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The UK still holds about 300 tons of gold.
I f Cameron had sold it at the height of the market he would have netted around £7.5 billion more than if he sold it today so by not selling our gold Cameron has lost about 3 times as much as Brown did.
As Cameron didn't need to sell it, and didn't sell it, how could he have lost anything, let alone 3X as much as Brown? That's nonsensical.
That's pretty much why it's pointless governments holding such a speculative commodity as gold.
Countries don't hold gold as speculative anything, but as a solid, always-in-demand asset for when times get tougher.
Tman wrote:Countries don't hold gold as speculative anything, but as a solid, always-in-demand asset for when times get tougher.
A precautionary reserve asset held for intervention purposes whose price is likely to fall the instant it is used to intervene is singularly pointless.
But it's also used as tangible proof that loans taken out (possibly to stabilise a failing/falling currency) can be repaid at some point.
The Americans (for example) were quick to suck every last carat of gold they could out of GB during WW2, (before they started on loans, territorial treaties, intellectual copyrights etc etc) as it's literally, the gold standard.
Yep the Americans got us over a barrel with that one, in spite of all tgeir homilies and apple pie, they are a bunch of ruthless capitalist screwing the last cent out of everybody including their own citizens.
They became rich on the backs of the Europeans especially the UK with loans being repaid and their products being paid for with those same loan money as their factories were intact after the war .
They also dominating the world being extra jurisdictional wit their laws, commercial interest and tge American golden era 1950s -1980s was funded by all that.
As Churchill said "no such thing as common alliance only common interest"
Rant over.......
Six of Nine loves Seven of Nine, together in Electric Dreams.
Tman wrote:But it's also used as tangible proof that loans taken out (possibly to stabilise a failing/falling currency) can be repaid at some point..
It's an interesting but outdated point.
The Bank of England has been buying up UK debt in the form of gilts using quantative easing since 2008, at the moment it's around 30%, this is primarily what's causing the falling currency, if a country simply prints money to buy back its own debt the gold reserve becomes utterly pointless.
The "gold standard" became obsolete in the early 70s, most countries that are running a deficit are offloading gold at the moment simply because it's become a volatile, cumbersome commodity, too difficult to trade in any serious amount at short notice. The only exceptions are countries who are running huge surpluses looking for a touch of the old imperial status.
Seeing as many/most countries in the world keep gold reserves maybe you'd better email them and tell them their gold is "cumbersome" then. Perhaps they need a postie to put them straight?
The bottom line is that when the going gets really tough, loans, gilts bond, quantitive easing, longs, shorts, FTSE top 100, Dow Jones are all toilet paper, and gold is what works....the only thing that works.
Tman wrote:Seeing as many/most countries in the world keep gold reserves maybe you'd better email them and tell them their gold is "cumbersome" then. Perhaps they need a postie to put them straight?
My job title is irrelevant, I can read.
All of the top 10 "gold holders" have reduced their gold as a percentage of foreign reserves including the IMF, some have directly offloaded and some have increased the amount of "paper money" as you call it but at the end of the day the fact is the relevance of a lump of yellow metal is declining as far as governments are concerned, that doesn't mean it's not valuable just that in the 21st century it's not a flexible enough monetary tool to have much use, it's a weapon of last resort and unfortunately by using it you're signalling to the vultures that you're desperate which obviously means it's immediately worth a lot less.
Tman wrote:Seeing as many/most countries in the world keep gold reserves maybe you'd better email them and tell them their gold is "cumbersome" then. Perhaps they need a postie to put them straight?
My job title is irrelevant, I can read.
All of the top 10 "gold holders" have reduced their gold as a percentage of foreign reserves including the IMF, some have directly offloaded and some have increased the amount of "paper money" as you call it but at the end of the day the fact is the relevance of a lump of yellow metal is declining as far as governments are concerned, that doesn't mean it's not valuable just that in the 21st century it's not a flexible enough monetary tool to have much use, it's a weapon of last resort and unfortunately by using it you're signalling to the vultures that you're desperate which obviously means it's immediately worth a lot less.
If I'd had $100 dollars worth of gold in 1900, and $100 in fiat - today the gold would be worth about $10,000, whilst the $100 would be worth about $5.
Thats why gold matters.
Tman wrote:Seeing as many/most countries in the world keep gold reserves maybe you'd better email them and tell them their gold is "cumbersome" then. Perhaps they need a postie to put them straight?
My job title is irrelevant, I can read.
All of the top 10 "gold holders" have reduced their gold as a percentage of foreign reserves including the IMF, some have directly offloaded and some have increased the amount of "paper money" as you call it but at the end of the day the fact is the relevance of a lump of yellow metal is declining as far as governments are concerned, that doesn't mean it's not valuable just that in the 21st century it's not a flexible enough monetary tool to have much use, it's a weapon of last resort and unfortunately by using it you're signalling to the vultures that you're desperate which obviously means it's immediately worth a lot less.
If I'd had $100 dollars worth of gold in 1900, and $100 in fiat - today the gold would be worth about $10,000, whilst the $100 would be worth about $5.
Thats why gold matters.
That's because you're not a government.
The conversation was about whether gold reserves have any real value as a monetary intervention tool, a usable reserve asset or whether it's just become another speculative commodity. In order for it to be used in the old fashioned way Tman likes it has to be undervalued when you do the country's "books" otherwise you overestimate its potential to get you out of a hole. Like every commodity its only value is what someone else is willing to pay, that's why although China has been buying gold lately it only makes up a tiny 1% of its reserves.
Tman wrote:Seeing as many/most countries in the world keep gold reserves maybe you'd better email them and tell them their gold is "cumbersome" then. Perhaps they need a postie to put them straight?
My job title is irrelevant, I can read.
All of the top 10 "gold holders" have reduced their gold as a percentage of foreign reserves including the IMF, some have directly offloaded and some have increased the amount of "paper money" as you call it but at the end of the day the fact is the relevance of a lump of yellow metal is declining as far as governments are concerned, that doesn't mean it's not valuable just that in the 21st century it's not a flexible enough monetary tool to have much use, it's a weapon of last resort and unfortunately by using it you're signalling to the vultures that you're desperate which obviously means it's immediately worth a lot less.
If I'd had $100 dollars worth of gold in 1900, and $100 in fiat - today the gold would be worth about $10,000, whilst the $100 would be worth about $5.
Thats why gold matters.
That's because you're not a government.
You mean "Thats because you can't print your own money" ? LOL - yes, thats true.
Fiat money is starting to look suspiciously like a ponzi scheme - and we all know what happens to those in the end. At which point, people (and Governments) are going to start looking for somewhere solid as a store of value and for wealth preservation.
Thus, beginning in 2010, "central banks around the world turned from being net sellers of gold to net buyers of gold.....Not every top bank is a net buyer. The Bank of Canada has liquidated close to all of its gold, mainly in coin sales, while Venezuela is in the process of doing the same to pay off its debts, but most of the world’s central banks right now are accumulating, holding and/or repatriating the precious metal."
Its worth noting also that " this global gold-buying spree coincides perfectly with the rise of unconventional monetary policies following the financial crisis—massive bond-buying programs, rapid money-printing schemes and near-zero or, in some cases, negative interest rates."
with Russia and China accounting for most of the activity
If you take those two "unique' economic models out of the equation both as I pointed out running surpluses and buying up gold like chav lottery winners you're left with a different picture. Even in the case of China they've actually reduced their gold assets as a percentage of their overall portfolio, down to around 1%.
fishtank wrote:... in the 21st century it's not a flexible enough monetary tool to have much use ..
Well - we can agree on this much at least.
So say hello to digital gold - otherwise known as Bitcoin. It allows me, if need be, to transfer value across the world at (almost) zero cost anonymously. And, like gold, is a great hedge against central banks money printing exploits/fiat devaluation.
Its no coincidence perhaps that the Chinese are the largest buyers of this asset also.
Bitcoin, thats been reported as crashing a fair bit this year, and eventually the Chinese Miners may have a Thatcher moment.
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TrueBlueTerrier wrote:Bitcoin, thats been reported as crashing a fair bit this year,
It was at $433 on 1/1/16 and as I speak its at $636. Thats 47% up.
It often gets bad publicity when there is the bitcoin equivalant of a "bank robbery" - but the actual impact on its price is becoming less and less.
TrueBlueTerrier wrote:..eventually the Chinese Miners may have a Thatcher moment.
Yeah - I hear what you are saying.
But thats the beauty of a decentralised distributed ledger. Its a very very resilient network. You are never going to shut it down - it'd be like trying to shut down the internet.
BTW TBT - you ought to set up a bitcoin wallet so that you can generate a bitcoin receive address for donations to this site. I once made this suggestion on another forum but no-one seemed too interested. It was a few months prior to the price exploding by 12x !!
Shoulda listened
In fact - to get the ball rolling, I'll donate a few quids worth myself. I can't say fairer than that.
You never lose on gold ever, it does go up and down as the market dictates, in the long term its always a gain, as people have confidence in the value of it, thats how currencies work, if people believe in it, then it has value, the British pound is usually a good bet as the Government has never failed to pay its Bonds, that has value, when the Zimbabwe dollar was eroded by hyperinflation its because people don't trust its worth and therefore has no value.
Its human nature, Gold always had value because people believe its worth.
Given the option I would choose bullion of gold instead of notes for that reason as I know it will increase in worth.
Six of Nine loves Seven of Nine, together in Electric Dreams.
