Posted on 03/12/2009 6:56:25 AM PDT by TigerLikesRooster
Getting the IMF to take the heat — and sell its gold?
Posted by Gwen Robinson on Mar 12 12:36.
The latest partial solution to many problems besetting - well, all kinds of sectors and areas of the world - seems to be to pump money into the IMF (ie, to massively expand the so-called “New Arrangements to Borrow”, a system by which the fund can borrow from its richer members - or, under the EU’s new proposal, reserves-rich members) and no doubt get it to bail out Eastern Europe.
/snip
As the FT reports Thursday, US Treasury secretary Tim Geithner ahead of the G20 finance ministers’ gathering in London this weekend called for the tripling of IMF funds - from about $250bn in readily available funds to about $750bn - and urged governments around the world to undertake bigger fiscal stimulus measures.
Ideally, in the eyes of some of the G20, the IMF - borrowing from countries such as Japan, which pledged some months back to make $100bn available if required - could then take the heat.
/snip
So, suggests Jen, the IMF should consider selling its gold holdings:
Gold prices are high and, with 100.3 million ounces of gold, the IMF could secure close to $100 billion on its own, using its own resources. The EU’s latest suggestion, to be formally proposed this weekend … is for the reserves-rich nations in the world to contribute to the doubling of the IMF’s resources. This will not be straightforward as the EU is (i) refusing to put up most of the financing needs to bail out Eastern Europe and (ii) asking emerging economies to put up the IMF financing without a commensurate increase in their voting rights on the IMF’s Board. .
(Excerpt) Read more at ftalphaville.ft.com ...
Ping!
Right on schedule. The goldbugs were saying last week that it’s about time for the IMF to start making some noise about selling gold in order to scare safe-haven folks. Looks like they have the FT in their pocket.
Can you imagine China sitting there right now, just waiting for the IMF to put this stuff out there for purchase? They’ll take every ounce, every one of them.
How and why does the IMF have so much gold????
Do you really think that the Chinese would want to trade worthless US paper for gold with the IMF at par value?
“Do you really think that the Chinese would want to trade worthless US paper for gold with the IMF at par value?”
Not sure if you have the ‘sarcasm’ tag attached to your comment, but assuming the question has seriousness attached to it, yes I do. Facts are, the current ‘worthlessness’ of the U.S. paper is not properly recognized as of yet, and certainly isn’t reflected in the current price of gold. At some point in the next five years it very well might be, at which point they would be happy to have made the exchange.
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