IMF Selling One Eighth Of Its Gold Reserves, Will "Safeguard Against Disruption Of The Gold Market"
In what can only be called a rather surprising development, the IMF has disclosed it is selling 403 metric tons of gold, or about one eighth of its total gold holdings. The reason: to continue providing lending to the poorest countries. Just so readers visualize who these "poorest countries" are, and who this current manipulation in the gold market will presumably benefit, here is a map of the IMF's most recent activities:
“I am delighted that the Executive Board has given its overwhelming
backing to a strictly limited sale of Fund gold to put the financing of
the IMF on a sound long-term footing, and enable us to step up
much-needed concessional lending to the poorest countries,” Managing
Director Mr. Dominique Strauss-Kahn stated. “These sales will be
conducted in a responsible and transparent manner that avoids
disruption of the gold market. Most importantly, the sales are strictly
limited to 403.3 metric tons, which is one-eighth of the Fund’s total
holdings, so the IMF will continue to hold a relatively large amount of
its assets in gold.”
The new income model
is designed to provide the Fund with more diverse income sources that
are better aligned with the variety of functions performed by the Fund,
with a central component being the funding of an endowment with the
profits from these limited gold sales. Resources linked to the gold
sales will also be used indirectly to increase the Fund’s capacity to
provide concessional loans to low-income countries (see Press Release No. 09/268).
The gold sales could be conducted on-market in a phased manner over
time, following the approach adopted successfully by the central banks
participating in the Central Bank Gold Agreement.
Participants in the recently renewed agreement announced ceilings on
sales of 400 tons annually, and 2,000 tons in total during the five
years starting on 27 September 2009, and noted that the Fund’s sales
can be accommodated under these ceilings. Hence, on-market gold sales
by the Fund will not add to the announced volume of official sales.
As one of the elements of transparency, the Fund will inform markets
before any on-market sales commence. In addition, the Fund will report
regularly to the public on the progress with the gold sales.
Conclusion: even more forced capital reallocation disguised as a "transparency" boosting initiative. Next up: rioting in Goldbugland.