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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: sea_urchin who wrote (21162)	6/12/2004 10:39:37 AM
From: sea_urchin	Respond to of 81811

No place for gold! m1.mny.co.za >>Central banks worldwide have trimmed their gold holdings over the past thirty-five years or so. It is estimated that, compared to the early 1970s, about 100-million fewer ounces of gold are held as official reserves; just over 1-billion ounces are now kept in central bank vaults globally. [According to some, but, besides GATA, who really knows?] Old Mutual Gold Fund portfolio manager Patrice Rassou says there has been good reason for the trend towards the disposal of gold by central banks. The collapse of the gold standard started the trend away from the use of gold as a reserve base. But the initial move was gradual, given that high global inflation during the 1970s preserved the appeal of gold as a store of value and a hedge against inflation. Rassou explains that by the 1990s, when inflation had come under control, the pace of disposal of gold picked up. The European central banks signed the Washington Agreement towards the end of the 1990s, according to which they agreed to sell 400 tonnes of gold per annum, over five years; these central banks represent about half of the world’s official gold holdings. The agreement was renewed in Frankfurt in 2004; 500 tonnes of gold will be sold over five years. “The gold bulls suggest that, since central banks have already sold off a great deal of gold, and judging by the public pronouncements by some central bankers, they may opt to sell less than their quotas”. These same gold bulls suggest there is reason to believe that the Asian central banks could opt to raise their gold holdings. Where the European central banks hold about 30%-40% of their reserves in gold, the Asian central banks typically hold under 10% as gold. As these Asian economies have trade surpluses, they are accumulating rising quantities of dollar reserves. Some say from a risk-diversification point of view it may make sense for these central banks to switch some of their cash to gold. However, Rassou says the reality is quite different from the bullish speculation. “These central banks have not been building up their gold reserves and clearly continue to prefer cash. Based on the data available to the public, we know there is an overall trend towards fewer gold reserves”.<<

To: sea_urchin who wrote (21162)	6/12/2004 10:58:36 AM
From: philv	Read Replies (1) \| Respond to of 81811

I don't know if this was posted before. Now France wants to sell 500 tons of gold, part of a plan to sell assets to pay off debt etc. Gold is considered as unnecessary I guess, and this from a country whose action of demanding payment in gold, cause Nixon to close that window. All nations are selling, and in Europe, the Bundesbank has exactly the same proposal...500 tons. Schroeder needs money to pass around and make brownie points for the up coming election. Here's the French & German links. signonsandiego.com quote.bloomberg.com Btw. 120 tons of gold for Chinese reserves (15%) seems inordinately low, considering their enormous growing reserves, but I haven't done the math. Even for the Europeans, especially the French & Germans who were once staunch supporters of some gold at least, one has to conclude that they have taken the view that gold is simply a very limited hedge against a catastrophic event, and that the real game is in the paper money printing. It is a lot cheaper to print a billion dollars, than to go out and mine a billion dollars worth of gold. If you were a printer, (like all C.Bs.), which would you do?