Gold sales cost Europe's central banks $40bn
By Javier Blas in London
FT May 6 2009 23:31
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. (...) 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. (...) The UK Treasury on Wednesday defended its
decision to sell gold as a way to diversify reserves and cut risk. "As a
result of the programme, a one-off reduction in risk of approximately 30 per
cent was achieved," it said.
http://www.ft.com/cms/s/0/433a92b4-3a67-11de-8a2d-00144feabdc0.html?nclick_check=1
"Thirty percent one-off reduction in risk"? It's about as meaningful as 30
"utils". With 40 billion euros, you can pay a year's wages for probably a
million fulltime and parttime workers...
J.
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Received on Thu May 7 08:40:39 2009
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