Revealed: why Gordon Brown sold Britain's gold at a knock-down price

Fella

If this was ever proven it'd make LIBOR fixing seem trivial.

http://blogs.telegraph.co.uk/finance/thomaspascoe/100018367/revealed-why-gordon-brown-sold-britains-gold-at-a-knock-down-price/

It seemed almost as if the Treasury was trying to achieve the lowest price possible for the public’s gold. It was.

One globally significant US bank in particular is understood to have been heavily short on two tonnes of gold, enough to call into question its solvency if redemption occurred at the prevailing price. Goldman Sachs, which is not understood to have been significantly short on gold itself, is rumoured to have approached the Treasury to explain the situation through its then head of commodities Gavyn Davies, later chairman of the BBC and married to Sue Nye who ran Brown’s private office.

Faced with the prospect of a global collapse in the banking system, the Chancellor took the decision to bail out the banks by dumping Britain’s gold, forcing the price down and allowing the banks to buy back gold at a profit, thus meeting their borrowing obligations.

Graham_Devon

The whole thing was totally bizzare. The annoucement that we would be selling the gold has had many questions which have never been answered.

I doubt much will come from this, but if something did come from it, christ, it would be massive!!

Certainly the way it was sold favoured everyone else but the seller.

purch

I would have thought this "blogger" should know who Gavyn Davies is.

To call him just Head of Commodities at Goldman Sachs totally undersells his position and history.

Gavyn Davies was the Chief UK Economist for Goldman Sachs, and then Chief International Economist for Goldman Sachs International for many years (not head of Commodities) and a long term member and advocate of the Labour Party.

He was an economic adviser to the 10 Downing Street Policy Unit from 1976 to 1979. He was one of HM Treasury's Independant Forecasting Panel during the 1990's (for Ken Clarke) and an economic adviser to the House of Commons Treasury Select Committee.

His links for Labour and Gordon Brown extend far deeper than just his marriage.

chewmylegoff

Fella wrote: »

One globally significant US bank in particular is understood to have been heavily short on two tonnes of gold

surely, if a bank was "heavily short" gold it cannot have been short only 2 tonnes, which would have a market value at peak of only £80 million (so a max loss of £80 million if they had short sold at £0......) - hardly enough to call into question the stability of any bank whom anyone has ever heard of...

sabretoothtigger

Announcing a scheme beforehand to sell or buy is how they do bonds and QE, the BOE buys through the market

oldvicar

Fella wrote: »

....
Faced with the prospect of a global collapse in the banking system, the Chancellor took the decision to bail out the banks by ....

Let me get this straight, Gordon Brown has saved the world TWICE, first by selling our gold and then again in the 2008 bailouts.

The man is a Saint.

robmatic

chewmylegoff wrote: »

surely, if a bank was "heavily short" gold it cannot have been short only 2 tonnes, which would have a market value at peak of only £80 million (so a max loss of £80 million if they had short sold at £0......) - hardly enough to call into question the stability of any bank whom anyone has ever heard of...

Don't let rationality get in the way of fevered conspiracy theory and speculation.

purch

chewmylegoff wrote: »

surely, if a bank was "heavily short" gold it cannot have been short only 2 tonnes, which would have a market value at peak of only £80 million (so a max loss of £80 million if they had short sold at £0......) - hardly enough to call into question the stability of any bank whom anyone has ever heard of...

I agree, but don't call be Shirley

2 tonnes equals 64,301.5 Troy Oz

at the average price Herr Broon achieved which is allegedly $275 oz :eek: that makes $ 17,682,912.50 which might have been enough to get the National Bank of Bismarck North Dakota into a spot of bother, but most "major" Banks spend that amount on paper clips each year.

sabretoothtigger

silver sterling paper clips would be nice, that'd be a good investment.

Browns argument was he bought Euros which has risen vs the pound so he did not 'lose' the headline figure in total

He'd have done better to buy australian dollars but now thats just picky

DiggerUK

Fella wrote: »

If this was ever proven it'd make LIBOR fixing seem trivial......

If this were ever proven.....What exactly is there to be proven?

I have got used to goofy theories on the net, it's a bit of a surprise seeing an august publication like the DT giving this reporter so much space.

Still, not to worry, he has apologised for sloppy research, with a mea culpa in the last paragraph.
..._

heathcote123

sabretoothtigger wrote: »

silver sterling paper clips would be nice, that'd be a good investment.

Browns argument was he bought Euros which has risen vs the pound so he did not 'lose' the headline figure in total

Isn't that a bit like losing £1000 at the roulette table & then bragging about your £50 win on the fruit machine?