Australia Wants Its Gold Back

Gold repatriation has been a hot topic in the last 2 years. After Germany, Venezuela, the Netherlands, Finland, Poland, Ecuador, Switzerland, it could be Australia’s turn.
The latest campaign baseline is “Return Aussie Gold” initiated by an Australian volunteer. On his campaign site he writes the following:

There is unprecedented structural change underway in the international gold market due to growing uncertainty around the global financial system. There are also substantial reasons for concern associated with storing Australia’s Gold Reserves in London.
As Australians let’s join together and petition The Federal Government to immediately act prudently and physically repatriate Australia’s Gold Reserves.

The ”Return Aussie Gold” website has a petition which should be signed by as much as possible people and returned as a hard copy in order to be valid. Go to the petition page.
From the FAQ section of the website:
Where is Australia’s gold and how much room is needed to store it on Australian soil?
Australia has 80 tonnes of gold which is managed by the Reserve Bank of Australia (RBA) as part of its foreign reserves assets. The RBA’s PR department has stated that Australia’s 80 tonnes of Gold Reserves is stored at the Bank of England, in London for cost efficiency and security reasons. However, Australia has international standard bullion storage facilities with capacity to store Australia’s gold at cost competitive rates. Also the cost to build a new Federal Government owned facility is negligible when compared to the current value of Australia’s gold ($3.3 billion).
To store Australia’s gold reserves, how much room is needed? A stack of 80 cubes (80 tonnes) would measure approximately 1.44m x 1.80m x 1.44m, which is smaller than a small car. Realistically, gold is stored in 12.5kg [400oz] bars on steel pallets, so 80 tonnes would take up an area around the size of an average Australian lounge room.
Thousands of tonnes of gold are transported around the world every year; therefore repatriating Australia’s gold would be a straight forward exercise.
Why is it critically important to repatriate Australia’s gold reserves back to Australian soil?
“Possession is nine-tenths of the law,” an expression meaning that ownership is easier to maintain if one has possession of something, or difficult to enforce if one does not.
Australia holds two main assets as foreign reserves, i.e. gold and currencies. Gold only makes up 6% of the total value.
If the value of the currencies held by the RBA (and every other Central Bank) plummets due to a new GFC, gold will be the back-up reserve. This is exactly the reason gold is held now.
Why is Australia’s gold insurance seriously lacking?
Foreign reserves are assets held by Central Banks to back its country’s liabilities. These assets are generally gold and different reserve currencies, mostly the US dollar and to a lesser extent the Euro, the UK pound sterling and the Japanese Yen.
The International Financial System is based on the circulation of the US dollar and other currencies.
Gold is an internationally acceptable wealth storage asset that does not carry any counter-party risk. Due to this fact gold is held to manage and diversify the counter-party risks associated with holding currencies (e.g. US dollar) within foreign reserve holdings as the RBA said in 1996, gold is “insurance against the breakdown of the international financial system.”
The following is the amount of gold some major Central Bank hold as foreign reserves (source WGC) at June 30 2013: USA (70% gold), Germany (66% gold), France (65% gold), Italy (65% gold), European Central Bank (27% gold), Spain (23% gold) and United Kingdom (12% gold).
Prior to the RBA selling 167 tonnes of Australia’s gold, Australia held about 20% of its foreign reserves in gold, which was roughly in line with the gold holding of developed countries. (source RBA)
Australia now holds only 6% of its foreign reserves in gold (Source – IMF and World Gold Council)
Can the Federal Government ask the RBA to repatriate Australia’s gold reserves?
Yes. As an independent Central Bank the RBA Board of Directors manages the affairs of the bank, but is accountable to the Parliament for its actions.
Section 11 of the Reserve Bank Act 1959 lays down procedures which are to be followed if there is a difference of opinion between the Australian Government and the Reserve Bank Board as to whether the monetary and banking policy of the Bank is ‘directed to the greatest advantage of the people of Australia’.