ITR - Mr. Brown Who Bought Our Gold - Who Has It Now? InTouchRadio.net UK GLOBAL Distribution Network ITR-UK

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"So Mr. Brown Who Bought Our United Kingdom Gold?

Who Owns It Now?

Who Benefited From That Sale?

What is Paper & Tin Money Worth?

Who Guarantees the Money in Our Currency Against the Gold Standard?

I Promise to Pay The Bearer...!"


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UK

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Telegraph

Brown to Sell Half UK Gold Reserves
By George Trefgarne and Robert Shrimsley

Saturday 8 May 1999

GORDON BROWN was accused last night of trying to take Britain into the European single currency by stealth after surprising the City with an announcement that he was selling more than half of the country's gold reserves, leaving Britain the lowest bullion holdings of any major country.

The £4 billion of gold reserves - 415 tonnes - will be converted into euros, dollars and yen over the next few years. The sale will see the proportion of reserves held in gold falling from 17 per cent to 7 per cent. The Chancellor's announcement triggered a fall in the price of gold and provoked Tories and Euro-sceptic businessmen to claim the decision was politically motivated to prepare Britain's entry into the euro.

Their suspicions were fuelled by the timing of the announcement on a Friday afternoon when most MPs were away from Westminster and news coverage was dominated by the outcome of the elections for the Scottish Parliament, Welsh Assembly and English local councils.

The Treasury issued a bland, three-paragraph statement, saying the sale was intended to achieve "better balance" in Britain's reserve portfolio by increasing the percentage held in currency rather than gold but gave no suggestion that the move was linked to preparations for the single currency. Sources in the gold market claimed that Mr Brown had acted against the advice of Eddie George, the governor of the Bank of England, but this was denied.

The City greeted the news with dismay. Haruko Fukuda, chief executive of the World Gold Council, said: "This is a political decision, in preparation for joining the euro. This move appears to be pre-empting the promised referendum. Gold has special characteristics. It has been held as a reserve for thousands of years. Its value does not rely on anybody else's promise to pay, unlike cash, and it builds public confidence."

Francis Maude, the shadow chancellor, said: "Gordon Brown is trying to drag Britain into the single currency by stealth by making it appear inevitable. This could be another step along that road. It is time Gordon Brown started running the British economy in the interests of Britain and not in the interests of Europe."

After the sale, Britain will hold just 300 tonnes of bullion - a minimal amount when compared with other major economies. Around 40 per cent of the gold will be converted into euros; the same amount into dollars and the remaining 20 per cent into yen.

The sale of the reserves was seen at Westminster as a further attempt by the Treasury to bring Britain's economy into line with those states already signed up to the single currency. The Chancellor has made no secret of his desire to get Britain into a position where it can join the single currency early in the next Parliament - probably by 2002 - with the minimum of financial upheaval.

The European Central Bank, which adminsters the euro, has been encouraging those countries in the single currency to sell some of their huge gold reserves. It believes gold is a bad investment. The price peaked at $835 an ounce in 1980, but it has been struggling along at around $300 for the last 10 years. Yesterday, the price dropped sharply from $289.25 an ounce to $282.40 (£178.70).

However, a spokesman for the Treasury said: "This has nothing whatever to do with joining the euro. It is about efficient asset allocation within the foreign exchange reserves." The sale, to start next year, will bring to an end the Bank of England's 300-year-old practice of holding gold as a significant part of Britain's foreign exchange reserves.

A spokesman for the anti-euro group Business for Sterling said: "Since we know it is a political decision and we know that the European Central Bank has said that countries that want to join the euro have to sell off their gold reserves, it looks like another part of the Government's stealth policy."

Times

April 15, 2007

Brown Lost £2bn Selling UK's Gold

Robert Winnett and Holly Watt

GORDON BROWN is to face questions in parliament after revelations that he disregarded advice from the Bank of England before he sold off more than half the country’s gold reserves at the bottom of the market.

Insiders involved in the decision have broken ranks after an 18-month battle in which the Treasury has blocked attempts by The Sunday Times to make public the official advice received by Brown before he sold the gold.

They have revealed that Bank of England officials had serious misgivings over the chancellor’s determination to sell 400 tons of bullion in a series of auctions between 1999 and 2002, when the price was at a 20-year low. Since then the price has almost trebled, meaning the decision cost the taxpayer an estimated £2 billion.

This Tuesday the chancellor will face a Commons grilling over the affair as the Tories seek to undermine his reputation for economic competence.

BBC World News

13.06.2008

Potential Cost of Gordon Brown's Gold Sale was £3bn, Reveals The Money Programme

As the price of gold reached its peak value in March 2008, former Chancellor Gordon Brown's decision to sell over half of the UK's gold reserves in 1999 has now potentially cost tax payers around £3billion, reveals The Money Programme today on BBC Two at 7.00pm.

The cash invested from the gold sales doubled, but gold turned to be an even better investment as its price has quadrupled over the last ten years.

In March this year gold reached a $1,000 an ounce for the first time in history.

Had the gold been sold at its highest price in March, the UK would have been around £3billion better off – that's almost £50 for every man, woman and child.

Philip Shaw, Chief Economist, Investec, tells the programme: "The Bank of England decided to invest the proceeds of the gold auctions in safe instruments, mainly government bonds from the rest of the European Union, the United States and Japan."

Looking at how Gordon Brown's strategy fared, Shaw continues: "The 17 gold auctions netted the Exchequer around three-and-half billion dollars".

"Now the proceeds were well invested in Government Bonds. The value approximately doubled to around seven billion dollars.

"Had Gordon Brown decided not to sell the gold and sold at the peak earlier this year, the Exchequer would be better off to the tune of around three billion pounds."

In 1999 the Chancellor Gordon Brown told the Bank of England to sell off some of the country's gold and over the next few years it sold 395 tonnes, over half of the UK's reserves at a time when gold value had been falling in price.

After Brown's announcement its value fell to its lowest for 20 years.

Pierre Lassonde, Chairman of Franco Nevada Mining, says: "Well, Gordon Brown came and said 'Well, yep, I'm going to be selling gold' so the market just caved in and the market went down to $250. And it could not have been worse handled at that point in time. And, but did he pick a bad time to sell gold? He picked the right bottom."

Following sales by the UK and other central banks, the Central Bank Gold Agreement was created in 1999, limiting the amount of gold a country could sell in any one year.

Shaw explains: "There are a number of reasons why central banks decided to sell large proportions of their gold reserves.

"I think firstly we're not in a gold exchange standard, therefore, some of the traditional resources for holding gold have disappeared. Also gold is a volatile instrument in terms of its price."

Shaw adds: "The way the central banks make money with gold is simply if the gold price appreciates. There is no dividend on gold as there would be with a stock nor is there a coupon on gold as there would be with a government or a corporate bond."

The Treasury told The Money Programme: "The programme was part of a restructuring of the foreign currency and gold reserves, aimed at achieving at better-balanced portfolio.

"A reduction in risk of approximately 30 per cent was achieved."

The National Audit Office concluded that the Treasury had met its objectives selling in a "transparent and fair manner while achieving value for money".

They also added that: "Other central banks around the world have adopted similar policies."

Notes to Editors

Any use of the above should be credited to The Money Programme: Gold Fever!, 7.00pm, BBC Two, Friday 13 June 2008.

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