---Original Message to European Central Bank from me-----

From: Thomas Buyea [mailto:Ranger115@webtv.net]

Sent: 09 January 2004 16:25

To: Press Office (Email) Subject: Questions

Please answer the following questions or direct me to where I can get them answered. Thank You

Hello My name is Tom Buyea and I am in Miami, Florida USA and I have a couple of basic questions about the Euro.

1. I understand the Euro is backed up by 15% gold, Do the Euro coins have that 15% gold or any gold in them ?

2. If I had 10,000 paper Euros and I went to the government agency that issues them and asked for the 15% gold that backs my 10,000 Euros -- What would happen ? Could I get the gold and how much would I get ? In other words I give you 10,000 paper Euros and you give me 1,500 Euros (which equals 15%) worth of gold ? That doesn't sound like a very good deal for me ? Please advise how this works.

3. Where did all the gold that backs the New Euros come from and are the Euros that have the insignias of each different country backed by gold from that individual country ?

Please advise

Thank You,

Tom Buyea,

Miami, Florida

USA Ranger116@webtv.net

Their answer -- Disclaimer first

==============================

Any e-mail message from the European Central Bank (ECB) is sent in good faith but shall neither be binding nor construed as constituting a commitment by the ECB except where provided for in a written agreement.

This e-mail is intended only for the use of the recipient(s) named above. Any unauthorised disclosure, use or dissemination, either in whole or in part, is prohibited. If you have received this e-mail in error, please notify the sender immediately via e-mail and delete this e-mail from your system.

From: Niels.Bunemann@ecb.int

To: Ranger115@webtv.net

Subject: RE: Please answer the following questions

Date: Wed, Jan 7, 2004,

Hi Tom,

Thanks for your questions which I will try to answer without too many historic and economic details. Before I come to that, though, let me just pass on the information to you that the notion of a currency "backed by gold" is quite obsolete.

I do not know of any currency in today's world which is based solely on gold reserves in the central bank. For example, the US monetary authorities abandoned the gold standard in 1971. (1960 ? "tlb") Here the answers to your questions.

1. Your understanding is not correct. The 15% you mention is probably the proportion of the European Central Bank's combined reserve assets that is placed in gold. When the ECB was established in 1998, the national central banks of the euro area transferred part of their reserve assets to the ECB (and they received in exchange for that a claim on the ECB, denomiated in euro). 15% of the reserves they transferred consisted of gold assets.

As regards the euro coins, their material composition does not include gold. By the way, the ECB is not the issuer of the euro coins, only of the euro banknotes. The coins are issued by the governments, whereby the volume of coin issuance of each country has to be approved by the ECB's Governing Council.

2. The ECB's Governing Council has the exclusive right to authorize the issue of euro banknotes. In practice, legally speaking, the banknotes are issued by the ECB and by the national central banks of the euro area. Because of what I have said under 1. the second part of your question is not really relevant, I'm afraid.

I would rephrase it to the following question: How much gold can I get for 10,000 euro? The answer to that depends solely on the market price of gold.

Currently the price, measured in euro, is around 330 euro per fine oz. of gold, so you could theoretically buy around 30.3 fine ounces for 10,000 euro. But this price changes daily, and it's a "wholesale" price in the global gold market.

The value of the banknotes and coins is solely based on the trust in the currency's purchasing power, and therefore on the confidence that the central bank will conduct a sound monetary policy. The fact that the ECB and the national central banks possess reserve assets in foreign currency and in gold contributes to that trust, but it is only one aspect out of many important topics that the central bank has to deal with. More important is the level of the official interest rates set by the ECB's Governing Council. By the way, the value of the gold owned by the Eurosystem (ECB plus 12 national central banks) amounts to some 130 billion euro.  I hope this is sufficient to answer your questions, Otherwise, please call again.

Best regards Niels Bünemann Press Officer

European Central Bank Ph. +49-69-1344 6594