat itself, but it sure rhymes Fast forward to 2012: the people who haven't got short memories will recognize the present opportunities for accumulating more physical gold*. cue *Status Quo song being flogged to death by a certain national supermarket chain extolling their low prices :lol:
Accumulate more... with what money exactly? ... On the topic of selling gold, there has been talk elsewhere that the gold was sold on the behest of the IMF. Brown's Bottom too. It involves more than the spectre of inflation and some kind of investment return - it was a strategic selloff, linked to oil I believe. I won't waste any more time discussing it though.
