18 January 2011

Reserve Bank of Australia Gold Sale

Further to The Australian's 11 January article "Reserve Bank's gold sale cost us $5bn", I thought my readers may be interested in the then Perth Mint CEO's response to the 1997 sale.

Consider these quotes:

"It is important to remember that we are evaluating gold now in a low-inflation environment, in which other financial assets are currently performing extremely well, the most important of which is the stockmarket. However, current conditions are not going to last forever. In my experience, in the long term, politicians cannot help themselves. When they are faced with a really tough decision, such as the one creeping up on them now - that of how to create jobs - they will take the easy option and let inflation go."


"When the crunch comes, governments will want to be re-elected. Rather than take the tough decisions, they will turn the inflationary tap back on. For that reason, I believe that gold will again have its day. I have not lost faith in gold."

The foresight of these statements come from the fact that Mr Mackay-Coghill worked for International Gold Corporation (Intergold) from 1971 to 1986. Intergold represented South African miners in the production and selling of Krugerrands and Mr Mackay-Coghill was responsible for the introduction of the Krugerrand to world markets in his role as CEO of Intergold.


  1. That was a very insightful little article to read.
    He made some very important comments that basically boil down to the government should be supporting high gold prices purely to have a strong mining, refining and export industry. Questioning the competence of the RBA? Not so outrageous now.

  2. News article at the time http://forums.silverstackers.com/topic-42170-16-year-old-article-the-australian-gold-sales-and-the-aftermath.html