The Executive Board of the International Monetary Fund Monday endorsed a new income framework for the IMF, which would permit the agency to sell up to 403.3 tonnes (nearly 13 million ounces) of its gold holdings to create an endowment to support the organization.
The IMF holds 103.4 million ounces of gold at designated depositories. Meanwhile, the IMF's total gold holdings were valued at $95.2 billion as of February 20, 2009, according to the agency.
Nearly 12% of these holdings--12.97 million or 403.3 metric tons with a market value of $11.9 billion as of February 20, 2008--are not subject to restitution to IMF member countries.
Under the plan approved Monday, the IMF could sell nearly 13 million ounces of gold for about $11 billion over the next several years, keeping $4.4 billion on its book and placing the remaining $6.6 billion in an investment account.
The Executive Board agreed to revamp the fund's income model from one that primarily relies on lending to one that generates funds from various sources. Key elements of the income proposal-particularly an amendment of the IMF Articles of Agreement to expand the fund's investment authority, will require legislative action in most member nations.
In addition, approval by the U.S. Congress is needed before the U.S. member of the IMF Executive Board can vote in favor of any IMF gold sales. The Bush Administration in February said it could accept a proposal to fund IMF activities through gold sales.
Treasury Undersecretary for International Affairs David McCormick said in late February that the IMF needed to shift its focus to three major arenas including: tougher surveillance of the currency regimes of IMF members; continued work on guidelines for how sovereign wealth funds should operate globally; and collaboration with IMF members to avert financial crises. McCormick specifically tied U.S. support for IMF gold sales directly to these incentives.
He told Thomson Financial at the time that "the United States will help ensure that the IMF has adequate resources to fulfill its vital global mission by seeking authority from Congress on a limited sale of IMF gold."
However, the IMF is not believed to be much closer to formally admitting that China has a problem with its currency. A former chief economist at the IMF told Forbes last month that he believes the U.S., Congress will require some movement on China's exchange rate and other issues before voting to allow the IMF gold sales. Congress rejected a previous IMF proposal to sell gold in 1999.
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http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=50364&sn=DetailThis is called tanking the price of gold.
Last time I read about price-fixing of gold by the IMF, it was to destroy the third world counties loaded with gold. By decreasing the value of gold by flooding the market, they control the poor gold producing countries. They have to sell their mines for food. Bang - the big countries gobble up the gold.
The question was, though - of the gold previous sold in bulk, who were the buyers? They never tell. Could it be China ,Russia?
also it could be that The IMF is simply selling their gold when the price of gold is high, at a price we may not see again for 25 years. It's an economically rational thing to do. People are selling their gold jewelry and heirlooms now and old gold mines are opening again. People are even panning for gold. All of that makes perfect economic seems
unlike most of the crap I read on that site.
Anybody care to explain why a "non-profit" organization like the IMF needs 95 billion in gold reserves? GTO
