Monday, May 25, 2009
Gold and Central Banks
"Europe's central banks are $40bn poorer than they might have been after they followed a British move taken 10 years ago today to shrink the Bank of England's gold reserves, analysis by the Financial Times has shown. ... Many of these banks, such as those in France, Spain, the Netherlands and Portugal, decided later in 1999 to follow Britain and sell off their reserves. ... European banks eventually sold about 3,800 tonnes of gold, reaping about $56bn, according to calculations from official sales data and bullion prices. ... The biggest loser in the Swiss National Bank which sold 1,550 tonnes over the decade and at today's gold prices is $19bn poorer, followed by the Bank of England, which is $5bn poorer. ... However, central bankers are confident that over the long run their move out of gold and into bonds will pay off and reduce the volatility of their portfolios, people familar with their thinking said", my emphasis, Javier Blas at the FT, 7 May 2009.
I'll say again, "Got gold? Get more. Got bonds? You fool"! What morons these bankers be. They sell an asset they cannot make, gold, for one they can, bonds.