I'd prefer to stay on topic,(I've rearranged the paragraphs but its still the same article)
The paper justified the decision to dramatically reduce the bank's holdings by arguing that gold had been a poor investment, and that Australia need not worry about access to financial markets during another economic crisis.
A board paper recommending the decision to sell conceded that gold served as "insurance against a breakdown in the international financial system", but it then dismissed the need for holding this valuable asset.
The paper also said Australia need not worry about selling the assets because it had vast reserves of the commodity, yet the latest figures from Geoscience Australia show that known reserves will be exhausted with 30 years.
The RBA paper noted at the time that gold holdings in the US and Europe remained high, with the US holding 75 per cent of its reserve assets in gold.
The paper argued that continuing development of financial system meant that circumstances which would require Australia to call upon our gold holdings for economic reasons looked increasingly remote.
This last paragraph was/is extremely ironicly prophetic.
Cue the low dot loans and the Credit Default Swaps. It would appear Peters tapestry of credibility here is unravelling before our eyes,for those not blinkered to see it.
So the Treas looked at gold as both an investment and an insurance policy,so he sold it. What was/is the better investment that the RBA should be in now?, mindboggling. Worse than just selling,he sold because we could dig plenty more up if we had too,what happened to a bird in the hand is worth two in the bush?. If we'd had to dig it up,it would have created a bubble and guess what it would have cost more,wheres the logic? Really this from a conservative poltician mindboggling. But not only content to dig up some gold just lying around the place,Peter was happy to tap the overseas markets in case bad times befelled us,at what rates Peter?,mindboggling. He was happy to do all this knowing other countrys were holding on to their gold. And it doesnt end there Peter was happy in the knowlwedge that some future financial instrument as then unknown would come to our aid,when the exact opposite occured in the name of the Credit default swap.
Any which way you cut it,Peter was/is found inadequitly wanting in the is monumental ballsup.
Exposing our country to great risk from the GFC puts into perpectve what Rudd did to keep the country on an"even keel",oh no Peter to much risk associated with you.
