Gold reserves

An opposition senator has advised government to convert the majority of its’ foreign reserve currency holdings into gold. Finally, a voice of wisdom and prudence.

Trinidad and Tobago has 1.9 tonnes (.7% of total reserves) of gold reserves held by the central bank. Venezuela holds 356.8 tonnes (33.3%) of its’ reserves in gold.

source: http://en.wikipedia.org/wiki/Gold_reserves

Out of a listing of 107 countries holding gold as part of their reserves, Venezuela appears at #15, with T&T at #91.

Our net official reserves are US$9,145,500,000 (July 2008). If we convert about 25% (US$2,286,375,000) of that to gold, we will get 2,540,416 ounces troy of at least 99.95% purity. Add that to the 61,093 ozt (1.9 tonnes) we already hold in reserves and we will be holding 2,601,509 ozt (2.6 tonnes) worth US$2,341,358,000.

A well negotiated deal with our CARICOM neighbour and trading partner, Guyana, may even allow us to receive payment for our products in gold, at slightly below market rates. After all, we forgave three quarters of a billion dollars in debt just a few short years ago. The Guyanese are probably eager to show their appreciation for our magnanimity.

Every time the price of gold rises by US$10, the value of our gold holding will appreciate by US$26,000,000.

This will certainly be a tangible asset that has real value, will not corrode, and will be available for use, trade or conversion long after any of the world’s ‘monopoly (the game) currencies’ become worthless. Its uses are well documented and numerous: In electronics, electricity, the aviation/space industry, medicine, decoration, and of course, jewelry.

Two thousand years ago, one ounce troy of gold would buy a Greek citizen a well-made toga and a pair of good sandals. Gold is such an excellent store of value that today one troy ounce will still buy a gentleman a quality tailored suit and a pair of leather shoes, along with shirt, tie, socks, cuff links, underwear. Name one currency that has retained that type of value.

It’s clear that we need some comprehensive strategy to ride out the coming economic storm. Will we repeat the mistakes of the 80s?

Visited four jewelry stores, asking about possible purchase of gold ingots, small bars, coins or other forms of bullion. All persons approached seemed perplexed. One salesperson even suggested I ask someone to smuggle it out of Guyana for me!

- Trini Funshooter