Monday, Feb 25, 2008
The US Treasury, in a significant policy shift, has decided it will support gold sales from the International Monetary Fund's reserves if they are part of a package of cost-cutting and other reforms of the way the international financial organization oper
hemscott.: US Treasury to support IMF gold sales if linked to cost-cutting, reforms
Under Secretary for International Affairs David McCormick will lay out the details in a Washington speech later today. In a pre-address briefing for reporters, he said the Bush administration -- which had until now opposed selling IMF gold reserves -- would support a sale of the scale of roughly 8 pct of the IMF reserves or 12.9 mln ounces as part of a package of reforms which also included significant cost-cutting in IMF operations.The proceeds would be used to create an endowment from which the income would be used to finance the IMF operations.
Posted by chris @ 01:57 PM (1101 views) Add Comment
11 Comments
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1. harold said...
"The US Treasury, in a significant policy shift, has decided it will support gold sales from the International Monetary Fund's reserves if they are part of a package..."
...which attempts to stop gold going to $2000/oz, and the US$ collpasing before they are ready to introduce the Amero.
2. stillthinking said...
My god! I can only hang my head in shame (and poverty). IMF getting scared about a gold bubble which would collapse all the currencies. But I bet that very few people have actually bought real (as in tangible held in hands) gold, so they are capable of selling a fair amount of the stuff given that they aren't restricted at all by the physical quantity, as the old banks weren't restricted in lending on a gold standard. Also, they have been "leasing" gold for speculation and there are some doubts about the actual quantity available.
Brown urged the IMF to sell gold as well shortly after he offloaded the UK gold. They don't even have to really sell any, just credibly threaten to dump gold to scare people.
A real rising of stakes. Is the current price of gold too cheap?
In which case the IMF takes on the financial reserves of the world. Or maybe this is entirely political just because Ron Paul came second in Nevada(or whichever).
!!!! Exciting stuff. Financial meltdown !!!!!
I really want some now. Bah.
3. harold said...
Don't hold your breath about the IMF gold-sale:
http://www.kitco.com/ind/AuthenticMoney/feb192008.html
4. george monsoon said...
This means nothing to me.
I have meagre savings, a family to support and no prospect of investing thousands like some of you affluent southerners.
How will this affect my ability to buy a house. Not an awful bloody lot !!!
5. harold said...
For those dumbfounded by the appeal of gold, please read the following short and excellent article by James Turk:
http://www.kitco.com/ind/Turk/turk_feb252008.html
The graph is one of the most illuminating on the subject I've seen for some time (take note S2R1).
Now I know there may be those who gripe that this is not about HPC, but in may view these things are related - and there are quite a few readers who are wondering how to protect their nest-egg before re-joining the housing market. So this issue is of great relevance.
6. 51ck-6-51x said...
Tiberius Asset Management's Christoph Eibl says "This was anticipated at these levels. You still have so much buying potential from private investors. This will be taken off by the market"
Barrick's Wilkins says "The market can absorb IMF sales"
The spot price of gold decreased 1.6% between 14:25 and 15:00 GMT to be 1.12% down on the day:
* 0.4% prior to the news hitting Bloomberg at 14:45
* 1.2% between 14:45 and 15:00
It hit it's low of 933.45 just after 16:00 (down 1.24% on the day) and has since rallied to 937.41$/oz as of 16:53 (down 0.83% on the day - down 0.98% since the news hit Bloomberg @ 14:45)
It looks like these market professional's comments may well prove correct (even if they do have an interest in keeping prices up until they have sold off their positions ;p)
7. rocket robbie said...
Well said Harold
I
8. harold said...
george
I'm sorry about that, but you don't need thousands to invest in silver - you can still buy sufficient for a rainy day for a few hundred quid.
9. 51ck-6-51x said...
George -
The reason it affects the property market is twofold: (i) If 12.9 million ounces of gold is "about to be sold" then rich institutions, governments and so on will be less likely to buy gold now, one of the places cash is going to from the sales of other asset classes, thus other asset classes prices are supported temporarily; and (ii) Gold is the world's currency - it is held by Governments [or the IMF as deposits from governments] and institutions, especially central banks and therefore when a large amount is sold it is like a local fiscal easing but on a global scale, thus supporting other asset classes in the medium term.
What you said is akin to saying "So what, they are chopping down the rain forests - this means nothing to me, I eat fish and chips." :)
10. robh said...
"would be used to create an endowment from which the income would be used to finance the IMF operations"
Sorry, endowment? Invested in what???
Not a fly "Northern Rock Super Web Saver Offshore" account?
11. Wealthy Vagrant said...
I find it ironic that if you went to a bank and asked to borrow £200k to "invest" in a crappy little town centre flat built on the cheap they'd consider that "safe as houses" and happily give you the money, but if you wanted that same amount to "invest" in gold/silver etc they'd say it was speculative and run a mile.
Time will tell what will be safest store of wealth.