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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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Thu, 06/03/2010 - 23:17 | Link to Comment WilliamShatner
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.

Thu, 06/03/2010 - 23:23 | Link to Comment Hephasteus
Hephasteus's picture

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

Thu, 06/03/2010 - 23:25 | Link to Comment tmosley
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.

Thu, 06/03/2010 - 23:36 | Link to Comment ratava
ratava's picture

farcional gold? 

Thu, 06/03/2010 - 23:57 | Link to Comment DoChenRollingBearing
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...

Fri, 06/04/2010 - 08:25 | Link to Comment Ted K
Ted K's picture

Sir, you are mistaken, Marla Singer reported earlier those were waterguns with red ink ammo.

Thu, 06/03/2010 - 23:42 | Link to Comment Assetman
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.

Fri, 06/04/2010 - 07:28 | Link to Comment SWRichmond
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?

Thu, 06/03/2010 - 23:55 | Link to Comment Hansel
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.

Thu, 06/03/2010 - 23:57 | Link to Comment Turd Ferguson
Turd Ferguson's picture

exfuckingactly

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

fuckers

Fri, 06/04/2010 - 01:24 | Link to Comment Spitzer
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

Fri, 06/04/2010 - 01:36 | Link to Comment Mission Stupid
Mission Stupid's picture

+ Star Trek.  Love the avatar.

Fri, 06/04/2010 - 03:53 | Link to Comment akak
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?

Fri, 06/04/2010 - 07:04 | Link to Comment LeBalance
LeBalance's picture

thank you

Fri, 06/04/2010 - 07:18 | Link to Comment TooBearish
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.

Fri, 06/04/2010 - 07:46 | Link to Comment cbaba
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.

 

Thu, 06/03/2010 - 23:18 | Link to Comment lance_manion
lance_manion's picture

 Edit:  *corrected*

Thu, 06/03/2010 - 23:17 | Link to Comment boeing747
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.

Fri, 06/04/2010 - 11:40 | Link to Comment RockyRacoon
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.

Thu, 06/03/2010 - 23:17 | Link to Comment Trimmed Hedge
Trimmed Hedge's picture

Gold... GOLD... GOOOOLLLLDDDD!!!

 

Buy now or be priced out forever!

Thu, 06/03/2010 - 23:20 | Link to Comment Nolsgrad
Nolsgrad's picture

gook was funnier

Thu, 06/03/2010 - 23:23 | Link to Comment lance_manion
lance_manion's picture

+1

Thu, 06/03/2010 - 23:20 | Link to Comment jory
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?  

LMFAO!!!!!

Thu, 06/03/2010 - 23:25 | Link to Comment Nihilarian
Nihilarian's picture

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

Fri, 06/04/2010 - 05:50 | Link to Comment doggings
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.

 

Fri, 06/04/2010 - 07:40 | Link to Comment Popo
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.

Sat, 06/05/2010 - 10:35 | Link to Comment 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.

Thu, 06/03/2010 - 23:25 | Link to Comment Nolsgrad
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.

Thu, 06/03/2010 - 23:36 | Link to Comment aaronvelasquez
aaronvelasquez's picture

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

Thu, 06/03/2010 - 23:42 | Link to Comment homersimpson
homersimpson's picture

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

Thu, 06/03/2010 - 23:58 | Link to Comment Turd Ferguson
Turd Ferguson's picture

You're such a duchebag

Fri, 06/04/2010 - 00:15 | Link to Comment BlueDonkey
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

Fri, 06/04/2010 - 07:41 | Link to Comment Popo
Popo's picture

What's a duchebag?

Fri, 06/04/2010 - 09:33 | Link to Comment TheDriver
TheDriver's picture

Here, let me Google that for you.

http://lmgtfy.com/?q=douchebag

Fri, 06/04/2010 - 01:53 | Link to Comment Spitzer
Spitzer's picture

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

Fri, 06/04/2010 - 07:11 | Link to Comment ColonelCooper
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.

 

Fri, 06/04/2010 - 11:17 | Link to Comment hangemhigh
hangemhigh's picture

Jory:

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%

 

 

Fri, 06/04/2010 - 11:27 | Link to Comment hangemhigh
hangemhigh's picture

deleted by poster

Thu, 06/03/2010 - 23:27 | Link to Comment DavosSherman
DavosSherman's picture

fucking morons

Thu, 06/03/2010 - 23:30 | Link to Comment Kali
Kali's picture

lol, I love ZH!

Thu, 06/03/2010 - 23:34 | Link to Comment fasTTcar
fasTTcar's picture

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

 

Bullion Bitchez!

Thu, 06/03/2010 - 23:34 | Link to Comment Cheeky Bastard
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.

Thu, 06/03/2010 - 23:43 | Link to Comment brushfire
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. 

Thu, 06/03/2010 - 23:54 | Link to Comment Nihilarian
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.

Thu, 06/03/2010 - 23:55 | Link to Comment Cheeky Bastard
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.

Fri, 06/04/2010 - 00:54 | Link to Comment Hephasteus
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.

http://www.youtube.com/watch?v=6a-DiKhT4Uo

Fri, 06/04/2010 - 01:14 | Link to Comment Burnbright
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.

Fri, 06/04/2010 - 01:22 | Link to Comment nuinut
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.

Fri, 06/04/2010 - 01:48 | Link to Comment Mission Stupid
Mission Stupid's picture

You know who will survive this crisis?  Wealthy religions!  If you want a lesson on wealth preservations look to the asset holdings of the Catholic Church.  Land  and Gold bitchez!

Fri, 06/04/2010 - 02:22 | Link to Comment faustian bargain
faustian bargain's picture

The Mormons are not too shabby in that department either.

Fri, 06/04/2010 - 02:44 | Link to Comment nuinut
nuinut's picture

 

Here's a theory, since no one really knows how the IMF works in practice:  

 

When you join the IMF as a member nation (like joining a country club), you pledge a certain amount of your gold, but you don't ship it to NYC.  You keep it in your own vaults, wherever they may be (which may be NYC).  If the IMF ever disbands, you of course get to keep your gold.  

 

But if you get in trouble and need the IMF's help, the IMF will bail you out with one of the fiats in the SDR basket (almost always the dollar) but at this point you are no longer a "member", you are a "ward" and the IMF becomes your custodian or your guardian.  The IMF now takes physical possession of your pledged gold (which in some cases is already in NYC, it doesn't even move) and you only get it back if and when you pay back the loan in full, with interest, and abide fully by all austerity measures the IMF recommends.   

 

The 400 m.t. the IMF is now selling are the sum total of all physical they have taken in from "bad" nations over the past half century.  But like a good $IMFS cheerleader, they are willing to part with that gold on a whim, all at once, even though it took decades to accumulate.  (ref. the Bundesbank speech by Ernst Welteke, BUBA pres 2004; http://www.bis.org/review/r040206b.pdf - "The gold reserves have been accumulated from external economic activities over a prolonged period. Hence, it is appropriate to manage this asset in a manner which safeguards its underlying value. Future generations should also be able to derive benefit from this asset.)  

 

But herein lies the problem with the IMF assisting the ECB in the Greek bailout.  The IMF cannot take Greece's gold because it is now pledged to the euro-Freegold project through the ECB/BIS.    So what do we get? 

We get Boutros-Ghali publicly whining the IMF "is not properly resourced"!!!!!

 

 

Q.E.D.

 

Fri, 06/04/2010 - 07:03 | Link to Comment taraxias
taraxias's picture

Greek gold is still in a vault in Athens. "Pledging" it is one thing, handing it over is another. The Greeks may have be spending over their means, but stupid they are not.

Fri, 06/04/2010 - 01:30 | Link to Comment Tapeworm
Tapeworm's picture

The IMF gold is a notional construct at best. The IMF has gold by way of pledges from the original members but they do not have ownership as the signatory countries could not give away their respective treasury holdings without due consideration. I will guess that there are some heated conversations going on about this crap of the IMF selling the signatories metal. IOW, I do not believe that there is real metal changing hands unless the signatory central banks are cool with selling their respective country's assets.

 After the legalities that no CB cares to respect, then we need to know the sell to whom.

Fri, 06/04/2010 - 03:54 | Link to Comment AnAnonymous
AnAnonymous's picture

IMF gold comes mostly from the business of extraction they had with South Africa. IMF was just the transfer vector of gold outside of South Africa (which also provided the prosperity South Africa boasted about. For the suckers who follow who will have to deal with dwindling gold mining capabilities, the story is going to be a different one)

IMF gold is as real as South African gold could possibly be.

Fri, 06/04/2010 - 04:06 | Link to Comment akak
akak's picture

That is all a fascinating hypothesis, for which I have never read nor seen any evidence.

Care to back up that rather wild claim with some facts?

Fri, 06/04/2010 - 05:57 | Link to Comment AnAnonymous
AnAnonymous's picture

I suppose IMF own admission of this fact is not enough for you so no, I have nothing about that.

Fri, 06/04/2010 - 07:18 | Link to Comment ColonelCooper
ColonelCooper's picture

I guess what he's getting at is,,,,, like you got a link or sumptin?  Maybe the name of the magazine you read about it in? 

Sorry that your just calling it a fact wasn't enough for some of the haters around here.

 

Fri, 06/04/2010 - 10:24 | Link to Comment AnAnonymous
AnAnonymous's picture

I've just checked. The IMF site has a faq on where they acquired their gold (I suppose they got that question frequently asked enough to write a FAQ on it)

Reads like a very  obvious source to look at when you have never read or seen any evidence of it.

So I stand my ground.   Nothing in the bag that could convince the guy as the IMF own admission is not enough for him.

Fri, 06/04/2010 - 05:01 | Link to Comment doomandbloom
doomandbloom's picture

this is getting spooky...

Fri, 06/04/2010 - 00:08 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I feel like we've been circling the drain for months.  I'm so glad I am out of the whole work for zip routine and got into gold.

Only big problem with the Mad Max SHTF scenario is I live in a condo.  But, my gold and guns & ammo will go to my kid if the end draws near...

If it is not Mad Max, I'll be alright.

Fri, 06/04/2010 - 00:21 | Link to Comment brushfire
brushfire's picture

patience is called for. if nothing else, the US Treasury market will force everyone's hand. i fear the timeframe for a collapse in the treasury market is within a decade, which is really quite scary. dont get caught up in the static. short term nothing is certain. long term, we all know how this ends.

Fri, 06/04/2010 - 00:40 | Link to Comment JLee2027
JLee2027's picture

Circling the drain, I love it!  

The manipulation is in the final stages.  It blows it's top this year.

Fri, 06/04/2010 - 00:13 | Link to Comment velobabe
velobabe's picture

Mi scusi

bastard†

 

L  B  M  A     over it babe.

just did the thursday night bike ride. got to have a back tail light, though.

crazy, all 20 somethings.

the youth in america, honest their is some hope for the .025% of the male population when they are collectively accepting velobabe, guidance.

male after female

that really is all that it is about.

see it, smell it and witness it, i thinkin that is it†

         we are quite lucky, frankly in america and UK.

 

 

cheeky your educational in a way, for me.

i am sooooooooo educational for the male american that rides a bike.

h o n e s t.

s p r e a d   t h e   l o v e†

Fri, 06/04/2010 - 00:14 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Me thinks La Italiana likes you Cheeky...  Better go hide if you don't want your marriage wrecked!

...

Velo, I do not know Europe REAL WELL, but it is nice.  I will stay here though.  You know, all those unstable euro-paper-thingys.  Glad you had a safe bike ride at night here in America, bikers are at risk at night here.

Fri, 06/04/2010 - 00:54 | Link to Comment velobabe
velobabe's picture

i got junked two times,

let me take it to you, two times,

sublime

               honest i forgot what i was going to say.

now i am thinking it is the picture, not the content, damn†

     kathy needs to fall a sleep.

crazy paris thing going on right now.

first time italiano female, in the french open, against SS

federer out, rafa, you virgin baby.

tiger may not make the cut in O H I O

Fri, 06/04/2010 - 00:57 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Well, I did not junk you Velo.  I love your posts, really.

My wife just made me read a book called "Choosing Civility", so I am trying to be nicer, more generous, more decent, etc.

I was only warning Cheeky that he had better run & hide if he wants to keep his marriage intact!

Fri, 06/04/2010 - 07:20 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

Im not married DCRB; twice divorced, but currently not married [and chances are pretty high I will never again be married].

Fri, 06/04/2010 - 09:21 | Link to Comment velobabe
velobabe's picture

yeah r i g h t, that's what they all tell me.

and something else, im sure you know what that one liner is†

 

like the concept of kanji, though.

that's what i am calling my new photo art

K A N J I

Fri, 06/04/2010 - 03:18 | Link to Comment Privatus
Privatus's picture

velobabe, I need some of what you are on.

Fri, 06/04/2010 - 06:54 | Link to Comment velobabe
velobabe's picture

W O W   i am going for an all time many junks for veloblade.

 

http://www.youtube.com/watch?v=-PYYRR78xGY

 

http://www.keepboulderweird.org/

http://www.newwest.net/city/article/thursday_cruiser_ride_an_antidote_to...

The Ride Guide
To have fun and to be nice to everyone...
To ring thy bell, To wish everyone well...
To sing, to dance, to make merry,
To not bring more than I can carry...
To leave no trace, to Cruise and not to race...
To ride in control and not be a troll...
To stay to the right and to ride with a light...

And of course to say... "Have a Happy Thursday!"

 

plus who cares about being  M A R R I E D, it's all in the mind†

Thu, 06/03/2010 - 23:38 | Link to Comment beastie
beastie's picture

Jory just to help you connect the dots. Sterling can be swapped for US Dollars and vice versa. However those currencies are not acceptable all over the world.

The difference is I know my goats, ganje and gold can be swapped in any country at any time can you say you the same for Sterling or the USD?

I'll help you out here the answer is no they can't. The major difference is I can pack a lot of gold into a suitcase and fly into any civilised country in the world in almost limitless amounts. Can't say the same for USD or any other currency can you.

So now we are down to just gold as a truly international currency as I am not paying to bring my goats on a plane and I can alway grow more ganje.

 

I have a feeling a few rolls of quarters is about your speed though.

So my trading advice is stick with the goats and ganje and use the proceeds to acquire some gold.

Thu, 06/03/2010 - 23:53 | Link to Comment jory
jory's picture

Is "Beastie" what your boyfriend calls you?  LMFAO!!

Let me connect a few dots for you.  Gold isn't money anywhere in the world.  Understand that?  It isn't used anywhere in the world as a medium of exchange.

I think you've been smoking too much of your Ganje.  

 

Thu, 06/03/2010 - 23:59 | Link to Comment Turd Ferguson
Turd Ferguson's picture

douchebag

Fri, 06/04/2010 - 00:19 | Link to Comment AUD
AUD's picture

"Gold isn't money anywhere in the world". Except the on LBMA dipshit.

Fri, 06/04/2010 - 00:28 | Link to Comment gerriek
gerriek's picture

Wrong. In Zimbabwe gold is frequently used to pay for basic needs. Gold is in big demand. About a month ago 14 gold traders were raided and killed in Iraq in one hit. Even the terrorist does not want to fund their operations in USD anymore.

Fri, 06/04/2010 - 06:03 | Link to Comment doggings
doggings's picture

Gold isn't money anywhere in the world.  Understand that?  It isn't used anywhere in the world as a medium of exchange.

FFS. really, what planet are you from? nope, not for the last 5000 years it hasnt been money anywhere? ..nor for the next 5000 eh?

seriously, LMFAO at just how clueless you sheeple really are. good luck with your green paper. I prefer the white soft stuff for wiping my arse personally, but each to their own.

Fri, 06/04/2010 - 07:30 | Link to Comment goldfreak
goldfreak's picture

Jory is just a troll who will dissapear when the price of gold goes up. THen he will have a new screen name and just spew the same stupidity he's doing now.

 

He's NAdler

Thu, 06/03/2010 - 23:39 | Link to Comment carbonmutant
carbonmutant's picture

The problem with trying to use gold as currency is that they always want to give you the change in paper...

Thu, 06/03/2010 - 23:49 | Link to Comment fasTTcar
fasTTcar's picture

That is what silver is for.

And quite possibly copper.

Fri, 06/04/2010 - 01:12 | Link to Comment nuinut
nuinut's picture

Fractional reserve in and of itself is not such a terrible thing. The problem is that it creates a moral hazard. This moral hazard is such that even regulation cannot fix it because ultimately the regulators become morally corrupted by the system.

 

The shift that is coming in the gold market, from paper to a physical market, is the ultimate conclusion to a fractional reserve system. It is the collapse of the system as confidence is ultimately lost that there is any reserve actually being held in your name.

If we only use fiat currency as a unit for trade, and not for store of value, but instead have a non-fractional wealth reserve riding shotgun, the system will once again become sustainable.

The currency will fluctuate per the actions of the printer, but if he prints too much, more value will flow into the wealth reserve. If the printer is responsible, people will gradually be willing to hold the fiat for longer and longer periods of time. Ultimately, if the printer remains responsible, some people may hold the fiat as a store of value. But then this will tempt the printer to print more and value will flow back into gold.

 

This is where evolution is taking us. It is not taking us back, it is taking us forward. We are evolving to a place where governments print the money we use for trade, but not for savings. They will have to earn our trust again before we will save in their currency.

FOFOA, from comments regarding "It's the Debt, Stupid"

Fri, 06/04/2010 - 01:39 | Link to Comment Double down
Double down's picture

Really nice, thank you

Fri, 06/04/2010 - 00:36 | Link to Comment dumpster
dumpster's picture

yep but the paper is backed by gold . and to use gold as currency would entail using a note but it is backed by gold... so change is given .. or you can redeem the paper for gold .

 

and what  is this always .. not in your life time  .. since your were born circa 1989 that makes you a zit head with no experience  

still must have a fever that has twisted your thinking

sometimes the level of smarts and junk minds is dreadful

how do you find your way to work .. you and jorymust be hooked at the hip .. and crawl to work ,, so as not to hurt the morning paper boy

Fri, 06/04/2010 - 06:12 | Link to Comment breezer1
breezer1's picture

gold got me across a border once. no change back though.

Thu, 06/03/2010 - 23:55 | Link to Comment Honest_Money
Honest_Money's picture

When they can print hundreds of billions of dollars or Euros or SDRs overnight, what are those currencies really worth?  It becomes more amazing to me everyday that I can even still buy gold and silver with my fiat paper.  Fiat is the bubble, not gold.  Gold is still only selling for about 12% of M2 money supply...what a bargain!

 

 

Thu, 06/03/2010 - 23:55 | Link to Comment HedgingInfinite...
HedgingInfiniteRiskIsNotPossible's picture

I'm going to bed.

Fri, 06/04/2010 - 00:18 | Link to Comment Bow Tie
Bow Tie's picture

didn't think the IMF actually had any gold anyway. further gold 'sales' would just be more member states reclaiming ownership of their pledged gold. remember if they ever wanted to sell some on the actual open market, eric sprott is down for a few hundred tons. he'd want delivery though. didn't think so.

Fri, 06/04/2010 - 00:18 | Link to Comment palmereldritch
palmereldritch's picture

Got Carbon?
http://www.imf.org/external/pubs/ft/fandd/2008/03/jones.htm

[snip]:
For cash-strapped governments, the potential revenue from carbon pricing would seem to provide at least one benefit from climate change. And, indeed, it would enable them to make less use of more distortionary taxes and deal more confidently with the potential revenue challenges arising from trade liberalization and globalization.

(That last line is my favorite....ummmm who was responsible for GATT and globalization after all?...and those cash strapped governments would be paying debt servicing to whom ultimately?...why the IMF!.....)

Damn you Copenfrauden!!!...where is our blood supply?!!!...Looks like it's going to have to be gold-based SDRs in the interim until the slick in the Gulf and the slick in D.C. can convince the planet otherwise.

Oilblama, do your magic!

Fri, 06/04/2010 - 00:20 | Link to Comment jory
jory's picture

$6.2 Trillion worth of Gold floating around in the world doing nothing.  $900 billion in US dollar currency in existence.  Pull out a FRN and drool you Idiot Goldbugs.  That FRN is more rare than Gold by a factor of 7.

LMFAO!!!!

 

Fri, 06/04/2010 - 00:49 | Link to Comment RockyRacoon
RockyRacoon's picture

Looks like somebody needs to ride to your rescue.  Where's Master Bates / Johnny Bravo when you need him (them).  The trolling crew must be off tonight.

Fri, 06/04/2010 - 01:01 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Looks like jory is out of his league.

Rocky, I got all tore up over at the Peace Flotilla War Zone du Jour thread.  They junked me the 20 x in a little over an hour, and I got disappeared.  Real fight club over there, practically could sleep through a gold thread now, LOL.

Fri, 06/04/2010 - 00:51 | Link to Comment Quinvarius
Quinvarius's picture

You actually think there is only 900 billion in US dollars in existence?  That leaves every citizen in America with about 500 dollars a piece after TARP.  Interesting theory you have there.

Fri, 06/04/2010 - 02:32 | Link to Comment GoinFawr
GoinFawr's picture

Hey Jory: gold doesn't 'float'. Which is only one of the many reasons why it has been such a reliable store of wealth for all of recorded history. While every (count 'em: not some, not one, but every) fiat currency has eventually failed. 

That bit of education aside, Jory, I just can't be bothered to refute the rest of your ridiculously simplistic and fallacious calculation; I have too much respect for myself and others posting on this site.

Fri, 06/04/2010 - 08:13 | Link to Comment Irwin Fletcher
Irwin Fletcher's picture

LMFAO? Laughing my fucktard ass off?

 

Hey Jory, chill out. Here's my suggestion, on the off chance you're over 21: buy a bottle of vodka, a bottle of kahlua, and some half and half. Mix together over ice, drink, and repeat 3 times. Watch The Big Lebowski, and you will see how to mix these together properly. When the Dude drinks, so should you. When he smokes, you should spark up one of the same, and roll another. If you enjoy the experience, please thank me by never posting on this site again. 

Fri, 06/04/2010 - 00:44 | Link to Comment boeing747
boeing747's picture

Ben will soon realize that he has no other option but let stock market go under to save "In God We Trust" against "In Gold They Hold".

Fri, 06/04/2010 - 00:44 | Link to Comment strannick
strannick's picture

Of the 3000 tons gold the IMF allegedly holds; I wonder how much of this same gold is simultaneously claimed by;

1. USTreasury

2. Comex  

3. Deutsche Bundesbank

4. SPDR Gold ETF

Fri, 06/04/2010 - 07:31 | Link to Comment ColonelCooper
ColonelCooper's picture

Bingo!!  Give that man a prize.

I sometimes wonder how much of the gold my neighbor thinks he has in his "Gold Backed IRA" is actually in my backyard.

Fri, 06/04/2010 - 00:45 | Link to Comment jd2iv987
jd2iv987's picture

if the price of gold increases doesnt that mean their short fall is less?

Fri, 06/04/2010 - 00:53 | Link to Comment Quinvarius
Quinvarius's picture

All of our paper woes lead back to the same solution.  Gold must be taken up.

Fri, 06/04/2010 - 00:56 | Link to Comment bob_dabolina
bob_dabolina's picture

Last I checked the U.S was bankrupt.

Not sure why the EUR is so bad...I'm pretty sure Germany is productive to the euro zone...who is producing for the dollar? North/South Dakota? That ain't gona cut it.

Fri, 06/04/2010 - 00:53 | Link to Comment boeing747
boeing747's picture

Some Gold may still bury underground

Fri, 06/04/2010 - 01:12 | Link to Comment SilverIsKing
SilverIsKing's picture

$118 billion?  Chinese chump change.  China can snap up all that gold with the loose € jingling around in their pockets.

Fri, 06/04/2010 - 06:55 | Link to Comment buzzsaw99
buzzsaw99's picture

Others as well. +1

Fri, 06/04/2010 - 01:26 | Link to Comment dumpster
dumpster's picture

silver gold

In 1964, this silver coin was worth 25 cents.  Back then you could use this coin to buy a gallon of gasoline.   Today, if you take this same coin to a gas station, you can buy about 1/10th of a gallon of gas. HOWEVER, if you stop by your local coin dealer, he will pay you roughly the silver-melt value of this coin, which is $3.24 with spot silver a $17.95.  You can then take the proceeds to the gas station and buy a little more than a gallon of gasoline. As you can see, the face value of a quarter has declined since 1964 by 90%.  But the silver-melt value of that same quarter has maintained its purchasing power over those 46 years.  With an ounce of gold, this example is even more dramatic.  Back in 1964, the price of an ounce of gold was fixed at $35.  Today, that same ounce of gold is worth $1210.   If you do the math, you will find that the value of the U.S. dollar in relation to gold has declined by nearly 98% since 1964.  Got gold?  Got silver? http://truthingold.blogspot.com/2010_06_01_archive.html
Fri, 06/04/2010 - 06:43 | Link to Comment Irwin Fletcher
Irwin Fletcher's picture

Got nickels? Lots and lots of nickels?

coinflation.com

Fri, 06/04/2010 - 02:16 | Link to Comment GoinFawr
GoinFawr's picture

Pah, I'd bet the IMF has as much gold in hand as your average sub 100,000 unit GLD holder.

Didn't Eric Sprott offer to buy the remaining 193 tonnes or so they have 'earmarked' for sale? But of course, they won't sell to the likes of 'him'.

My impression of how that sales call went:

E.Sprott: "Yah, we'd like to buy some gold. In fact, any that you have for sale, 193 tonnes or so I believe it was?"

IMF: "Uh, yeah... right. Er, ah, would you be requiring delivery on that order...?"

Sprott: "Natch!"

IMF:"oooo, that could be a problem...How's about this, instead: we have a couple of smaller GDP countries that we've been 'helping out' for awhile, could we offer you them in lieu of delivery perhaps? ... they might have some 'liens'  outstanding, but we could work that into the price, no?"

E.Sprott: "..."

IMF:"Or how about some tasty SDR's... or mb some extra USD?"

Sprott: "(click!)"

IMF:"Hello? Hello?"

 

Fri, 06/04/2010 - 02:20 | Link to Comment doomandbloom
doomandbloom's picture

Got Leo?

Fri, 06/04/2010 - 03:00 | Link to Comment Heavy
Heavy's picture

Yep, gold is going to maintain value during "deflation" and gain value during inflation, and even more so for hyperinflation.  Thus...(real as opposed to paper) gold holdings are good for value preservation and gains in the future on a long term view if long term is over the next five or so years.

May the mighty IMF with its new digitallish currency (no paper here, nothing to see, move along) inslave us all to our salvation, or something along those lines.

Fri, 06/04/2010 - 03:12 | Link to Comment Privatus
Privatus's picture

Yousef Boutros-Ghali? Of the same family of statist cockroaches as Boutros-Boutros Ghali? We are freaking doomed.

Fri, 06/04/2010 - 04:49 | Link to Comment PaperWillBurn
PaperWillBurn's picture

I bet if the IMF offered China all of their gold for $318 Billion they would jump on that deal. But I doubt the IMF really has that much PHYSICAL gold

Fri, 06/04/2010 - 06:26 | Link to Comment Riley Wilde
Riley Wilde's picture

Where will the IMF get that money?

My understanding of the way SDRs work is that the IMF does not actually need any money to increase the number of SDRs. Instead, if a super-majority of the members vote to double the quotas then they will all have twice as many SDRs.

An SDR then allows a country to swap it for hard currency either through a voluntary arrangement or through the IMF allocating members to provide the hard currency. Hence, the "cash" isn't needed until the point when a member asks to swap SDRs for currency. It is an easy act now, pay later action. Costless now and when a serious crisis breaks out it will be easy/essential to justify the printing of money at that point. In some ways, I think increasing SDR quotas is analogous to the Fed entering into swap agreements with other central banks. Whether these swap lines or SDRs get used in future and where that cash comes from is a later problem.

To get back to the original question, I don't think it is about “where” the "IMF" will get that money, but which countries will have to supply the hard currency to the weak countries and how will these relatively stronger countries supply the cash.

Is anyone here knowledgeable enough on IMF matters to comment?

Thanks,

R. W.

Fri, 06/04/2010 - 06:58 | Link to Comment MarketTruth
MarketTruth's picture

Bankster Credo:

When all else fails, double down.

Fri, 06/04/2010 - 07:04 | Link to Comment Jake Lamotta
Jake Lamotta's picture

Folks, never give up your gold as fiat currecy will be worthless in a few years perhaps even months!

Fri, 06/04/2010 - 07:18 | Link to Comment Trichy
Trichy's picture

What European bank is taking a huge derivtives loss,

Any one knows?

Fri, 06/04/2010 - 08:10 | Link to Comment jesusonline
jesusonline's picture

The rumor has it SocGen is in some kind of trouble with its derivative positions. Look it up on Reuters and FT Alphaville

Fri, 06/04/2010 - 07:32 | Link to Comment cowdiddly
cowdiddly's picture

Em, Its the russians who are buying up gold at the moment as fast as they can. Ivan knows all to well the effects of whats coming.

And for the idiots how think gold is not money. I just sold two of my smaller nuggets on ebay last week and they seemed to have plenty of buying interest. 16 bids later they paid me well above spot . But you guys hang on to those greenback. LOL

Fri, 06/04/2010 - 12:14 | Link to Comment hangemhigh
hangemhigh's picture

Cowdiddy:

this is just wild speculation on my part but i think there is something very stealthy going on in Europe. 

the first 'tell' is the german position on CDS/naked shorts.  they want to whack the wall street "plunderbund"  by dismantling their leveraged derivative, mark-to-make believe franchise.

they will, of course, need lots of help.  the russians can be a major player in this deep cover drama in the sense that a new medium of inter-market trade settlement will probably emerge that is backed by commodities, i.e. gold, oil and natural gas.

the OPEC homeys will almost certainly want to play ball as between them they, and the russians, can continue to control the market in crude

the chinese will, though deeply concerned about global instability, continue to pose as innocent bystanders with far more important, internal, fish to stir fry.

 

 

 

Fri, 06/04/2010 - 07:44 | Link to Comment rogerramjet
rogerramjet's picture

Gold well probably never be used as money in the US, but it is a good idea to have some gold coins  around since you can always go 2 a coin shop and exchange it for the funny money (oops) fiat money 2 pay some bills.

Fri, 06/04/2010 - 07:49 | Link to Comment fireangelmaverick
fireangelmaverick's picture

WTF?

EUR/CHF plunges 200 pips in 10 minutes. Tyler cover please!

I do not think my stomach can take such volatility any more. Going long Maalox as a hedge.

Fri, 06/04/2010 - 08:06 | Link to Comment Rip Toff
Rip Toff's picture

They are solvent when when gold hits USD3219 (from my rough calculation).

Fri, 06/04/2010 - 11:46 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

+1 for the statement, as the number does not even really matter, but your point is dead on.

I have the number at $10,000/oz...splitiing hairs

Fri, 06/04/2010 - 11:44 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

People, the system is defunct, and the people in charge are idiots.  We need to flush those sitting, and start a new system, stat.

Fri, 06/04/2010 - 13:43 | Link to Comment Heavy
Heavy's picture

Arrr matey, ye be timely with yer revolutionary sentiments, arr.  On to the plundering of the plunders. 

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cindycheng's picture

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Mon, 08/15/2011 - 06:31 | Link to Comment cindycheng
cindycheng's picture

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