Sunday, April 15, 2007

Fools Gold, how Gordon Brown flogged of the gold reserves against advice

I am not quite sure what the story is here.

It was clear at the time that the way the gold reserves were sold off were not that clever. Well according to this article in the Sunday Times, Gordon Brown was warned in a note of a meeting he couldn't be bothered to turn up to that selling the reserves off then was mad, as it was the bottom of the market and even if you did want to sell it off, you would do it quietly so as not to depress the price further.

The advice was ignored. What a surprise!


Is that the story? Well yes to some extent it is, but there is a bigger picture. In fact arguably speaking there are two. The first is Gordon Brown's history coming back to haunt him, and then there is a paper in the Murdoch stable, albeit more editorially independent than the rest going for Gordon Brown's jugular.

As Iain Dale observes, there is "More Trouble at't Mill for Gordon Brown"


Mark Senior said...

The issue to me is not so much whether GB sold at the bottom of the market but whether he used the money raised by selling the gold to benefit the whole economy rather than let it sit in B of E vaults increasing in paper value as the price of gold rose .
To take a perhaps parallel example . The Conservatives sold off a large percentage of council house stock not only at the bottom of the market but at a discounted price off that bottom price . If they had not done so councils would now own housing worth many billions more than it was in the early 80's and be in a much healthier financial position .

Benedict White said...

Mark,The fact is that he sold it in a way that caused its price to be lower than it otherwise would. It was also sold at the wrong time so lost money.

On the council house issue, I know that you are a romantic old trot, but your argument does not stand up.

For a start, council houses were sold in a rising market not at rock bottom. Secondly they were sold to their residents, allowing them a leg up.

Then is this is the key issue that kills your Trotskyite argument, an asset is only of any value IF YOU CAN SELL it.

Councils which have sold their houses have the money in their bank accounts as opposed to having a liability for maintenance of the houses.

So if your argument is that if they still had things they could not sell so could not realise, that they would be in a better position than if they had realised them for cash, it does not make any sense.

That said I am not surprised that you support Brown on this issue. After all it is a case of vote Liberal Democrat get Labour.