Gold Makes Dead Portuguese Dictator Top Investor

[dipsydoodle]

Former dictator Antonio de Oliveira Salazar might have been remembered as Portugal’s best investor had central bank rules allowed the country to benefit from his shrewdest trade: Europe’s biggest gold pile.

Portugal owns more of the precious metal relative to the size of its economy than any euro country, accumulated mostly during Salazar’s 36 years in power using savings and money from exports including tungsten and canned fish. Gold’s 26 percent advance in the past year leaves Portugal holding an increasingly valuable asset, though one the indebted government can’t touch because the law prevents proceeds from going to state coffers.

“With the increase in the price of gold, you have some nice booked gains, but you can’t cash them in,” said David Schnautz, a strategist at Commerzbank AG in London. “It’s a buffer for an extreme-case scenario.”

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The 382.5 tons of gold that Portugal holds are valued at about $14.7 billion, or 6.8 percent of GDP after converting into euros, Bloomberg calculations and International Monetary Fund data show. Italy’s gold equals 4.8 percent of its economy, followed by Germany with 4.2 percent. Greece’s gold reserves equal 1.4 percent of GDP.

http://www.bloomberg.com/news/2010-07-21/gold-makes-dead-portuguese-dictator-top-investor-without-gains-to-prove-it.html

Shrewd nut.