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IMF Gold Sales May Be Reality This Time

May 25, 2009 by  

IMF Gold Sales May Be Reality This Time

This week we begin a new feature on Personal Liberty Digest which will appear the second and fourth Tuesday of each month. It is a column by Brien Lundin, president of Jefferson Financial and editor of Gold Newsletter. Brien has been editing Gold Newsletter since 1993, and during that time has provided readers with timely and profitable analysis of the precious metals and mining share markets and the economic and geopolitical issues that impact them.

We urge you to read Brien’s columns and consider his advice as you adapt your wealth and asset protection strategies to today’s tumultuous environment. We are excited to bring you Brien’s twice-monthly contribution to Personal Liberty Digest.


Bob Livingston, Editor
The Bob Livingston Letter
Personal Liberty Alerts

The Federal Reserve’s decision in late March to dive into quantitative easing was a watershed event in the gold market. It meant that a tidal wave of newly created money was headed our way.

Gold soared on the news. But this shouldn’t make gold investors complacent. In fact, we knew the market was sure to test our convictions, and harshly.

The first of those tests came and was administered by our official sector headmasters. In retrospect, we should have expected it. As experienced gold investors know, whenever the authorities feel the yellow metal is getting “out of hand,” the same tired old canard of central bank/International Monetary Fund (IMF) gold sales is dusted off.

And so it was on the close of the G20 summit in London, just before the heads of state gathered for a round of back-slapping, glad-handing and ear-to-ear grins in front of flashing cameras.

The summit was a surreal blend of glitz, glamour, bluff and bluster—the kind of two-dimensional publicity event that usually has no significant effect or long-term relevance. But this time there may be some very real and dramatic consequences.

Of course, the trillions of dollars of fiat currency pledged to the IMF and sundry international banks and bureaucracies will end up in the pockets of corrupt government officials in developing nations across the globe. It will also line the pockets of the minions staffing the institutions doling out the cash. The result will be more economic harm than good, and more fiat currency sloshing around the world.

Granted, the trumpeted claims of progress toward a new, socialist world order arising out of the summit were a bit disturbing, given our president’s tacit support of such devolution. But these things take more time to develop than the typical leader remains in power, and there doesn’t appear to be anyone—President Barack Obama included—with the necessary charisma to lead the entire world into socialistic decline.

So the most important development to come out of the summit was something most regarded as a minor side note: unanimous support for the sale of 403 tonnes of IMF gold.

The stated goal of the sales was to “use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries.”

Apparently the original purpose of the funds when these sales were first raised months ago (to create an endowment to fund IMF salaries and keep these bureaucrats in high cotton) wasn’t polling well. You can rest assured, though, that the purpose will remain the same, regardless of the new packaging.

But, given the timing, the announcement was apparently intended to stymie a gold rally. And considering the unprecedented global monetary reflation now being perpetrated, it might seem especially important to push these sales through.

Of course, every time IMF gold sales have been proposed before, the announcements have had successively less effect on the market. It got to where you could almost hear the yawns from trading desks around the world.

The difference this time is that, with the Obama administration and the Democratic majority joining forces to expand government at the expense of individual rights, it seems very likely that IMF gold sales will receive the necessary approval by today’s left-leaning Congress. In fact, none other than the brilliant and entirely misguided Democratic Congressman Barney Frank has come out in support of the IMF gold sales, if about a third of the proceeds are dedicated toward “loans” that will further indenture poor countries.

As a side note, don’t be misled by those putting forth the bearish argument that, if the IMF is selling 403 tonnes (12.5 percent) of its 3,217-tonne gold hoard, what’s to prevent it from selling the remaining 2,814 tonnes?

The IMF’s founding Article of Agreement will prevent it. The remaining gold held by the IMF is actually owned by its member nations, according to their initial funding ratios and subsequent payments. IMF rules state that this gold cannot be sold to the market—it can only be sold back to the member countries that own it and the price of such a sale would be at the previously prevailing official price of 35 Special Drawing Rights (SDRs) per ounce.

An “SDR” is currently held to be worth $1.49783, so the IMF would be forced to sell its remaining gold to the respective countries at a price of $52.42 per ounce. It’s not likely that this bureaucracy will look to such an undertaking—which would concurrently destroy the value of its balance sheet—as a profitable venture.

While it remains to be seen whether the U.S. Congress will approve the 403-tonne IMF sale, much damage has already been done as gold investors were punished by the monetary overlords for being impudent enough to fight the oncoming inflationary tide.

In effect, resisting today’s political winds puts the average, freedom-loving investor in a worse position than if he were the victim of a mob protection racket. At least with the mob there is some honor among criminals…and there is the hope of justice through the legal system.

But when the U.S. government—and some “new world order”—are the ones robbing you blind, where do you turn for help?

Before giving up all hope, we need to remember that every previous attempt to rein in gold has only served to send the metal to greater heights.

Patience and persistence is the key, as the broad sweep of global events continues to turn in favor of gold.

Brien Lundin

is the editor and publisher of Gold Newsletter, a publication that has ranked among the world's leading precious metals and resource stock advisories since 1971. To learn more about Gold Newsletter, visit Mr. Lundin is also the host of the famed New Orleans Investment Conference, the world's oldest and most respected gold investment event. To learn more, visit

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  • steve feistner

    Federal Reserve , IS EXACTLY THAT , it helps to protect our FINANCIAL ECONOMIC FUTURE , How IGNORANT ARE THESE LUNATICS IN THE BELTWAY .. WE already know obama the closet muslim , is a fraud put into office to BANKRUPT AMERICA , YOU Idiots WANT to start a REVOLUTION in America , KEEP ON THE SAME MORONIC BEHAVIOR , YOU ARE ON , And WE WILL KEEP LOADING THE MAGAZINES , YOU MORONS , WILL NEVER GET THE GUNS ,
    An , Individual , WITHOUT A GUN IS A , “SUBJECT”
    AN, INDIVIDUAL , WITH A GUN , IS A “CITIZEN”.. to bad the closet muslim , cant produce a VALID/CERTIFIED , Birth Certificate ,
    are you idiots so inept , so as to think that “WE” arent WATCHING , and I will TELL you this , I SAID THE VERY SAMETHING TO BUSH .. beltway socio-pathe neurotics ..

    • Dolores

      Couldn’t have said it better, Steve. Right on!!!!

    • Julie

      Right on, Steve. Everyone I know feels the same way, too. Be prepared, America, for the morons / eugenics lab that they are bringing to America. Watch End Game by Alex Jones. Just google it and you’ll find it.

    • Rob

      Ahh, geez, I don’t like what Obama is doing either, but he is not a closet muslim. Common, that was election time bulls**t. Obama is a product of Acorn. Not the Muslim World.
      I do in fact think our leaders are trying to bankrupt us. Clinton left us with a balanced budget. Bush blew that all to hell. Obama is pushing the last of the economy over the cliff. According to the Globe, if you can believe that rag, Bill Clinton is on Obama’s hit list right up there with Rush Limbag.
      So out or the three, Clinton, Bush and Obama, it appears to be Clinton who actually had any financial sense.

      But hey Steve, as long as you said that to Bush too…

      And yes, I am quite armed…..

      • Gumnaam

        I think it is too early to render a final judgment on the economic performance of Obama.

    • Gumnaam

      My friend, I am sorry to inform you that you belong in the insane asylum.

    • Gumnaam

      Steve…there is a well-paying job waiting for you on Fox News. You will fit right in with the fear and hate mongers.

  • Bill

    Your survey or the first question is stated wrong one of the answer should have said the entire politician since President Clinton to today that has severed either as President, Vice President, Senator or Congressman. They are paid to be the watch dogs for the American People. They create laws to protect the consumers, but those who were elected to protect of its citizens whether it’s from terrorism or from economic terrorisms failed in doing their job. They allowed their own greed and party politics to screw over the American citizens. Those they have sworn to protect the interest of its citizens. While this administration along with the house and senate is set to bankrupt the American Economy, and provide for more unemployment. If you ask them it isn’t their fault it was the other administration fault. If those of you who have served for more than two years it are your fault that this economy is in the mess that it is now. Those of you who were just elected your just as guilty because you allowed them to spend money they didn’t have to spend. Chris Dodd and Barney Franks you need to be investigated concerning the housing market. It seems that those who were elected failed to ensure that the people whom they were sworn to protect were busy protecting their own political corers, or being corrupted b y wealth, and power. What is for sure they were watching out for its citizens.

  • Beepster

    Federal Reserve. What a misnomer. It’s no more federal than Federal Express. YET, they control the money AND the economy. They are not audited, and even Congress has no control of them. And, with people investing in gold, what better way to try to bankrupt them than selling a few tons at a cheaper price. We are losing our sovereignty day by day to some “World Order” where the money lords control even the air we breathe. Look for a tax on that!!!

    • Rob

      Right you are Beepster….
      Lot of us on the same wavelength here…..

    • Gumnaam

      Every country needs an independent central bank, free from political influence from the elected politicians.

  • Lee

    Steve, couldn’t say it any better. keeep up the good reviews

  • Rob

    Well if nobody else is gonna say it, I will.
    IMF gold sales, mean gold sales to China. Gold sales to China means that China is boning up on gold, and NOT US Treasuries.

    IMF gold sales is China’s answer to not wanting to buy US debt anymore. And frankly, as much as I disdain China, I don’t blame them. Avoiding US debt at this point is a no brainier. They don’t want it, because its a no pay long term. They know that.

    Its the reason the US has been monitising its own debt this year….. Thats bad folks…real bad. Wait for the inflation when this all catches up with us. Then wait for the dollar collapse. No cloudy thinking here. Its just how it works.


  • Rene

    Steve, We’re with you!! Thank you for expressing yourself with honesty and true passion. Love it! Take care:)

  • L. B. Trulove

    Please google and read, the CREATURE FROM JEKYL ISLAND, that exposes the truth about the Federal Reserve Bank. It is basically a private banking cartel owned by banks and also foreign interests who are so powerful, that no one knows who they are.

    The Fed was set up to steal the wealth of America, and put into place by the Federal Reserve Act, which was voted in to law by Congress around 1913. The Income Tax was the put into place to pay for all the loans that they make to us and the interest on those loans. The Income tax came into being around 1916..

    The really crazy thing about the Federal Reserve, is that the money they loan us is nothing more than a paper transaction. They do not actually loan us money, it is just a paper transaction that says they loanded us the money, and then we are indebted to them for it plus interest.

    the Fed Reserve should be Audited and then ended.

    According to our Constitution in Article 1, Our Treasurey Department should be in control of our money and issue our money, not some middle man such as the Fed. Reserve, who makes the money up out of thin air, loans it to us, and then we have to pay it back plus interest..They have a pretty good ponzi scheme or racket going on I would say……

    People need to be educated on this and understand how the Federal Reserve Operates and demand that our Governmen end it ASAP.

    • BNB

      Why aren’t we hearing from all the legal types out there who know that the Administration is breaking Constitutional Law and file class action suits …or something similar …against our representatives who have BREACHED our trust and misrepresent us!

      Why don’t we hear IMPEACH OBAMA! You wouldn’t see the ACLU standing for this “breach of civil rights”. Why do we, the people, who believe in the United States and the Republic for which it stands, put up with all this nonsense! Is the legal system in America so corrupt that it is hopeless?

  • unique

    Just wait until the government starts to confiscating gold and guns.

  • inlet 63

    my comment has to do with the survey asking question as who is responsible for the current economic problems. i don’t think you went into this deep enough to get to the truth of the matter. i think the problem begain with the creation of ira’s and 401k’s these types of retirement funds drive up the stock market where its over valued. allowing all of this corruption to take place, unstead of creating new companies. i think we all know who’s party was responible for it.

  • Thundermoon

    The federal reserve is a buissness that makes a product and sales for a profit,actually the biggest in the world,but who buys the product and why?

  • Eric g

    Ever since Adoph Hitler took Germany from bankruptcy to perhaps the strongest single country in the world during the second WWar . We know that all thats needed is faith in your government . Adolph created faith in his goernment.
    The German people went to work , I have visited with several old nazis , they all believed , and still say Germany had some good programs .

  • Damon

    Brien L., you stated,”While it remains to be seen whether the U.S. Congress will approve the 403-tonne IMF sale,…………………”, how is it that Congress has anything to do with this transaction? I didn’t know the IMF was controlled by Congress.

  • Tom O’Donnell

    The problem is that all the world’s currencies are fiat. The dollar, as bad as it is, deflects an honest evaluation of the euro and the yen. Does anyone believe that the euro or the yen want to step up to the plate? Reval of yuan is inevitable.

  • Jan Stachura

    It is dispicable what WE THE PEOPLE are allowing to happen to this once great republic. Is there any doubt—anymore—that BHO is a Saul Alynski radical socialist? He is extremely dangerous for the well-being of the U.S.A.; present and future. The worse things get the more easily Obama and his clique will be able to implement their agenda to “fundamentally” change America. As the elderly people die off the younger generations will grow accustomed to the new socialist order. More and more we as a nation will be dependent on government; re: Healthcare, Education, Energy, Transportaion and Food. We are fast slipping into the dark abyss of socialism. Exactly what Obama wants to accomplish. (This is exactly what he meant by “fundamental” change). Indeed the future is grim. What can one do? Buy some gold. If you can’t afford that then buy some silver. But of even more importance—buy guns and ammo. If you already have a reliable gun purchase another one for backup and then buy plenty of ammo. An empty gun is useless. Scary? You bet. Be prepared!


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