Gold? Its history, says the Prime Minister another good....

Gold? It's history, says the Prime Minister another good reason to have some...

Tony Blair uses history as a term of abuse. First there was history, but now there is New Labour, so we all know better now or have no excuse not to. This limit on his perspective is apt to mislead him, and now he seems to have decided that gold is history, too. It may date from the creation of the world (4004 BC, according to Archbishop Ussher) but the Bank of England (established 1694) has been told to clear it out. How can his country look shiny and new if its reserves of wealth are held in these archaic yellow ingots? How much more modern to hold promises to pay, signed by our friends and neighbours! A myopic glance back into history would have taught him that another modernising Labour government had the same idea a generation earlier, and cleared out much of our gold at $35 an ounce, just before the price took off. A perspective that stretched back as far as the century would show how little other people's paper promises have proved to be worth - and our own, for that matter. As late as 1931 a pound note was as good as a gold sovereign. Today's price for a sovereign is 41, so what was a dead-heat is now a race won by a distance. Gold is a store of value whose worth does not depend on anybody's promise, least of all the promises of central bankers or of politicians. For the last two decades, Western governments and their allies at the International Monetary Fund have been trying to drive the price down and, now we have joined in, it must be near the floor. With any luck, gold will be at its cheapest at the end of the year, when Value Added Tax comes off, and I shall be round at the Bank of England with my shopping basket. Not to know what happened before you were born, as Cicero said, is to be a child all your life - but no doubt the Prime Minister would say that Cicero was history.

Send a gunboat
Is that really you Prime Minster?
Well I er??........

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