characteristics. It is well-known that every government’s central bank, in-
cluding the International Monetary Fund (IMF), keeps a certain number of
tons in gold reserves. Efforts to exert controls on leading economies in the
world to keep inflation under control and to manage their money-printing
presses have all pointed toward the use of gold (and possibly other com-
modities). It is interesting also to note that in 1999, at the IMF/World Bank
Annual Meeting, a historic five-point agreement was reached. Fifteen Euro-
pean central banks, including the ECB (European Central Bank), declared
their allegiance to the idea of the role of gold in the economy. Willem Dui-
sinberg, president of the ECB at that time, stated that their agreement con-
sisted of the following items:
1.Gold will remain an important element of global monetary reserves.
2.The 15 institutions will not enter the market as sellers of gold, with the
exception of already decided sales.
3.Gold sales that were already decided would be achieved through a con-
certed program of sales over the next five years. Annual sales would not
exceed 400 tons, and total sales would not exceed 2,000 tons.
4.The signatories to the agreement agreed not to expand their gold leasing
and their use of gold futures and options during this period.
5.The agreement would be reviewed after five years.Gold Reserves in the World^32
Analysis of the official gold reserves reveals very interesting results, which
are detailed here to familiarize the reader of the amounts of gold that differ-
ent countries in the world have set aside as reserves. In addition to these
gold reserves, many countries add foreign currency reserves. The following
is a summary of some observations about the per capita gold reserves^33 of
central banks around the world:
1.Switzerland has the highest per capita gold reserve (1040 tonnes), at
4.6 ounces of gold for every Swiss citizen, followed by Lebanon at
2.19 ounces of gold per person. This is followed by the following groups:
a.The Eurozone countries: 1.16 ounces of gold per citizen (total
reserves of 10,866 tonnes)
b.The United States: 0.86 ounce of gold per citizen(8133.5 tonnes)
c.Japan: 0.19 ounce per citizen (765 tonnes)
d.Russia: 0.11 ounce of gold per citizen (523 tonnes)
e.China: 0.02 ounce per citizen(1054 tonnes)
2.Both Canada and Mexico have negligible official gold reserves per cap-
ita (each has 3.4 tonnes)Money and Its Creation 123