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Short-term gain but long-term pain for UK taxpayers

With rumours abound that the UK government is set to sell off Northern Rock, with Virgin Money touted by many as the front runner, this is just the latest in a number of potential state selloffs which Gordon Brown is considering in order to reduce government debt and also inject further capital into the UK economy. However, if you look at Gordon Brown's track record with regards to the sale of state assets it does not make good reading as he effectively sold off the U.K.'s gold reserves at rock bottom prices.

It is certainly a case of short-term gain for long-term pain if, as rumoured, a number of state sales do follow, perhaps raising in the region of £20 billion. It is obvious that the only assets which will have any attraction whatsoever for potential buyers are the best ones of the governments portfolio, thereby leaving UK taxpayers with the assets which nobody is interested in. It is highly unlikely that the UK government will attempt to make "a song and dance" about these potential sales because in effect they could prove to be "the giveaways of 2009/10".

There is no doubt that the UK "silver" is being sold at rock bottom prices at a time when there are few buyers around and money is tight.

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