Let me try to answer some of your questions.
Originally posted by hellfire3
1. Why was the gold sold when the market bottomed out?
Market bottoming out? The price of gold has been steadily increasing since before 9/11. I'm not sure what your source was for this claim, but a
websearch would easily reveal it's not true.
2. The average citizen would not have had the capital to buy the gold, so the argument that the sale was open to all was not true. When the gold is
the property of the govt, hence the people, shouldn't the average citizen have access to buy it as well?
When a country sells its gold reserves, it is sold on the open market. This doesn't mean it's open to individuals. It means it's sold, as you say,
to LBMA members. This is to insure reliable delivery and speedy, efficient exchange. The ordinary individual is not going to have access to the
trading mechanisms available to institutions, just as the ordinary individual does not have access to the NYSE floor. They would have to purchase
their gold through intermediaries, who are LBMA members.
Individuals always can buy gold at market price direct from their government these days from most countries. In Britain, this would be done by
purchasing bullion, which usually comes in the form of gold bars or coins called sovereigns, which are called gold Brittanias. They can be purchased
direct from the royal mint by individual investors and collectors.
3. Large corporations would have been the main benefactor, mainly in the telecommunations, electronic and high tech industry where gold is used as
part of the manufacturing process. They would have benefitted by being able to buy gold at below market value price.
How did they buy gold at below market value price if it was sold on the open market via auction? The type of auction you describe is called a
and it ensures speedy transactions. Nothing shady or underhanded about it. You can click on
the link for more information on these auctions (the article is in the context of IPOs- ie, stock offerings- but the principal of the auction is the
same). Ebay lets you host Dutch auctions, and should contain some more info.
4. Specialist dealers and traders made profit with the sale of the gold by reselling it later when the market took off as it was predicted by analysts
even before the auctions started.
Yep.. this is how brokerages, investment banks, and hedge funds stay in business.
5. The UK govt has basically done a deal to profit corporations yet the average citizen gets screwed.
How did the average citizen get "screwed"? Average citizens have never had access to the stock market directly, let alone commodities trades. If
you wanted to purchase the gold, like I said, you can do it through your government, and if the price was, as you say, bottomed out (which it hadn't)
the average citizen screwed himself by not purchasing any at that time through an intermediary.