IMF Board Backs Plan to Sell 403.3 Tons from Gold Holdings
April 8th, 2008Via: Dow Jones:
The International Monetary Fund’s executive board Monday signed off on a broad financial reform plan that proposes to put 403.3 tons of its vast gold holdings up for sale.
IMF Managing Director Dominique Strauss-Kahn applauded the board’s decision to propose a new framework designed to close a projected $400 million income- expenditure gap within a few years.
It’s “a landmark agreement that will put the institution on solid financial footing and modernize the IMF’s structure and operations,” he said in a statement, noting that the board agreed on a medium-term budget proposal with sharp spending cuts of $100 million over the next three years.
Still, the IMF can’t kick off its gold-sale program – a key element of the its plan to diversify its revenue stream and boost income – until it receives a green light from the U.S. Congress.
A senior IMF official confirmed the board can’t make a decision Monday to actually start the sales because the U.S. executive director for the fund can’t vote for the sales because he doesn’t yet have congressional backing.
Under the plan, the IMF would sell the 403 tons, or nearly 13 million ounces, of gold for about $11 billion over several years, according to the senior IMF official. The IMF official said the fund would keep $4.4 billion on its books and put the remaining $6.6 billion into its investment account.
Additionally, IMF would coordinate the sales with central banks in an effort to prevent any market disruptions, the official said.
“Gold sales would be conducted in a transparent manner with strong safeguards to ensure that they do not add to official sales and avoid any risk of market disruption,” the IMF said in a notice Monday afternoon.
While a senior U.S. Treasury Department official has signaled his support for the limited gold sales as a way to ensure the IMF’s long-term funding capabilities, it is unclear how Congress will respond. Congress, in 1999, rejected a previous proposal for the IMF to sell gold.
In addition to creating an endowment from the gold sales, the IMF also plans to expand its investment authority, which is currently very narrow.
IMF’s investment authority would be broadened to enhance the average expected return on the fund’s investments and enable it to adapt its investment strategy over time, the IMF said in its notice.
Sounds to me like the IMF has a BRAIN. Imagine, putting real money up for sale.
How audacious, how bold, how forward thinking.
Of course, the US Congress holds none of the qualities described above, so DO NOT BE SHOCKED when this forward thinking idea is quashed, stompted on, and beaten as an unruly child by the US Congress.
The US Congress, oh my. Well I guess there’s no way around it. They ARE the military industrial complex.This idea, of making money PEACEFULLY will be flushed before this “turd” of an idea hits the toilet.
There is a super-capitalism which is supported wholly by the fiction that gold is wealth. -Henry Ford
http://snipurl.com/23s38 [books_google_co_nz]
This is how GATA sees it:
If one puts today’s news together …
1) The Arabian Gulf oil principalities say they’ll stick with the U.S. dollar until they achieve monetary union in 2010 (see the report appended here).
2) The World Gold Council and a commodities group in Dubai announce a gold exchange-traded fund to be operated according to Islamic financial principles.
3) And the International Monetary Fund announces that it has formalized its plan to sell 403 tonnes of gold. …
… it may be hard not to wonder if the oil states have not made a deal with the United States to continue for another two or three years their cooperation with the U.S. scheme of rigging the currency and gold markets in exchange for whatever gold is to be unloaded in the name of making the IMF solvent — hard not to wonder whether this is not all part of an orderly hedging of the oil world’s dollar exposure.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
$11 billion. A rounding error. The Fed is minting this much money at the TAF every few days. Yawn.
403.3 short tons = 12,905,600 ounces
12,905,600 ounces * 900 $/oz = $11,615,040,000