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IMF to sell gold reserves to help poorer nations
The IMF said in a statement the sales would be "in a volume strictly limited to 403.3 metric tonnes, with these sales to be conducted under modalities that safeguard against disruption of the gold market."
The Washington-based institution said the decision was a core element of a new income model to make it less dependent on its lending revenue.
The sale amounts to one-eighth of the current holdings of the IMF, which is the third-largest holder of gold after the United States and Germany.
U.S. Congress Vote Marks Big Step For IMF Reform, Funding
June 18, 2009
Selling a limited portion of IMF gold
Congress authorized the U.S. Treasury to instruct the U.S. Executive Director to vote to approve the sale of up to 12.96 million ounces of the Fund’s gold, which is the gold the Fund has acquired since the second Amendment of the Fund’s Articles of Agreement in April 1978. These sales would be used to create an endowment, as part of the implementation of a new income model that was endorsed by the IMF’s Executive Board last year, together with expenditure reductions, to put the Fund’s finances on a sustainable basis in the medium term.
Congress stipulates that such sales need to be handled according to guidelines agreed by the Executive Board in April 2008 to avoid disrupting the world gold market.
IMF takes up gold sales to expand lending
WASHINGTON — The International Monetary Fund's executive board on Friday was discussing selling some of the fund's gold to provide low-interest loans to poor countries and shore up its internal finances.
The move, authorized by the G-20 countries at their summit in London in April, has been long expected and discounted by commodity markets, where the price of gold has been rising amid fears of a weakening dollar and a resurgence of inflation.
The key question for the markets is whether the IMF will sell its gold in auction over a set period of time to get the best price or let central banks from member governments buy it. China, India and Russia, eager to reduce their position in dollar-denominated securities, have expressed interest in buying IMF gold.
Originally posted by Rockpuck
And what is the outcome you see happening? ... I see the fed failing to stimulate the economy from its current levels, not being able to shake off deflation... try as they might, they cannot stimulate the consumer..
Originally posted by johnny2127
Yes the inflation is intentional. The Fed is trying to inflate our way out of our debt problems with the rest of the world. We may still owe the same amount of dollars, but those dollars aren't worth as much any longer. So the US debt is easier to pay pay. The issue, of course, is that those lending money to us aren't dumb and they know what we are trying to do. So for this to happen, those that lend the US money have to willing lose purchasing power (value) on the money they put in US bonds. I doubt they will continue to do that....