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The 1999 Bank Bailout

July 7, 2012

Why did Brown sell the majority of Britain’s gold reserves for a knock down price?

Answer according to the Telegraph: to bail out banks which had been short selling gold, see, http://blogs.telegraph.co.uk/finance/thomaspascoe/100018367/revealed-why-gordon-brown-sold-britains-gold-at-a-knock-down-price/

Would the Tories have done the same – probably.

If the 400 tons of gold were sold at an average price of $276 per ounce and gold price is now $1615 then if we had not sold it we would be $17 bn better off – (neglecting interest).

But were any global banks really in trouble. The article suggested one such had shorted on 2 tons. At $300 per ounce this is around $20million, hardly a killer. Goldman couldn’t have conned Brown could they?

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