IMF to Dump Gold!

Discussion in 'Wall St. News' started by PAPA ROACH, Sep 18, 2009.

  1. All goldbugs will get fucked! So much for the hyperinflation idea. The powers that be see it otherwise and thank you for your bids.

    IMF Selling One Eighth Of Its Gold Reserves, Will "Safeguard Against Disruption Of The Gold Market"
    Submitted by Tyler Durden on 09/18/2009 16:33 -0500

    BanksCentral BanksGoldIMFInternational Monetary FundManipulationSalesUSVolume

    In what can only be called a rather surprising development, the IMF has disclosed it is selling 403 metric tons of gold, or about one eighth of its total gold holdings. The reason: to continue providing lending to the poorest countries. Just so readers visualize who these "poorest countries" are, and who this current manipulation in the gold market will presumably benefit, here is a map of the IMF's most recent activities:

    From the IMF:

    “I am delighted that the Executive Board has given its overwhelming backing to a strictly limited sale of Fund gold to put the financing of the IMF on a sound long-term footing, and enable us to step up much-needed concessional lending to the poorest countries,” Managing Director Mr. Dominique Strauss-Kahn stated. “These sales will be conducted in a responsible and transparent manner that avoids disruption of the gold market. Most importantly, the sales are strictly limited to 403.3 metric tons, which is one-eighth of the Fund’s total holdings, so the IMF will continue to hold a relatively large amount of its assets in gold.”

    The new income model is designed to provide the Fund with more diverse income sources that are better aligned with the variety of functions performed by the Fund, with a central component being the funding of an endowment with the profits from these limited gold sales. Resources linked to the gold sales will also be used indirectly to increase the Fund’s capacity to provide concessional loans to low-income countries (see Press Release No. 09/268).

    The gold sales could be conducted on-market in a phased manner over time, following the approach adopted successfully by the central banks participating in the Central Bank Gold Agreement. Participants in the recently renewed agreement announced ceilings on sales of 400 tons annually, and 2,000 tons in total during the five years starting on 27 September 2009, and noted that the Fund’s sales can be accommodated under these ceilings. Hence, on-market gold sales by the Fund will not add to the announced volume of official sales.

    As one of the elements of transparency, the Fund will inform markets before any on-market sales commence. In addition, the Fund will report regularly to the public on the progress with the gold sales.

    Conclusion: even more forced capital reallocation disguised as a "transparency" boosting initiative. Next up: rioting in Goldbugland.
  2. well, somebody has to do it because the good old USA is broke and cannot afford to do it anymore.

    How much of that supply do you think China will lap up since they are diversifying out of the dollar?
  3. the1


    Ok. so the IMF is selling gold. What does that do to the supply of gold or the demand for gold, or the confidence in monopoly money? It doesn't change anything and therefore, shouldn't change the price of gold. Unless the IMF can change the world's perception of artificial currencies it can only have a short-term influence on the price of gold.

    The price of gold is being driven by the perception that the USD is losing it's value. It really has no value to start with but it is perceived as having great value. That perception is beginning to erode, hence the rise in gold. What will the IMF do to restore faith? Perhaps they have the answer to that question but selling their stockpile of gold most certainly will not accomplish that mission.
  4. This should be an interesting view into global psychology. I would not be surprised to see this supply get snapped up fast as desperate parties seek to get out of dollars. In which case, the presumptuous assumption of goldbug doom will be proven wrong.
  5. Every time gold is over 1,000 per ounce in US dollar terms. the IMF announces that it will sell gold. This same announcement deflated gold last year after the panic. Nothing new, just more smoke and mirrors. But the people who pay attention to these international organizations, can capitalize on it. Just like how the G20 has agreed with opec to keep crude at 70-75 per barrel, no matter what the fundamentals look like. Free markets are a myth in the current global economy.
  6. Wallet


    I hope it drives the price back down $750-800 again, so I can buy some more.
  7. zorro


    Just one more nail in the coffin of the IMF...
  8. FB123


    What did you think? That they were just going to let it keep running over $1000 that easily? Not yet, grasshopper... we may need a serious and sudden crisis to break the back of this long-running manipulation.
  9. the whole purpose is to sell high. If gold goes back down a lot again, it will be a missed opportunity
    #10     Sep 19, 2009