I.M.F. - Gold Sales or No Sales?

By: Julian D. W. Phillips | Mon, Dec 4, 2006
Print Email

From - www.goldforecaster.com 4th December 2006.

We were surprised to hear that the employees of the International Monetary Fund have actually suggested sales of gold from their stocks to cover income shortfalls they have. We are even more surprised to hear silence from the Members of the International Monetary Fund. The calls they made echoed the calls from the German government and the French government to sell national gold for the same reasons, to shore up shortfalls of income.

Of course in the case of the I.M.F. the calls were made by people completely unqualified to make the call, as the gold is the property of their individual members and not the I.M.F. per se.

Permission of the members is needed before such sales can take place to the extent of 85% of the votes of the members including the U.S. Hence they well know that there are virtually zero chances of this happening.

The IMF holds 3,217 tonnes of gold [103.4million ounces of gold], valued at today's prices at over U.S.$66 billion. The I.M.F. acquired its holdings from member states through the original Articles of Agreement. [The Articles were amended in 1978, eliminating the direct use of gold in the exchange rate system]. The Articles of Agreement require any gold transaction to have an 85% majority of total voting power. The U.S. alone has 16.83% of the voting rights. For the US to support a sale, Senate approval is necessary. They have rejected any such call in the past and are more so likely to do so now. Other countries are also known to be against any sale. So these calls are likely to be ignored as ere the last calls.

In the past the I.M.F. did sell gold after the U.S. ceased to do so. The U.S. then supported the call to sell. Since then the U.S. has not sold its own gold or persuaded the I.M.F. to do so. The present I.M.F. attitude to Gold is:

Photo falling money - Joachim Angeltun"It is an undervalued asset held by the IMF, and provides a fundamental strength to its balance sheet. Gold holdings provide the IMF with operational maneuverability both as regards the use of its resources and through adding credibility to its precautionary balances. In these respects, the benefits of the I.M.F.' gold holdings are passed on to the membership at large, to both creditors and debtors. The IMF should continue to hold a relatively large amount of gold among its assets, not only for prudential reasons, but also to meet unforeseen contingencies."

Having said that the function of the I.M.F. is to act as a central monetary body. As part of this function it issued what it had hoped would be the ultimate currency, the "Special Depository Receipt" or S.D.R. against which, nations could issue their own currencies. The I.M.F. would simply issue more S.D.R.'. But few nations fell for this as it would be another paper currency, but under the effective control of the U.S. That horse didn't run and the S.D.R. is certainly not accepted as the globe's pivotal currency. But we do expect the battle between government controlled paper currencies and independent gold to continue, ad nauseum.

HIGHLIGHTS in "Gold Forecaster - Global Watch"
SHARES: HUI, GFI NEM, FCX, Copper, NG, VGZ, TBLC - Gold / Juniors / Explorers Portfolio
Index:
1-2. Market Forecasts / Short-term forecasts across the Board!
2-3. Comex Update
3-18. Central Bank Gold Sales in 2006 / Gold E.T.F. / Gold & Silver / I.M.F. Gold sales or no sales/The U.S.$ Crisis draws near/ The Oil Crisis / Gold: Oil Ratio / Dow Jones / Technical Analysis of the Gold Price: Long / Short term in the U.S. $ / Treasury Notes / CRB Index / Gold and the host countries & Market currencies - Europe - S. Africa - Australia - Canada - Japan - India
18 - 25. Gold Shares & Portfolio

Do you want to receive your own copy of Article from "Gold or Silver Forecaster"? - Send your e-mail address to: gold-authenticmoney@iafrica.com.

Subscribe to "Gold Forecaster - Global Watch", through: www.goldforecaster.com.
Subscribe to "Silver Forecaster" through: www.silverforecaster.com.

 


 

Julian  D. W. Phillips

Author: Julian D. W. Phillips

Julian D. W. Phillips
Gold Forecaster

Julian D. W. Phillips

"Global Watch: The Gold Forecaster" covers the global gold market. It specializes in Central Bank Sales and details, the Indian Bullion market [supported by a leading Indian Bullion professional], the South African markets [+ Gold shares shares] plus the currencies of gold producers [ Euro, U.S. $, Yen, C$, A$, and the South African Rand]. Its aim is to synthesise all the influential gold price factors across the globe, so as to truly understand the global reasons behind the gold price.
FIND OUT MORE

Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Gold-Authentic Money / Julian D. W. Phillips, have based this document on information obtained from sources it believes to be reliable but which it has not independently verified; Gold-Authentic Money / Julian D. W. Phillips make no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Gold-Authentic Money / Julian D. W. Phillips only and are subject to change without notice.

Gold-Authentic Money / Julian D. W. Phillips assume no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit which you may incur as a result of the use and existence of the information provided within this Report.

You should be aware that the Internet is not a completely reliable transmission medium. Neither Gold-Authentic Money / Julian D.W. Phillips nor any of our associates accept any liability for any loss or damage, including without limitation loss of profit, which may arise directly or indirectly from your inability to access the website for any reason or for any delay in or failure of the transmission or the receipt of any instructions or notification sent through this website. The content of this website is the property of Gold-Authentic Money or its licensors and is protected by copyright and other intellectual property laws. You agree not to reproduce, re-transmit or distribute the contents herein.

Copyright © 2003-2016 Julian D. W. Phillips

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com