Australia is the worlds second largest producer of gold after China. Costello decided to sell a great percentage of Aust gold reserves leaving a puny 80 tonnes believing gold to be a poor investment at the time & converted the sales into US bonds which has cost the country 5 billion in unrealised profits. It would seem like a simple fix to me based on the current production of approx. 250 tonnes PA the government would decree that all gold produced will be purchased & held by the RBA to increase Australian reserves with no royalties payable to encourage production. The motivation would be to protect the economy from global financial meltdown, support the Aussie dollar & increase the price of gold by reducing global supply. This is effectively what China is doing right now so can Australia afford to rely on a fiat based economy with only 30 years of below ground reserves estimated to remain available?
I can fell the exporters cringeing as I type :O Seriously though great idea, he who has the gold makes the rules
With socialists and communists running the country and all politicians too short sighted or just too stupid to plan for anything more than 6 months ahead - you are asking way too much. My suggestion is that you get some of that Australian gold for yourself and hang on.
1. Expand Mining Tax to include gold. 2. Allow producers to pay their tax in gold at current market rate. 3. Miners get effective tax discount on the difference between cost of extraction and spot price. 4. Stockpile the gold received for a rainy day.
1. Ah the socialist at it again looking for more than his fair share of 30% for which he did nothing of value to deserve. 2. Fantastic idea I brought this up in a different way recently, was discussed at length..
Cheers yeah Ronnie working on that most of my stash is a silver colour right now. In reference to your early comments I'd like to add that Australia is also the worlds largest exporter of gold & surely that deserves a national reserve of some proportion?
Theres no way Australia will increase reserves, one reason mentioned above about government being stupid and short sighted. Another reason is that if they announced such a plan, it would take a big chunk out of the gold market resulting in further price increase. The US will apply 1/2psi of pressure and the Aust. Government will fold.
I remember. It was a good discussion. There is still the problem of where the gold comes from. Either we buy it for cash, in which case we have less cash to spend on other stuff, or we take a greater percentage of what comes out of the nation's soil which, at the moment, is quite low considering the non-renewable, once-only nature of the resources.
OR we curb slightly the lending requirements of the banking system so they create less new currency in circulation each year and make up the difference with RBA created money which is spent directly buying the gold from the miners. All without, stealing more of someone else's money without working for it or risking capital to obtain it..... Such a situation is still evil as the general population still get fleeced of their purchasing power. At least this way, the nation as a whole has something to show for it.
When the gold runs out the Uranium mines will open (Australia having approx 30% of the worlds supply still in the ground) and wooohoo Australian miners (and government) are rich again !
Unless we can find a way of turning gold into fissionable material to make an A-Bomb... having large gold reserves just makes us a more vulnerable target....not stronger.
It wasn't Costello who sold the gold it was the RBA following the lead of most of the other RB's around the western world.
That's like saying Gordon Brown didn't sell England's gold in 1999. Costello authorised the sale that was made in 1998 so actually preceded Brown's gold sale. http://www.australian-gold.com/blog/the-australian-revisits-the-costello-curse/ Who did Costello follow, other than the directions of the US embassy that is? That was 167 tonnes he sold, or 5,369,175 troy ounces, leaving the RBA with just 2,572,060 troy ounces (80 tonnes) that are held in London. What do you think the chances are of that gold ever coming back to Australia are? I would love to see it, but when a population is prepared to define affordability by the amount of credit a third party is prepared to lend them, then the chances of Australia stocking u pon Gold before a catastrophic fiancial event forces the issue, is simply zero. They are more likely to do nothing and then just steal what they need from those who have it, justifying their actions as in the best interests of the collective.
It's the RBA, so we do the unthinkable & materialise the cash then we borrow against the gold reserve & at the same time the reduced gold supply drives the value up offsetting the original cash loans we've already used to bolster national security etc.
The whole nation owns the natural resources too. How is realising their value in the form of a tax as they're extracted different from realising their value by devaluing the currency used to purchase them on the open market?
Personally, I'd like to see all the money spent on BS Government advertizing stopped! Expensive government advertizing like...Broad Band roll out, Kiddies back to school bonus, Quit smoking Now, and all the other BS adverts that waste money. Just take the BS advertizing budget off The Federal and State governments and convert it into Gold Bullion! We'd have tonnes of "Yellow-Shiny" in no time at all!
Costello approved the sale not authorized it, what Costello agreed to was the RBA avoiding CGT http://www.abc.net.au/unleashed/3812398.html
Currently, the devaluing of the currency is happening and we have bugger all gold reserves to show for it. The idea i had was not necessarily to change the rate of devaluation (which may be offset in reality if large holding of gold is accumulated) but instead print and exchange but restrict the banks in creating by the same amount. So the tax on profits would still be made as usual to the government and they get to spend it. The remainder gets deposited into the ponzi banking system and life goes on. However, China is not hoarding 250t a year we are.
To add to my last. I like this idea for a couple of reasons. I believe in the next decade there is going to be some massive changes to the worlds monetary system. The US reserve currency can't survive much longer than this. Gold is going to play some role in the set up of the aftermath. Countries with significant holdings like the US, Germany, Italy and China are going to get a much larger seat at the table when these discussions are being held. Also, we are allowing China to remain ultra competitive with the west through thier currency manipulation. Their superior productivity is only part of the reason they are running huge trade surpluses. Them printing paper is allowing them to gain extra advantage and extra reserves. They are spending these reserves on tangible assets such as gold. Why let them take our gold and give us back useless paper? Especially when we can play the same game to at least keep our own gold. Also if every ounce of gold mined in Aus remains in Aus. It surely has to have rocket style effects on the gold price. Making our in ground reserves that much more valuable.
As a start we need the future fund to divest itself of its US treasuries and buy up our local gold production (preferably to be held locally). As AUDUSD increases (and it will regardless of interest rate reductions and/or Aussie Bond sales at the rate the US is printing, bar a collapse in iron ore/commodities prices) we get great value from the trade.
