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Politics : Canadian Political Free-for-All -- Ignore unavailable to you. Want to Upgrade?

To: E. Charters who wrote (2273)	3/27/2003 5:20:39 PM
From: SofaSpud	Read Replies (1) \| Respond to of 37204

This is because they spend way too much of your money. I couldn't agree more with that. Further, it's true that the money was not necessarily re-invested in Canada. But I can verify that, at least on my brief watch helping to implement the sales program, proceeds were indeed placed on deposit and at competitive negotiated interest rates. No, the reserves aren't there for debt, but that doesn't prevent gains on reserves being booked against the debt. I can't speak to what's gone on in the dozen years since I was involved, but it's a published fact that reserves today are US$35 billion (http://www.bankofcanada.ca/en/reserves.htm) vs. less than $10 billion back in the late 80s. Yes, there was publicized borrowing to bolster reserves, like the knock-out they delivered in '86 that whalloped the shorts. But as we've learned with the administration of the UIC account, it's all bookkeeping. The gold reserves were liquidated. What actually happened to the money -- whether it paid for the fountain in Shawinigan or the Transitional Jobs Fund -- is irrelevant. The question was "should we have sold the reserves". My answer was that, given today's gold price and the prices at which gold was sold over the last 20 years, liquidating the asset resulted in a greater return if invested. If you want to argue that the money was pissed away, fair game -- I won't disagree. If you want to argue that the gold should not have been sold because the government can't be trusted, again, fair game. But from the standpoint of strict, prudent economics, the liquidation, to this point in time, was defensible.