PM’s “Brown Bottom” exposed

The other day Gordon Brown said to Andrew Marr on the BBC: "Events come and they go. The question is... are you making the right long-term decisions for the country?"

I wonder if old “right long-term decision” man is aware that Gold is at a very long term high right now at $850 an ounce and gold stocks are making new highs?

In 1999 the Gold price was stagnant. Despite being warned that gold prices moved in decades long cycles Gordon Brown, for some insane reason, decided to sell off half the UK’s gold stocks .

He clearly knew it would not meet with universal approval, as he tried to bury the news by timing the release for a Friday afternoon, when most MPs were away from Westminster and news coverage was dominated by the outcome of the elections for the Scottish Parliament, Welsh Assembly and English local councils.

He was probably dancing to the tune of the he European Central Bank, which administered the euro - in the hope of joining the euro. The bank had been encouraging countries in the single currency to sell off some of their huge gold reserves, believing gold to be ’a bad investment’ and Gordon viewed it as a ‘barbarous relic’.

Not content with just making an ill advised sale of our gold he decided to dump it by auction, thus telegraphing the sales and helping depress the price and reduce what he could hope to get for it further – clearly demonstrating a lack of a real understanding of the gold market.

Gordon idiotically dumped the gold at a 20-year low in the market - now derisively known as the “Brown Bottom” by dealers.

The 17 auctions only achieved prices for the gold of between $256 and $296 an ounce, with an average of $275. It handed the professionals the opportunity on a platter to boot down the market and then scoop up the gold cheap at the auctions.

New Labour couldn’t even be straight when they told parliament. The government really intended to sell over than half the country’s gold before 2002- 400 tons, but Patricia Hewitt misleadingly claimed in parliament that:

“The Treasury intends to sell 125 tons of gold, 3% of the total reserves, during 1999-2000, with the Bank of England conducting five auctions on the Treasury’s behalf. Auctions will be held every other month starting in July.”

Since then the price of gold has increased massively. The loss to the taxpayer due to Gordon’s financial incompetence has been calculated at around £3.4 billion, based on dollar, euro and yen bonds.

That might have come in handy to defray some of the costs Gordon has committed the taxpayer to over Northern Rock.

The decision to sell 400 tons of gold is seen in City circles as a financial bungle to rival the Tories’ “Black Wednesday”.

So Gordon the question is not so much... “are you really making the right long-term decisions for the country?” more… “are you even actually capable of making them?”