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« The US Dollar breaks the 200dma | Main | Yamana Gold Incorporated Up 4.26% Today »

Central Banks $40 Bln Poorer on Gold Sales

Pathetic is an apt word to describe the way that central bankers followed each other like sheep to give away their gold reserves in order to buy interest bearing paper. Where are these decision makers now? Still in power considering whether or not to sell more gold.

The posted this article on the subject which sums up the situation pretty well:

Europe’s central banks are $40bn poorer than they might have been after they followed a British move taken 10 years ago on Thursday to shrink the Bank of England’s gold reserves, analysis by the Financial Times has shown.

London’s announcement on May 7 1999 that it would sell a large share of the Bank’s gold reserves in favour of assets offering a return, such as government bonds, was the high water mark of so-called “anti-gold” sentiment among European central banks.

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. At that time, gold was worth around $280 an ounce, less than a third of its current level of more than $900.

European banks sold about 3,800 tonnes of gold, reaping about $56bn, according to calculations from official sales data and bullion prices.

Taking into account the likely returns from the investments in bonds, the banks have gained another $12bn. But because today’s gold prices are far higher, they are about $40bn poorer than if they had kept their reserves.

As a Brit I was gutted to see the UK become poorer by around $6bln but the Swiss take the biscuit as they are $19bln poorer having sold around 1,550 tonnes of gold.

After 10 years of steady sales, Europe’s gold sales are set to slow to their lowest levels since 1999, while central banks outside Europe have already become net buyers of gold. The US, the world’s biggest holder of gold, decided not to follow Europe’s move. Germany and Italy are the only two big European central banks which did not follow the UK, mostly because of domestic disputes about what to do with the proceeds.

The Americans did not follow the herd however there is some doubt that they still have all the gold they purport to have according to such as organizations as GATA, time will tell.

Have a good one.

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Reader Comments (5)

"Central Banks $40 Bln Poorer on Gold Sales"

What a ridiculous way to say it!!! How about "Citizens of the countries now controlled by the Central Banks are now $40Bln Poorer"...??? Or much more accurately "Central Banks Rob Citizens of $40Bln Thru Gold Sales."

The fact is that thru those sales the money/wealth of the citizens (ie, paper money) lost value. The CBs didn't lose any, they just printed more to make up the difference and they are always the first to spend no skin off their teeth!

Fiat currency and selling of gold has been and always will be a conspiracy of banksters to get rich thru ripping off the citizens of the country thru their connivance with greedy govts who like and become addicted to the printing press smack offered them by the CBs. At core the CBs are traitors, or more accurately, enemies of the State, and thus of its citizens. The real traitors are those in govt who allowed the enemy in to economically rape and rob its citizens it swore to protect. Until the CBs are removed from their positions of power, nothing will change. jt

May 8, 2009 | Unregistered Commenterjt

That is another example of individuals in the wrong jobs.

But, we, here in the US sad to say, shouldn't gloat or talk either, our Congress is riddled with many who are dumb and dumber in many other ways. The future, most likely will tell things that we would rather not hear.


May 8, 2009 | Unregistered CommenterJohn Ell

Are you kidding??!!!!...our central bank and banksters are even worse!!!! They're flat out liars and enemies of the American people. At least it would appear that the CBs of Euroland have let people know when they're selling (at least some part of it). IMO and many others, our own has been leasing out and selling our own supposed stash in Ft Knox for years SURREPTIOUSLY!!! Which is why they have not allowed an indpt audit of the supposed gold there.

All the while they've played the innocent stating how they haven't sold any, yet suppress the price (now absolutely blatantly) on the COMEX, ie, CRIMEX to keep the appearance of value of the FRN, the Fedl Reserve Note, aka the Dollar. I think the Banksters in this country, the US, are the WORST of the worst of these criminals...jt

May 8, 2009 | Unregistered Commenterjt

our finance minister here in canada has also sold all our gold (the brilliant paul martin) did it.

May 8, 2009 | Unregistered Commenterpierre lebeuf

Ok, jt, but it really is sad when we think about it. We own all of it and yet we allow these scoundrels who supposedly work for us and are paid by us, we allow them to refuse to give us the information we want.

On the other hand, isn't it all our fault? These derelicks have been resurrected and appointed to important jobs.

I guess we get what we deserve.


May 8, 2009 | Unregistered CommenterJohn Ell

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