first majestic silver

Why Did the Gnomes of Zurich Announce the Sale of Their Gold?

Founder & Chief Editor of Gold Eagle
June 8, 1998

Late last year the Swiss government made the startling announcement that it may sell more than half of its gold reserves. However, the sale of the 1,400 tonnes would have to be approved by a populous referendum in two years' time before it could go ahead.

This is in addition to Swiss plans to sell 400 tonnes to finance a fund for victims of the Holocaust. Consequently, the total proposed gold sales amount to nearly 60,000,000 ounces. These announcements leave many just shaking their heads in a quandary.

Firstly, it makes little monetary sense to sell off the very foundation strength of your currency - especially so when South-East Asian currencies are being ravished. Moreover, there are increasing rumors the Chinese yuan will be devalued by the Sino-government - which inevitably will cause the Japanese yen to devalue in order to protect its export industries. So, why have the Gnomes of Zurich announced the sale of their gold - which has been the stabilizing keel of the Swiss Franc for nearly two centuries?

Secondly, the Swiss are world renown for being the epitome of discretion (i.e. closed-mouthed) - by comparison the Egyptian sphinx is a blabber-mouth. Nevertheless, the Swiss government announces the sale of half their gold reserves fully two years before the fact. On the surface this would appear VERY STUPID - but the Gnomes of Zurich are anything but stupid. So, why have the Gnomes of Zurich announced the sale of their gold - which has been the stabilizing keel of the Swiss Franc for nearly two centuries?

There must be a very valid reason in support of their seemingly premature and senseless announcement of massive gold sales.

Let's reason this out together. Any intelligent and prudent person would only give up that which has always provided safety and stability, IF he received in exchange a viable substitute of measured and recognized safety and stability. Historically, we must recall there has only been ONE environment which affords all participating currencies intrinsic strength of foundation - and completely devoid of costly and unproductive foreign exchange volatility: A GOLD STANDARD.


One year ago next month GOLD-EAGLE posted a very thought-provoking report entitled "Only Solution Is To Dump U.S. Treasuries and Buy GOLD!" - authored by the analyst using the handle ORACLE. It was part of a series on the Japanese dilemma called "JAPAN BETWEEN A ROCK AND A HARD SPOT." This particular essay explored the feasibility of and rationale for reestablishing a GLOBAL GOLD STANDARD.

Much of ORACLE's supporting arguments were based upon verifiable IMF statistics. ORACLE contends the GLOBAL GOLD STANDARD would indeed be viable if the main participants were the US, Germany, Switzerland, France, the United Kingdom and Japan -- currently, the first five gold rich, and the Nippons gold poor. Indeed the world's financial powerhouses could guarantee the success of a GLOBAL GOLD STANDARD - which would provide many benefits to all participating countries.

Based upon IMF data, ORACLE concluded that a workable GLOBAL GOLD STANDARD could be implemented via the cooperation of the six countries if gold deposits were redistributed (per each country's respective M-1 money supply), and gold revalued to $1,200 per ounce.

Whether you believe in the ultimate workability of the GLOBAL GOLD STANDARD or not, ORACLE's scenario is inescapably thought-provoking and difficult to refute. He provides many numbers devoid of any hype, but replete with challenging logic.

The following URL contains ORACLE's original piece on the Global Gold Standard - which might lend reason and give logic to "why the Gnomes of Zurich announced the sale of their gold - which has been the stabilizing keel of the Swiss Franc for nearly two centuries."

Founder of Gold-Eagle in January 1997.  Vronsky has over 42 years’ experience in the international investment world, having cut his financial teeth in Wall Street as a financial analyst with White Weld. Vronsky speaks three languages with indifference: English, Spanish and Brazilian Portuguese.  His education includes a degree in Petroleum Engineering from the University of Oklahoma, a Liberal Arts degree from Hartnell College and a MBA in International Business Administration from UCLA – qualifying as Phi Beta Kappa and Tau Beta Pi for high scholastic achievements.  Vronsky believes gold and silver will be recognized as legal tender in all 50 US states and many countries worldwide.  You may reach I. M Vronsky at: [email protected] and/or [email protected]

Gold's special properties mean that it has a greater variety of uses than almost any metal.
Top 5 Best Gold IRA Companies

Gold Eagle twitter                Like Gold Eagle on Facebook