Tiny Mauritius Tells US To Shove Its Dollar, Buys 2 Metric Tons Of Gold From IMF At $1,115 An Ounce

Tyler Durden's picture

The latest development in the gold bubble saga, and one which will likely cause the precious metal's price to spike even higher, comes from the tiny island of Mauritius which according to Dow Jones has purchased 2 metric tons of Gold from the IMF for $71.7 million. The price works out to approximately $1,115 per ounce. More as we get it. (and yes, this is a picture of Mauritius not some CNBC anchor hangout).

Some more from Dow Jones:

The International Monetary Fund announced Monday it has sold two tons of gold to the central bank of the Indian Ocean island of Mauritius for nearly $72 million.

The sale came as gold prices surged Monday to an all-time high of $1,136.72 per ounce.

The sale to Mauritius "was conducted on the basis of market prices prevailing on November 11, 2009 with proceeds equivalent to U.S. 71.7 million dollars," the IMF said in a statement.

It was the second such sale by the fund since September, when its executive board authorized the sale of 403.3 tons of gold from its holdings to bolster  its finances amid the global economic crisis.

On Nov. 2 it sold 200 tons of gold to the central bank of India for $6.7 billion.

The IMF said it would sell gold directly to central banks and other official holders for an initial period before selling the remaining amount on the open markets "in a phased manner over time."

The Washington-based IMF, which currently holds just over 3,000 tons of gold, is the third-largest official holder of the precious metal after the U.S. and Germany

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D.O.D.'s picture

ok, I'm through with merideth... [edit] Please let me be Fed Chairman of that Asset Bubble, I've got a stimulus package I'd like to inject into the market...

Cognitive Dissonance's picture

This is getting interesting.

BTW, the link above brings you to the CIA "World Factbook" web page for Mauritius. On a lark, I looked to see if the CIA has a listing on the Banana Republic of the United States of America. Bingo, sure does, though under the old name of United States. I thought the CIA wasn't a domestic operation?


Anonymous's picture

ha! who do you think murdered john kennedy,
robert kennedy, martin luther king, john lennon,
attempted ronald reagan? to say nothing of who
demolished the wtc in a controlled demolition
using nanothermite....


Anonymous's picture

Nanothermite? What's that?

Problem Is's picture

Wait.. Big chested gals in bikinis selling me (gold) investments...

Am I watching CNBC or reading ZH?

Oh I guess since I am receiving accurate information and the big chested gals in bikinis just happen to accompany the article....

Instead of the big chested gals in bikinis distracting me to sell me some worthless investment...

It must be ZH.

Anonymous's picture

better do a assay on those bars.....

HedgeAccordingly's picture

Pretty nuts.. if they are wrong and are buying at the top of the market. bye bye little island.. some traders will probably buy you... You know kinda like renting a super tanker 2 store physical oil.. ya know creating an artificial shortage.. running up the price of the spot... i think you talked about this last week tyler. ha 

Missing_Link's picture

What's the chance that they could be wrong?  I do not see a viable scenario for gold coming down.  It seems to me to have very solid support.  That which cannot go down must go up.

Howard_Beale's picture

Well let me count the ways you could be wrong since you are in a herd trade and I am long gold but at much lower levels:

1) You were a Southern Cal property buyer in 2005 and put no money down but hey, there is no way to go but up.

2) You loved the Nasdaq at 4000 and even more at 5000 in Mar 2000--because there was no way to go but up.

3) Oil looked like a screaming buy at $148 because there was no way to go but up.

I'll give you a viable scenario:

The stock market starts to tank since the Fed truly does not control it and the bear market rally ends. The dollar hits bottom and the greatest short squeeze of all time starts to take hold in a global de-risk trade. This continues for about a year--say 16 months like the first leg down in the stock market. Deflation truly takes hold even with the printing presses rolling. Gold retraces several hundred dollars as the Chinese, Indians, and every other country buying IMF gold feels a sense of ease that their dollar denominated debt is safe after all. That puts us to sometime in 2011---gold has retraced and languished.

Long term yes--there is support (unlike the tits that Robo posted on the close-up). But anything can happen in the next year and anyone piling in now is playing with the same bunch of sheep that are long the stock market and shorting the dollar. THREE very crowded trades. Can't wait for the squeeze to begin.

Gordon_Gekko's picture

You know the number of similarities between the three trades you mentioned and gold? ZERO. Also, there's no guarantee that a rising dollar (dxy) will guarantee a falling gold. Just because one toilet paper is rising against some others doesn't mean gold will go down. Ironically, the real bubble right now is in bears.

Anonymous's picture

Sorry Gordo, a chart is a chart is a chart. I've never seen something go up that can't come down. Never. Nothing.

FullMetalJacket's picture

Ever charted gold in ZWD (or any other defunct currency)?

Slewburger's picture

Yea like the Weimer Republic?


Check the parabolic behavior of paper/gld.

Slewburger's picture

Also check the volume of notes being moved.

Howard_Beale's picture

Cute GG....I have some bubble bath for my daughter in a bear bottle. I always appreciate your input and as I said, I am sitting on lots of coin. I think we can agree to disagree that the moonshot is a matter of timing in which I think is further out than you do. Best of all, we'll both be fine.

BTW, I am glad you answered my post. I am also long a great deal of silver and it is performing poorly until today. What is your position on that metal?

Gordon_Gekko's picture

Both Gold and Silver are in a bull market, IMHO, and will outperform other commodities even as they rise generally. I do own some silver too - in fact, just bout some this weekend so that may have tipped the price :-) 

Anonymous's picture

1.25T of MBS, with no end in sight, wtf don't you understand?

trav777's picture

yeah, dollar denominated debt is safe when the US is running annual $1T deficits.  This is absurd nonsense.

secondly, the DXY is a beauty contest between currencies, not as compared to real assets.  DXY can go to 200 and gold still hit 3000.

Look, think the scenario through...what does deflation due to debtors?  It crushes them.  Who is the largest debtor?  The US, Japan, and the UK.  This is the same duhnoshit argument that got me banned from tickerforum years ago.  If the US defaults, the dollar goes to zero.

There is no scenario in which the paper of a bankrupt state is "safe."  In fact, it gets less safe in case of deflation.  The US has no choice but to devalue, same as we did in 1933!  We *cannot* repay our debts, it's as simple as that.

Anyone who thinks the US is not a risk needs to have their head examined.

Howard_Beale's picture

I am long gold so I don't need to have my head examined. And I have coin--bars--none of that ETF stuff. But I can tell you one thing:none of us knows what will happen and when. So chill out.

Oso's picture

Howie + 100.  absolutely spot on.  anyone who tells anyone else that something can only go in one direction is a pig.  and pigs get slaughtered.

i got out of gold at 980 simply because i had too much company.

de-risking WILL cause gold to contract, probably violently.  question is not if, but when.  dont have the  answer there.

chumbawamba's picture

You got out at 980 because you didn't think it was hip to be in gold anymore?  Are there holes in the walls of your apartment when you repeatedly bang your head?

I am Chumbawamba.

Anonymous's picture

Um... have you tried to talk to anyone about gold? Other than hard core individuals who were already aware of it there aren't any new people coming in (other than central banks). People still couldnt care less about it and some even really hate it. I have never seen an asset class this unloved after a multiyear bull run (from mid 200's) with so money still unconvinced. When everyone comes up to you and tells you what mining stock to buy or how much higher its going - then its time to go. And Im talking about the guy in line at starbucks or in the elevator telling you how they are killing the gold market - and you can tell by their conversation they really have no idea about gold or finance/econ - they are just herding along. That's the top and the time to go. We aint even close yet...

pellucide's picture

I agree. Something like the "Heisenberg uncertainty principle". The more people try to predict the outcome, the less predictable the outcome becomes.

So when its common knowledge that the gold is going to go up, Its less lilely to go up.

faustian bargain's picture

which turns it into a black swan event when it inevitably goes up.

Anonymous's picture

The intangible is confidence. Confidence in the US and the dollar. Confidence that we are not stepping on a mine

It transcends all the math and modeling. In the world of fiats, it is everything.

It seem at some point the forces of the Fed's jobs/prices dual mandate will work against it, painting them into a corner by tunnel vision in an infinitely complex, yet finite world.

Always mind your surroundings.

A Man without Qualities's picture



Though there may be a short term Dollar rally, the debt would drag it down.

Anonymous's picture

the USD is backed by $1T of Fannie/Freddie MBS and climbing, enough said.

deadhead's picture

good to see  you back howard....

the dollar squeeze: there are so very many geopolitical events that could ignite this in a moment let alone financial matters that all here are aware of.  crowded trades are crowded trades and the beauty of them is that history shows that they all unravel, usually at an accelerated pace.

i've got no comment about gold pricing action except to say that it has been the best store of value for, say, several thousand years!

ghostfaceinvestah's picture

Nice long spiel, not one mention of the 1.25T of MBS that Bernanke is buying, not to mention the market sentiment that he will not be able to stop buying at 1.25T.

Any analysis of the USD without looking at what is backing the USD is incomplete.  Increasingly that backing is Fannie and Freddie MBS.

Anonymous's picture

Haven't you noticed a slight difference between the housing bubble and the dot-com bubble versus the gold bull market?
I'll give you a hint: the public hasn't started buying gold, while everyone was jumping on board the real estate and dot-com bubbles.

And just because you know a few contrarian investors that are buying gold doesn't mean anything. They don't represent the general public - which is selling gold, not buying it, if the cash4gold commercials are any indication.

I'll point out another difference as well: bubbles always have increasing supply to meet the demand. More dot-com stocks to buy, more useless McMansions being built.
Meanwhile gold production is falling.

Does this mean that the POG won't correct. Not at all. It will correct some time in the near future. But it is nothing like the bubbles that you point out.

Anonymous's picture

This is what is called 'the market'.

One feels, thinks, uses a ouija board to say that it's going up and the other uses a set of chicken entrails to say it's going down.

Looks like there's a current surplus of those who have been right (for several years) that gold is going to go up.

I wish I had stuck with my purchase at $900 and $700.
I wonder how many of us bought it at the lower number and still held possession of it thru the ups and downs over the last several years. Not many I would suspect. Many more entered the market at 700 and sold at 900. And so it has gone to the level it is today.

There's no scientific way to test it but an anecdotal story would be interesting on this board: those who have held it and those who traded it away at a few points higher than they paid.

Anonymous's picture

I started buying at 600, bot more at 560, and kept buying up to the high 900s. Bot more in the collapse last fall as did a relative. Sold some recently to raise cash but still hold most. Silver too. Have not sold a single ounce of that stuff.

Physical PMs are real savings as opposed to paper money. So count me as one who held possession of it thru the ups and downs over the last several years.

hack3434's picture

If they are wrong then they can ask the US for a bail to avoid another "systemic collapse" 

TomB's picture

It's only $71.7 million. That's chump change compared to the country's net foreign currency reserves of $2.9 billion.

Anonymous's picture

this is a good point, perspective is always important, and with mutlibillion dollar frauds, and trillion dollar deficits, $70M hardly even seems to register anymore. But that figure is still 700 $100,000 dollars.

Anonymous's picture

Maybe they're hedged LOL.

Lionhead's picture

Hedge Accordingly, your screen name is apt. You're likely hedging as you are a weak long or weak short. Run for the hills at the first sign of a pullback or advance. May I suggest you study the fundamentals & technicals behind the long gold/silver trade and why various investors & countries are buying the PM's. Gordon Gecko has been showing readers the astuteness of this investment. Will there be pullbacks & shakeouts? Yes, specifically to shake weak hands like you out of your positions. Especially in a market where demand is increasing and supply is diminishing. There is a finite supply of gold/silver; there is an infinite supply of paper & digital FRN's. Now, which asset would you want to hold in a banana republic sir?

Anonymous's picture

Ignorant statement. Obviously, these are central bank reserves. They are not "day traded" or used in daily operations (unlike the US gov). This is USD gathering dust in a drawer, depreciating. Tiny Island has realized they would rather have bars of gold in the drawer. Get a clue.

RobotTrader's picture

Here's a closeup....


Cognitive Dissonance's picture

Robo, I thought you promised mom you wouldn't take any more pictures of sis without her agreement?

Family resemblance anyone? No, not the face. If you're even looking at the face. Something else.

D.O.D.'s picture

That is a very nice beach...

geopol's picture

That is a very nice beach...


Thats what jumped out at me ...Especially the beach break..

D.O.D.'s picture

You can almost feel that sand in your toes cantcha?

molecool's picture

Actually, they don't look like silicone - those are good old fashioned big ass titties :-)