The Great Gold Rip Off

By B. Doyle

Somewhere, under the streets of London, in a disused World War II canteen, England has a store of 156 billion pounds sterling worth of gold bars; 4,600 tons of the precious metal, each bar weighting 28 pounds of 24-carat gold.

Australia’s gold reserves, a paltry 80 tonnes of the stuff, are held in this UK repository. We used to own a lot more but in 1997 the Howard Government sold 167 tonnes at a cheap as chips price of $350 per ounce. The Reserve Bank of Australia revealed in July 1997 that over a six-month period, it had sold 167 tonnes, reducing Australia's reserves to just 80 tonnes. At this time, the value of Australia’s gold assets fell from $3.6bn to about $1.1bn. The RBA's sales pushed the world gold price down to an 11-year low, returning just $2.4bn for the gold that was sold via a single broker engaged without a tender.

When the British were our Colonial masters, all the gold produced in Australia by Australian miners was supposed to be ‘sent home’ and this was the edict pretty much from the word go. At the beginning of just the second year of our gold rush, eight tons of gold had already been shipped back to Mother England. Visualise this as you look at the tiny one or two gram pieces you have just detected! Eight tons of gold, or 7.26 metric tonnes if you will, or better still, 233,414 troy ounces and this was just the start of a transference that would last for years, until Australia finally ran out of enough gold for its own needs and actually had to import some! The huge amount of gold that came out of Victoria alone actually got England out of strife. England paid off all of its foreign debts and the gold also allowed it to float the English pound.

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