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Published on Gold Anti-Trust Action Committee (http://www.gata.org)

GATA prompts British regulators to inquire

By cpowell
Created 1999-07-10 07:00

12:05a EDT Monday, July 12, 1999

Dear Friend of GATA and Gold:

The Bank of England's gold sales are blowing up into a
political scandal.

The story below, from the Sunday London Times, suggests
that the chancellor of the exchequer is running away from
the gold sales in the face of the anger they have caused in
the mining industry and particularly in South Africa, a
country with close links to Britain.

Further, later today it was reported that the Conservative
Party's "shadow chancellor," Francis Maude, has asked
the British government's National Audit Office to investigate
the gold sales, since they have sharply reduced the value
of Britain's gold holdings.

GATA believes that this is only the beginning of what
could be a lot of trouble for the Labour government,
and for the gold shorts.

Please post this as seems helpful.

CHRIS POWELL, Secretary
Gold Anti-Trust Action Committee Inc.

* * *

GOLD SALES WEREN'T MY IDEA, CHANCELLOR SAYS

By David Smith

Economics Editor

London Times

July 11, 1999

Gordon Brown has told colleagues that the plan to
sell off more than half of Britain's gold reserves,
which has led to a slump in world gold prices and an
outcry from South Africa, was not his idea.

The proposal to sell the reserves was put to ministers
by officials and, say Treasury insiders, agreed with
relatively little discussion.

The chancellor is said to have been surprised and
mortified by the reaction from Thabo Mbeki, the South
African president, who said last week that the decision
would have a "potentially disastrous effect" on South
Africa.

A delegation led by South Africa's mines minister, and
including senior trade unionists, will visit London
tomorrow to lobby for an end to the gold sales. But
Brown, who has a two-day meeting of European and Group
of Seven finance ministers in Brussels, will leave it
to junior ministers and officials to meet them.

The price of gold has fallen by $30 to $257 since the
announcement of the gold sales in May, hitting a 20-
year low after Tuesday's first auction of 25 tonnes.
This means a loss of 25 million pounds on the gold so
far sold, a loss that will rise to 400 millioni pounds
for the full programme of sales if the price does not
recover.

South Africa's mining companies have warned that half
the country's mines will have to close if the gold
price stays below $265. Already East Rand Proprietary
Mines is under the threat of closure with the loss of
5,000 jobs and five more mining companies have alerted
Pretoria to the impending loss of a further 11,700
jobs.

Unemployment in South Africa stands at 32 percent, and
the loss of each mining job is estimated to lead to the
loss of six further jobs in ancilliary industries.

-END-

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