Got Gold? Head Of IMF Policy-Steering Committee Says Fund Needs $320 Billion To Be "Properly Resourced"

Tyler Durden's picture

Those observing the emperor's lack of clothing are multiplying. Earlier today, someone opened their mouth, and remarked on the blatantly obvious. Next thing you know Hungarian CDS was 30% wider, Romanian bond auctions were failing, the euro was tumbling, the PPT was scrambling, US markets closed green with nobody trading, etc. Yet the "letting the genie out of the bottle" award of the day has to go to the head of IMF's policy-steering committee, Youssef Boutros-Ghali who said that the IMF is essentially insolvent in its current form of being the go to backstop for a European bailout. "If we are going to start including funds made available to
Europe, then the IMF is not properly resourced," Youssef
Boutros-Ghali told Reuters, adding that IMF members were
talking of doubling the amount of SDRs
. The means the IMF is $318 billion short of solvency. And what is the IMF long? Why gold...3,005 tonnes worth.

The IMF has to have more resources after the support for Greece and needs to "very significantly" increase the amount of special drawing rights, the head of the Fund's policy-steering committee said on Friday.

What does this mean in English? The IMF currently has 204 billion in allocated SDR to member countries (or $318 billion). Boutros-Ghali has basically said that in order to preserve its front-man status as a world bailout force (just because the Fed knows that the political whiplash of it being the bailout provider of last resort would mean the end of it, thus needing a strawman such as the IMF), the IMF will need to raise another $318 billion. Where will the IMF get that money? Here's an idea: the IMF holds 3,005 tons of Gold. At today's fixing, this equates to just over $116 billion (and much more should the price of gold mysteriously skyrocket). Of course, any fiction that the SDR is backed by gold will then disappear, but it's not as if anyone even remotely pretends that any fiat currency (and the SDR is no exception) has any value left whatsoever. And since the US will end up having to fund the bulk of the SDR allocation, at least US taxpayers would be on the hook for a far more manageable $200 billion that the IMF needs in order to fully bail out Greece and everyone else in Europe.

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WilliamShatner's picture

Anyway, this could be the thing that'll be used to drive the gold price down.

A big "ooga booga" to scare everyone into stearing away from gold because they'll envision this massive quantity of gold "flooding the market".

Might get a chance to add to my stack soon.

Hephasteus's picture

Just keep 1176 support in mind. It's a line not easily crossed.

tmosley's picture

Let's hope so.  I hope they hold out until the middle of July, as I am coming into some FRNs at that time, and I've been wanting to add a big stack of Roosevelt dimes and some fractional gold to my collection.

DoChenRollingBearing's picture

How about that.  I get some money in July too, some of which will go to yummy purchases of Au, Pt, and Ag.

As I was zigging and zagging over there at the Peace Flotilla War Zone earlier, I think I saw you around.  Whew!  My first post got junked off (20x) in a bit over an hour.  So I now am in a comfortable gold thread where I don't have to bring my AK-47...

Assetman's picture

My understanding was that the IMF have been pretty active sellers of gold reserves over the last 6 months or so anyway.

SWRichmond's picture

It will be interesting to see if officialdom's trend of trying using gold to try to recapitalize the system continues.  That is what they are doing, after all, isn't it?  As much as they badmouth it, they are using it as capital.  Is the IMF in this case a proxy of sorts for the central banks, so that the CBs can claim they never sold any barbarous relic, never relied on it, never did anything useful with it...?  Someone pointed out that the IMF doesn't really own anything but rather gets its money and gold from member countries.  The IMF merely provides a level of obfuscation; governments are the actors, and international banksters through them in turn.  See what I mean?

Hansel's picture

By driving the price down they only hurt themselves.  They would have to sell all of their gold at about triple today's price to break even on their fundraising goal.  I'm thinking they sell hardly any of it, and the BIS "sells" SDRs to the central banks, which the central banks always value at par.  The BIS gets cash, the central banks get SDRs (which are better than gold in ponzinomics), and the IMF can hand out lots new fiat.  Or something like that.

Turd Ferguson's picture


criminals will use the "fear" of IMF gold sale as excuse to suppress price and buy more time


Spitzer's picture

You have a short memory. Look at what happened when they did that last time. India stepped up and gold went to 1227

Mission Stupid's picture

+ Star Trek.  Love the avatar.

akak's picture

But does the IMF really hold any gold of its own, or is it all doubly-counted bookkeeping entries that are simultaneously held on the books of its member nations?  I have NEVER read any reference to where the IMF holds its supposedly unencumbered gold, nor have ever read of any physical transfers that ever took place following any announced IMF sale.  Is the very concept of separate IMF gold a complete farce?

TooBearish's picture

More like electronic version of gold, the IMF is not a sovereign but a Bernie Madoff clone, where SDRs are swapped for the "gold," at light speed.

cbaba's picture

Nope, just opposite, it will push the Gold price up.

Remember first time we heard about this IMF gold was from Soros, he was telling that IMF should sell their gold to raise money for poor countries and spend it to fight poverty.

His point was this gold should be exposed so that it cannot be used behind the doors operations from FED,BE,LMBA,JPM,MS,GS etc. who actively manipulate the gold price all the time.

They already lend, used this gold many times , it may  exist 3000 tons in IMF accounts but they are stored in Vaults in Big dealers and has already been sold may be 10 times with the leverage..

IF The IMF openly sell this gold many central banks will rush to buy it and Cartel will loose the price control.

That's what Soros was expecting, he hoarded gold and expecting to make a killing when the price hits the roof.


lance_manion's picture

 Edit:  *corrected*

boeing747's picture

Less than 5 days before May 6th crash, I predicted in a comment here that stock market will be 'nuked' after one ZHer posted "China is secretly purchased physical gold in Mid East market' and Dubai installed 1st Gold ATM. Right after May 6th crash, I also posted here that Gold and emerging markets will be 'nuked', since then Gold stopped crazy rising and Shanghai index slipped further much low. This will continue for at least six months, then complete story starts, let's see. Thanks ZH for valuable info.

RockyRacoon's picture

Lots of folks wondering why China doesn't buy up all the loose gold in the world, including the IMF gold "selling".  The reason is that the Chinese do not want the yuan to appreciate. Simple as that.  So, one must ask, why would buying gold make the yuan appreciate?  Because that would imply a gold backing to the currency!  Imagine that.  Simple information like that should give the gold-bashers some pause.

Trimmed Hedge's picture



Buy now or be priced out forever!

Nolsgrad's picture

gook was funnier

jory's picture

This is the same predicament all Goldbugs will be in .  Forced sellers to raise Cold Hard Cash to pay the bills.  But I thought Gold was money?  


Nihilarian's picture

'LMFAO' is right, but not for the reason you think.

doggings's picture

indeed, I do a lot of that at these numpties.

swap real money for paper? definitely LMFAO!!!!! I would default long before that, having maxed credit cards to buy more.


Popo's picture

" I would default long before that, having maxed credit cards to buy more."


Oh oh.  I'm a believer in $5000 gold... but I'm also a believer in the distinct possibility (probability?) that the powers that be will smash the price down (hard) in the near term.  Careful with that leverage there doggings.

doggings's picture

leverage? :) you misunderstand.

i dont intend to max any credit cards out to buy gold,  but if I did, I wouldn't be paying it back? leverage is only leverage if you have any intention of paying it back, otherwise "gift" would be a better word ;)

I was only responding to numpty saying people would be selling Gold to get paper, by saying that trade is only ever going to be in the other direction for me now until Dow Gold is at least 1.5 / 1 if not better.

into Gold, out of paper.  fullstop.

Nolsgrad's picture

that could present and interesting predicament, except that person you pay won't want bills cause they're trash and would prefer gold or silver. good try though.

aaronvelasquez's picture

Did you just find this site and decide to blanket it with your single opinion on all threads?

homersimpson's picture

Jory go back to your CNBC forums.. you clicked on the wrong website.

BlueDonkey's picture

when the shtf jory will be long sdr's and if he does get "enlightened" before then he might even be long paper gold

Spitzer's picture

what if your rich ? gold is to protect money you dont plan on spending

ColonelCooper's picture

Ding Ding Ding!  I see a short little school bus pulling up in front of your house.  Time to stop visiting with your friends Jory.  Put your helmet on, and run along to school.  Try to keep from licking the windows today sweetheart?  Mr. Jessup says he's not going to let you on the bus anymore if you keep it up.  I guess he's a little put off about the whole "adult" diaper thing.  Here are your crayons and safety scissor.  The teacher asked me not to send anymore paste with you after the last time.... I guess the whole vomiting on little Susie Calwell was uncomfortable for some people.  I meant to ask you, "how did you swallow a whole dog turd"? 

Bye Douche.


hangemhigh's picture


something like what you scoff at actually happened once before.  prices quoted in paper money were cut in half and prices quoted in PM's were cut in half again.  so, during that time frame, those holding PM's clearly had the hammer. 

fortunately for both the TPTB, and the morts, this situation did not last long. 

unfortunately, this time mostly for the morts, part of the solution sent  % rates to the moon;

if i remember correctly, the fed funds rate hit 14%



fasTTcar's picture

God, we are going to start printing SDR's now.


Bullion Bitchez!

Cheeky Bastard's picture

adding that IMF members were talking of doubling the amount of SDRsThe means the IMF is $318 billion short of solvency. And what is the IMF long? Why gold...3,005 worth.


No. more like sub-1k if they do this. They will just fractionalize with 50x multiple x% of the gold they have and dump it to LBMA which will in turn use said non-existing gold to short the market before UE #s and options expiration dates. That should give JPM 10 years worth of "supply" to manipulate the markets. Also, it should dot wonders for SPDRs "gold" holdings.

brushfire's picture

cynicism is a bitch cheeky. while you may be right, it is beginning to feel like we are circling the drain no? keep in mind that andrew maguire has called JPM on the carpet regarding fractionalization and market manipulation. the psychological effects that the affiliated DOJ case has on those playing in the paper gold markets is difficult to quantify, but i think people are on edge. this could collapse at any time. plan accordingly. 

Nihilarian's picture

The circle jerk will come to an end when physical delivery will be demanded. When that happens, all derivative holders will run for the exits at once. 10 years, 2 years, I don't know when 'savvy' investors will realize they've been getting their salad tossed by madoff-type prospectuses.

Cheeky Bastard's picture

Tell me about it man. Just the other day a couple of us ZHeedgers had a discussion about how there is some dark, ominous feeling in the air. About something big happening in a month or two. While everyone assume that it might be among the sovereigns, or with this BP situation, my eyes are focused on gold. If the gold mechanism fails [the current gold mechanism employed by the LBMA, IMF and various synthetic ETFs] I really do not know what will happen. LEH will look like child's play. Sure my asset holdings will skyrocket and I will be multiple times "wealthier", but on a macro-scale SWHTF. LBMA already has the problem in suppressing the price of gold before OE dates, and on some days it seems as if they might not pull it off, but they usually do; but the action leading up to their desired price is more volatile and unlike anything I have seen before.

Hephasteus's picture

Quit lying cheeky. You're just like me. You don't give a shit about being multiple times wealthier and being validated. You're sick. I'm sick. Neither of us could enjoy it. It's been 20 years since wealth would have done damn thing for me. You're doing it because no how smart and how easy things go for the assholes in charge there's always people here to remind them just how easy it is to roll them.

Burnbright's picture

Eh surpressing the gold price is just a price control mechanic. Not sure what the out come will be when gold and silver runs out but it will be fun to watch the fire works. Go long popcorn imo.

nuinut's picture

IMF have exactly zero, just paper promises from members, who are highly unlikely to cough up any physical at this point in time.

This is just more bullshit propaganda from Uncle Sam, who is really feeling the heat now, judging by the way the MSM/press release anti-gold, pro US patriotism faucet has been opened good and wide this week.

Example: Check it out...

Not only are we circling the drain, but I can hear that sucking noise getting louder too.


As we had all been noticing, the water was getting cold, anyway.