Stupidity of the Reserve Bank, page-2

Interesting Anna but probably not painting a true picture. World Banks where selling gold virtually across the board at the time. If the Reserve Bank had not sold their gold, the price of gold would still have dropped. We sold our gold at over $400 an ounce at the time if I remember correctly. The US was about the only county not to sell gold and for good reason. Australia on the other hand has more gold in the ground than you can poke a stick at. So we still have "gold reserves" but it is just in the ground instead of in a vault. When it comes down to it, if we needed to, we could impose a massive gold tax or the government could commandear the gold mines (we would have to be in serious trouble and so would the whole world for anything like this to happen) but it could be done in the national interest if gold became the last fiscal bastion. A bit like the argument on foreign ownership of property here in Australia. Sure they can come and buy it but they can't take it back home with them.

People argue that it was the Reserve Banks selling of gold that killed the gold mining sector because the action showed a lack of support for the industry. The fact is that the gold price was going where it went, no matter what our Reserve Bank did. The gold sector is dependent purely on gold price so if the gold price drops anyway, the only difference for Australia is that we made a timely profit on our gold sales. If we had not sold the gold, then we would have seen 25%+ value sliced off in quick time. Now you could argue that having sold the gold at the price they did, that they could now go out and buy it back again over a period of time at current levels (or lower over the past year or two) and then continue with the revenue earning programs that the article speaks of and this might be a ripping investment over time, especially if the US karks it big time.

The US was about the only country not to sell gold stocks during the time Australia and other countries did. You have to ask the question why. From what I can tell, they are keeping it as insurance. They could force the price of gold up at any time and so if they got into really deep, brown stuff, then they could force the POG up (all they need to achieve this is simply take the beaks off, reform gold futures) and then start selling. If I remember correctly, the US Gold reserves at the time we sold where at about 3800 tonnes. So figure what that is worth.