Sunday, March 2, 2008
IMF Gold Sales
"The U.S. supports a plan for the International Monetary Fund [IMF] to sell part of its gold reserves to shore up the multilateral institution's finances, the Treasury's undersecretary for international affairs said. David McCormick [DM] told reporters the Bush administration sees the proposed sale of 12.9 million ounces of gold as 'probably the most viable' option to ensure the long-term funding of the IMF. Proceeds would be used for an interest-bearing endowment", WSJ, 26 February 2008.
Big deal. 12.9 million ounces of gold at $959 per ounce, as I write, is $12.4 billion. Who is DM anyway? He once worked for McKinsey and has a Princeton PhD. So? The Chinese can buy $12.4 billion in gold in an afternoon. Having a little gray hair, I remember IMF gold sales in the 1970s, when gold was about $106. The IMF has not proven to be a good speculator in the gold market. Got gold? Get more. See my 2 October 2007 post about IMF gold sales from 1976 to 1980.