Economy Solbes The English gold that sold in 2007 is now worth more than double
four years ago, then financial vice-president cleared the way for the sale of 32% of the reserves of this metal in the Bank of Spain
YOLANDA GOMEZ / CUESTA MARIA / MADRID Day
22/04 /
EFE. The President of the Canary Islands, Paulino Rivero Pedro Solbes
salutes "The gold is no longer a profitable investment," claimed in 2007 the then financial vice-president, Pedro Solbes, to justify the sale of over 32% of the reserves of this metal property in our country that the Bank of Spain had done in the same year. The operation was added to a close my last year of almost another 8%. No investor may have more smell. At that time, an ounce of gold traded at $ 669, yesterday to 1,508. The first financial crisis, economic then current debt and have become the safe haven precious metal par excellence and its price has not stopped record after record chaining. In the four years that have passed since the Bank of Spain governor Miguel Angel Fernandez Ordonez, with the approval of the Government, decided to reduce its gold reserves, the price of it has grown by 125%.
The 4.3 million ounces of gold sold by the supervisor in 2007 at a price of U.S. $ 2867.7 million (2108.6 million euros at that time), now valued at 6471.5 billion (4460 million euros at today's rate), nearly 125% if the comparison is done in the "greenbacks" and 111% more in euros (taking into account the revaluation of the euro in the period). In any case, within four years, Spain has lost more than 2,350 million euros for selling these assets.
That is, investment that Solbes considered "unprofitable" has more than doubled its value in just four years. "The reserves of the Bank of Spain must be the fundamental objective of maximizing profitability," said the vice president in the Senate when questioned by the PP in this regard.
is true, though, that the Bank of Spain made box with the sale and achieved in that time-now juicy gains are somewhat bland, "for bullion were recorded at 100 euros an ounce, and sold nearly 500 euros (660 dollars). According to the calculations that were made then, the Bank of Spain took about 2,500 million profit, since then the price of gold had already begun to surge to strong demand for jewelry by the new rich of China and India, which were precisely the target of sales, although the Bank of Spain does not officially comment.
Moscow Gold
But official figures speak for themselves supervisor. 16.8 million ounces, which controlled the Bank of Spain in 2001, moved to 13.4 in 2006 and between 2006 and 2007 were further reduced to the 9.1 that the supervisor maintained since then. The quantity sold by the institution he presides Fernández Ordóñez in those years is 46% of gold reserves in force before the introduction of the euro. This is the highest output of the precious metal from that mythical to Moscow during the Civil War.
unfortunate addition to the arguments of the profitability of the metal, the other reason for the sale that the Government argued at the time was the same as that of other European central banks. They agreed after the introduction of euro gradually without its gold reserves for other assets more cost effective and easy to guard, or simply to enhance their heritage. The initiative in euro zone started in 1999 but, according to permit secret deals sale agreed within the European Central Bank (ECB), Bank of Spain has not accounted for turn off its ingots up to five or six years later.
The first major gold output since the transition occurred in 1999 when the Bank of Spain, in compliance with the agreements setting up the euro, pierced gold and currency reserves at the then new ECB coffers needed for all member central banks. This, in turn, gave a promissory note of 4,000 million that the English central bank pays for each year.
However, the perspective afforded by also spent time reveals that this argument has been confronted by the reality. It reveals a comparison of the strategies ultimately adopted by other major central banks with respect to this metal. European central institutions have ceased to undo their positions and, additionally, the monetary authorities of Asian countries have rushed to buy gold to diversify their reserves full of dollars.
According to recent data published by the World Gold Council (WGC), gold reserves of central banks around the world grew by more than 276 tonnes in the first quarter of this year, up nearly 30,500 tonnes. At the forefront of this trend is set Saudi Arabia, a nation that has stepped up its purchases. In particular, the country raised their reserves to nearly 329 tons from just 143 tonnes. Russia also joined
26.6 tons to its golden mattress, which has now reached the 669 tons. The biggest seller was the International Monetary Fund, which since early this year launched a program of selling off their reserves. Its amount of gold has fallen from 3,005 tons to 2,967, which, according to market estimates, would have generated a windfall of 1,969 million euro to the body that presides Strauss Kahn.
A 450% increase in ten years
is true that the gold rush has been exacerbated by the crisis, but also that very few investment strategies that may make no shadow. The precious metal is on track to its eleventh consecutive year on the rise, with a cumulative return in nominal terms of 450%. Crossed an ounce in New York this week the barrier of $ 1,500, and reached a high yesterday 1,508 Revaluation from January minimum plus 15%. The question is, now, if after you will still pull this metal bellows or, by contrast, will be over and the race. Experts believe that there are still travel for a while, albeit at a slower pace and with occasional correction down the road.
To his credit, has renewed fears about sovereign risk, the even low interest rates and growing concerns about inflation. To this are added the difficulties of the mining industry to keep production rates required by demand. There is no doubt that gold will continue to play to investors, although Spain and have fewer chips on the board.
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