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Category: Society

Marking history in gold

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Many of history’s defining moments have been marked by the gold price. In the last half century, the peaks and troughs of the US dollar gold price have coincided with significant events on the world stage, politically and financially.

On a sunny morning in August 1971, we saw gold released from its $35/oz Bretton Woods peg by US President Nixon as a French warship sailed into New York harbour to collect the French Republic’s holdings from The Federal Reserve Bank’s vaults, citing ‘dollar imperialism’.

In January 1980, with the backdrop of the Iranian revolution and subsequent hostage crisis, coupled with the Soviet invasion of Afghanistan, Jimmy Carter handed over the US Presidency to Ronald Reagan. The US inflation rate was 15% and gold peaked at $880/oz.

 

Two decades of prosperity later, that saw the Berlin Wall and communism fall, gold had fallen to a low near $250/oz. As the Euro currency was officially launched in 2000, worries about Y2K saw central bank liquidity drive the dot-com stock market boom to nose-bleed valuation levels. Gordon Brown, the UK Chancellor, at the time saw fit to sell off 395 tonnes, almost half the UK’s gold reserves over a course of 17 auctions. The low-point, became known in gold circles as the ‘Brown Bottom’, with later calculations focussing on how much his actions has cost the UK Treasury.

The worst financial crisis in 100 years in 2008-09 saw the largest monetary printing experiment in history as central banks dropped interest rates to zero and brought a new word of Quantitative Easing/Money printing to the lips of the average person. Gold rose to its lifetime high of $1920/oz in September 2011, as the world stock markets stumbled again.

In US dollar terms, gold’s volatility has seen multi-fold price rises and subsequent large declines several times in that period. These movements and the zero-yielding nature of the asset class have led negative comments over the years from many legendary investors, such as Warren Buffett.

But while the US dollar remains the world’s reserve currency for now, and key asset classes like gold and oil are nominally priced and discussed in US dollar terms, the world is very much more global now than it has ever been. Even gold investors themselves tend to think far too much about the vagaries of the gold price in US dollar terms and not in their own and others’ currency terms. But a brief look at the table above, shows the real stability of gold’s return profile. Note, that the return profile of gold in CAD terms at 5% is not significantly higher than the 3.8% in US terms, but whereas gold in US terms had only six up years, in CAD terms it had nine.

While the solid return profile for non-US investors in gold in the developed market currencies shows strong performances, it becomes more obvious if we include the emerging market currencies. Whether it is the BRICS, (Brazil, Russia, India, China and South Africa) or the large economies of Turkey and Nigeria, the reasons for investing in gold to protect against home currency weakness becomes very apparent and we haven’t even added the basket cases of the Venezuelan Bolivar or the Iranian Rial!

No matter where you live in the world, especially outside of the US, whatever the global macro environment is, gold should be seen, not just as portfolio insurance, but as a crucial part of wealth enhancement and protection.

Tech advances advocate digital justice   

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Statue of Lady Justice at the Old Bailey London

Recent reviews have shown how digital technology can save police time, make the legal process more efficient and help build citizen confidence in the justice system, says Reform researcher Sarah Timmis  

No one wants to have a brush with the law. But at the very least, people expect the police and legal systems to be quick, accurate and fair. This may be self-evident, but police forces and the courts can do more to make it a reality. Technology offers a key to delivering an efficient and legitimate criminal-justice system.

Confidence in the criminal-justice system is a long-standing issue. Recently, The Lammy Review, overseen by M.P. for Tottenham David Lammy, concluded that black and minority ethnic individuals still face bias in parts of the system. This year, a number of prominent trials have collapsed due to police forces failing to disclose evidence, with “devastating consequences” according to chief constable Nick Ephgrave. Meanwhile, last year the Attorney General, Jeremy Wright QC, warned of the spectre of “trial by social media” in the digital age.

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The digital age has also increased police and prosecutors’ workloads. Last month, the police inspectorate found some investigations were subject to “unacceptable delays” because forces were struggling to retrieve digital evidence from smartphones. The lead inspector announced that about a quarter of forces are overwhelmed by today’s demand. The Crown Court has faced a 34% increase in the backlog of cases since 2013.

The long arm of technology

But just as technology increases demand, it offers solutions. In Durham, the use of online video evidence to detect low-level crime has increased productivity, cut costs and helped reduce more serious crime. West Yorkshire Police use an app, which allows the public to send in text, audio, images and video messages, enabling the police to use information from the public to speed up response. Body-worn cameras are now a staple of policing, allowing instant collection of information.

A high-tech system swimming in data requires fast and secure access to evidence and information. Justice services could help provide the right information to the right people at critical moments by using a common platform, from which different services can securely store, access and share relevant data.

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Using such a platform, technology can help involve citizens in the justice process, increasing transparency and confidence. ‘Track my Crime’, a service developed by Avon and Somerset Police and now used by 14 forces, provides information for victims and witnesses of crimes online, with automatic alerts sent via text or email. Pleas for low-level offences, such as motor incidents, are now administered online, with 80% of users satisfied with a new pilot for online claims.

However, confidence in such processes will only be secured if technology is used appropriately. Last week, Privacy International called for a public-awareness campaign, after finding that at least 26 police forces in England and Wales use technology to extract data from phones without informing citizens. Nick Ephgrave says that police forces need to see disclosure of evidence as “integral” to investigations. Digital case files may provide the tools to achieve this, but officers must change their approach to deliver effective justice.

digital evidence

The digital exhibits awaiting examination by police is reducing. But the capture and use of such evidence remains controversial

Used wisely, technology can help create a learning culture. Data from body worn cameras in the US has flagged discrimination within police forces towards certain communities and can help tackle these biases. Last month, West Yorkshire Police reported a 27% drop in taser use in the last year after the introduction of body worn cameras. The camera’s provision of an independent account can increase confidence and improve relations with the public.

The world is fast-moving, the internet passes judgement on offences instantaneously, while digital crime provides the opportunity to coordinate and accelerate illegal activity. A high-tech justice system, underpinned by smarter access to data, can deliver faster, fairer and more responsive justice for anyone in contact with the law and – crucially – can build confidence in our legal system.

Sarah Timmis is a researcher at independent, non-party think tank Reform, whose latest report on crime and information can be accessed here.

@SarahTimmis

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