by Lorena Unaza There was a debate in the Austrian […]
by Lorena Unaza
There was a debate in the Austrian parliament when it was revealed that the country’s National Bank is storing its gold reserves in England. In response to the parliament’s question about why to store the gold in England and not in Austria, the OeNB said that in a time of crisis it could have been easily traded. Also, since 2007 Austria has had a constant reserve of 280 tons and through leasing of it, the National Bank managed to earn 300,000,000 Euros in the last 10 years.
The bank’s governor Wolfgang Duchatczek revealed some statistics about the quantity of gold stored at the main gold trading market, which is the Bank of England. Subtracting the known and reasonably estimable quantities listed in the table 1, we can note that the unidentified gold held in Bank of England was 2,220 tonnes in 2006, a quantity that was increased by 2,471 tonnes in 2012. In order to see how these quantities of gold stack up in a global context, we need to get through the table 2 which contains detailed information about gold held in Central Bank.
China, Russia and mid-Asian states made their decision to hold the gold that they probably produce from local mine production in the Central Bank and not in the Bank of England. The same did the United States. Examining carefully the table 2, we note that the unidentified gold of Central Bank has been decreased by 464 tonnes in 2012, from 21,552 tonnes that it was in 2006 to 21,088 tonnes in 2012. The explanation to this would be that probably the quantity of 464 tonnes would have been shipped to the Bank of England or the increased quantity of the unidentified gold in the Bank of England would be an increase of a non-monetary gold. If the latter is correct and given the unidentified gold in table 2 has been declined over the years, we can assume that the monetary gold held in the Bank of England has to be within 2,220 tonnes recorded in 2006. Therefore, concerning the total amount of gold of Germany, Austria, Mexico and UK, held in the Bank of England which cannot be more than 3,532 tonnes makes us believe that perhaps the Central Banks of all countries do not store a significant amount of their gold in the Bank of England, as Mr. Duchatczek thinks.
The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.
The AEC’s fundamental goal is to promote a free, responsible and prosperous society. Through education and improving public understanding of key economic questions, the AEC promotes the idea of a free market economy and the ideal of a free society.