IMF Selling 400 Tonnes of Mexican and Brazilian Gold as its Own!

[flashl]

There has been a lot of talk of late of potential sales of I.M.F. gold. The more we look at the subject, contrary to our previous view, the more likey it seems possible , but if it does happen, it will not happen again thereafter for solid reasons. If the sales do take place they will happen from September 2008 onwards.

It will still have to get past the U.S. Congress a most formidable and possibly insurmountable obstacle.

The first question that will be asked is just whose gold do they want to sell, after all the gold held by the I.M.F. belongs to each individual nation that contributed it, so how dare the administrative side of the I.M.F. propose selling its members gold and how dare some members of the I.M F. approve of the sale without getting the OK from other members?

The answer is quite simple. The I.M.F. does not believe that the gold they propose selling belongs to any member at all, but in fact, belongs to the I.M.F itself . Consequently, the only discussion surrounds the disposal of the I.M.F.'s own assets! How could the I.M.F. get its own gold?

...

"Is there good reason for the I.M.F. to sell this gold?

Gold Seek

[truedelphi]

1. What the article relates in terms of the IMF

Quoting from the article:
The I.M.F. is not an interest earning institution, there to maintain redundant economists. The thought of increasing income to an institution that can no longer justify its size should send alarm signals to its members. This was emphasized by a report submitted to the I.M.F. Executive Board, the Committee, headed by Bank of International Settlement head Sir Andrew Crockett, who concluded that the I.M.F.'s current income model, which relies heavily on the interest it earns from loans to member nations, is “no longer appropriate.” But there it is, they feel they should bail out the I.M.F. from its present mess.

Poor reasons for selling

The reason the G7 gave for approving these sales is: -


“This is arguably a good time to consider selling some of these gold holdings and investing the proceeds in financial securities with positive yields.”


It is amazing that such a statement is made by such qualified men, but they do have to promote paper instruments. That is their business. Of course, with gold having quadrupled in the last four or five years, no solid financial securities with positive yields has come anywhere near to matching this performance, nor is any likely to. Indeed the Credit crunch has confirmed just how risky alternative investments to gold can be.

[sergeiAK]

3. Gold is a commodity

Commodities are cyclical in nature. They "bought" low, and now they want to sell "high". This is how you make money trading commodities. I can't say that it's necessarily the greatest idea to sell the gold now (especially as I think gold will hit higher prices for another year or so), but it makes sense from a trading standpoint. Commercial paper is rather cheap right now, and there is money to be made there, more easily than there is in gold. Gold may or may not increase in value, but bonds are rather cheap due to the uncertainty in the credit markets, leaving much "lower hanging" fruit to be had.

G7 is looking forward, you're looking backward. Making money in the markets is about the future. And the future of gold is shaky, due to the quadrupling that you mentioned. And as far as gold's value quadrupling in the past 4-5 years, what about the precipitous drop it saw in the mid-80s? From ~900 to ~250, doesn't sound quite so safe now, does it? All markets have risks, gold, pork bellies, stocks, bonds, even tulips (as the Dutch learned quite some time ago).

Also, it appears that the gold they're selling was given to them by Brazil and Mexico to settle debts owed them, so it would actually be their gold they plan to sell.

[truedelphi]

4. All I did was,in the spirit of dialectics, a matter of quoting the article

How you can arrive at my thinking backward and their thinking forward or whatever, I cannot fathom.

I was not relating my thoughts on the matter at all. Every word in my earlier post was taken from the original article.

So it Would be Fair for you to critique the writer of that article - but that wan't me!

[sergeiAK]

5. Pardon

Oops. I thought the 2nd part was you speaking.

[truedelphi]

6. Okay- fair enough!

[AlertLurker]

2. And they call it democracy.

Call it Democracy
Bruce Cockburn, Nov. 1985

Padded with power here they come
international loan sharks backed by the guns
of market hungry military profiteers
whose word is a swamp and whose brow is smeared
with the blood of the poor

Who rob life of its quality
who render rage a necessity
by turning countries into labour camps
modern slavers in drag as champions of freedom

Sinister cynical instrument
who makes the gun into a sacrament --
the only response to the deification
of tyranny by so-called "developed" nations'
idolatry of ideology

North south east west
kill the best and buy the rest
it's just spend a buck to make a buck
you don't really give a flying fuck
about the people in misery

IMF dirty MF
takes away everything it can get
always making certain that there's one thing left
keep them on the hook with insupportable debt

See the paid-off local bottom feeders
passing themselves off as leaders
kiss the ladies shake hands with the fellows
open for business like a cheap bordello

And they call it democracy
and they call it democracy
and they call it democracy
and they call it democracy

See the loaded eyes of the children too
trying to make the best of it the way kids do
one day you're going to rise from your habitual feast
to find yourself staring down the throat of the beast
they call the revolution

IMF dirty MF
takes away everything it can get
always making certain that there's one thing left
keep them on the hook with insupportable debt

[CGowen]

7. Maybe they can dig some up in Kosovo

TORONTO, ONTARIO -- (MARKET WIRE) -- 02/15/08 -- Lydian International Ltd. (TSX: LYD), a diversified U.K. mineral exploration and development company, today announced positive results from soil and trench sampling from its Rahovec project in Kosovo. The initial soil sampling program indicated a 1.5km long gold anomaly, which remains open to the north. The highest reported soil samples returned 1.87 g/t gold.

...

http://money.aol.com/news/articles/_a/significant-gold-results-from-lydians/n20080215103209990013






G7 approves IMF gold sales - Italy econ minister
Sat Feb 9, 2008 6:41pm IST

By Gavin Jones

TOKYO (Reuters) - The Group of Seven rich nations on Saturday approved the sale of gold by the International Monetary Fund from April as part of a broad reform of its budget, Italian Economy Minister Tommaso Padoa-Schioppa said.

"There was an acceptance among the G7 that resources should be raised by selling gold," Padoa-Schioppa, who is also the head of the IMF's steering committee (IMFC), told reporters after a meeting of G7 finance ministers in Tokyo.

...
"The current gold price means a flow of income can be ensured," Padoa-Schioppa said.

Morgan Stanley analyst Stephen Jen said the Fund held 103.4 million ounces of gold worth some $92 billion at current market prices. That was up from $23 billion just five years ago.

"The IMF is rich, if it wants to be," he wrote in a recent note to clients, issued before the G7's approval of the gold sales. "This is arguably a good time to consider selling some of these gold holdings and investing the proceeds in financial securities with positive yields."
...

http://in.reuters.com/article/businessNews/idINIndia-31847320080209

[flashl]

8. Or get in the Winnebago and head to Arizona

Gold fever is sweeping Arizona.

Mines are being reopened as gold fever sweeps state

Mining companies are scouring the earth, looking for new deposits and working to reopen venerable mines, some with histories that date to territorial days.

With the yellow metal selling for just under $900 per ounce, more weekend gold diggers are heading for the hills with pans, picks and metal detectors.

Prospecting outfitter Promack Treasure Hunting in Apache Junction has seen its business triple in the past year, and membership in the Superstition Mountain Treasure Hunters gold-panning club has grown to 400 from 70 in the same period.

Club leaders say members can return from a weekend of prospecting with $1,000 or more in gold.

"I wouldn't recommend quitting your day job, but you can make some real money out there," "Minnesota" Ray Ose said.