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Five Questions About Gold The IMF Refuses To Answer

Recs

36

April 29, 2010 – Comments (11)

I was reporting on this several weeks ago: IMF Is Now Rejecting Prospective Buyers For Its Gold Stash - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=360779. Seems like the IMF is still singing the same tune.

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Five Questions About Gold The IMF Refuses To Answer
Vince Veneziani | Apr. 27, 2010, 4:05 PM
http://www.businessinsider.com/we-asked-the-imf-questions-from-eric-sprott-and-gata-and-got-no-response-2010-4


You'll recall that a few weeks ago, we interviewed the IMF on why it had blocked investor Eric Sprott's attempt to buy gold from the fund. We then spoke with Eric Sprott and the Gold Anti-Trust Action Committee, better known as GATA for their take on the matter.

Along the way, both GATA and Sprott suggested we ask the IMF some questions that the fund has avoided answering in the past. So we did. They were:

    * What are the incentives for the IMF not to sell gold on the open market or to investors, be it institutional or retail ?
    * What are the designated depositories for gold?
    * Did gold physically change hands with the banks you have sold to so far or was the transaction basically bookkeeping stuff (the IMF still holds the physical gold in this case)?
    * Are there available records on the actual serial numbers of bullion? How is the gold at the IMF tracked and accounted for?
    * When the IMF says it will "phase out" the sal of available gold, could you be more specific? What amount of gold in regard to what amount of time.
    * Does IMF support a need for total transparency in the sale of gold despite the effects it could have on various markets?

The official response from Alistair Thomson, the IMF's media guy, was:

"I looked through your message; we don’t have anything more for you on this."

Interesting, considering the IMF refused to answer similar questions posed by GATA and Sprott. Some are perfectly reasonable questions too, like did gold physically change hands? What does the term "phase out" actually mean?

Certainly this unwillingness is only fodder for skeptical gold folks out there.

11 Comments – Post Your Own

#1) On April 29, 2010 at 7:11 PM, ChrisGraley (29.64) wrote:

You won't get a lot of recs for this post binve, but a few of us understand it.

 

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#2) On April 29, 2010 at 8:10 PM, binve (< 20) wrote:

Hey Chris, I agree. This is a very important issue and I will keep writing about it, recs or no.

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#3) On April 29, 2010 at 9:39 PM, nuf2bdangrus (< 20) wrote:

CEF is your gold play.  The security is worth the premium over NAV.  That said, I did purchase JAn 11 130 calls on GLD, and ITM calls on AUY, and also bought GBG.  I will buy PHYS on any weakness.

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#4) On April 29, 2010 at 10:28 PM, binve (< 20) wrote:

nuf2bdangrus ,

I agree, CEF is by far my largest real life holding. I also agree on PHYS. I own AUY and SLW (AUY and SLW continue to be at the top of my list) and have owned GBG (back when they were GBN) in the past..

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#5) On April 29, 2010 at 10:45 PM, Momentum21 (95.39) wrote:

SLW and CEF is where the bears and (some) bulls can agree. My premise is a bit different than yours binve but the "risk/reward" that we all look at optimizing seems to line up in favor...

We seem to be up to our gills in oil and it keeps getting bid higher but someone SHOW ME THE METAL! 

Not sure if you saw my nod to you and Sinchy here... 

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#6) On April 29, 2010 at 11:05 PM, binve (< 20) wrote:

Momentum21 ,

Hey! Thanks for the nod!

>>SLW and CEF is where the bears and (some) bulls can agree.

Exactly. As bearish as I am about (most) things, I am still remain very bullish on metals. I would rather be long, and I like being long in something that is in a legitamite bull market. I might just be a brainwashed gold bug, but I still have yet to find a bull market more compelling than gold :) Thanks!..

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#7) On April 30, 2010 at 3:22 AM, ralphmachio (24.50) wrote:

As a newbie trader, Gold is confusing. Why did gold take a hit when Goldman fraud charges came to light, and then go up with Portugal/Greece issues? (I understand why the debt affects gold... but, in a stock market crash, or even moderate correction, shouldn't we expect to see a better entry price into gold?)

Kept my silver, sold my gold, plan on buying both when gold is at 800, 600. 

Can the international uncertainty aspect of this trade outweigh the deflationary aspect of this trade? Will it matter with gold's supposed leverage? How many years, or lifetimes for that matter, before there are no more forces controlling golds price, and at that point, will we be shooting each other for campbell's soup? And the grand finally- will ownership of gold make you a felon, or terrorist in the future?

Cycles are funny. Where the F%(K is McCarthy when you need him? Just goes to show, timing things is never easy;) 

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#8) On April 30, 2010 at 4:15 AM, ralphmachio (24.50) wrote:

Binve, do you read EWI? Just wondering... Gold does well when the economy expands, and if you think about it, although we have got the ever loving, well we haven't been doing so well... The BRIC Countries have been killing it. Thing is, if the global economy takes a hit, gold may take a hit accordingly. With the largest consumer being hooked on cheap credit, and that seeming to be the one thing holding it all together...

Then it's off to the races, as far as I'm concerned. I almost consider it a high risk trade to be short gold, because I do believe the upside will make gold bugs seem like geniuses for a good stretch.  But too many people are propping gold when they were trying to buy it on TV. The tide seems to be shifting. 

As a self proclaimed newbie, and someone who often gets the timing a little off, I wouldn't be surprised to find out I was on the wrong side of the short term trade. 

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#9) On April 30, 2010 at 9:27 AM, binve (< 20) wrote:

ralphmachio ,

>>Kept my silver, sold my gold, plan on buying both when gold is at 800, 600. 

It might get back down there again, but I would not hold my breath. I bought a *crap load* when we got down to 700 last time. If we get there again, I will buy a bigger crap load :), but I suspect that was a one-time gift in this particular bull market.

No I am not an EWI subscriber. But I am familiar with Prechter's view on deflation. And I don't buy it. I do think there are deflationary impulses occuring. The market *wants* deflation (it desires to purge all this bad debt), but as long as there is a Fed, they will monetize debt at ever unprecedented rates. This will make the dollar the equivalent of economic toilet paper when everything is said and done and the most likely outcome is stagflation. I outline that case, and what it means for gold here: http://caps.fool.com/Blogs/ViewPost.aspx?bpid=372061

Many other places too, but that is a nice summary with links to other posts of mine.

Thanks for the thoughts man!..

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#10) On May 04, 2010 at 12:34 AM, Vet67to82 (< 20) wrote:

 Well, the questions are certainly valid ... however, you're asking the WRONG prople for answers, that for a whole host of reasons ... like security, privacy, etc., the IMF contact(s) isn't (aren't) allowed to discuss.  Plus, if I were the IMF, I might suspect that GATA and Sprott were on a fishing expedition  ... and not really intent on making a purchase ...

 The currencies and gold, except for that actually sold to the IMF by member countries, and therefore owned by the IMF, is the property of the individual member countries.   Even the gold owned by the IMF is subject to a vote of the IMF  membership on any prospect of a sale. 

  As to the USA gold, and its whereabouts,  on record as deposited with the IMF   ... the US Congress would have to vote to authorize the IMF to sell any part of it.   Therefore, these questions would be more appropriate for any of our US Senators or Representatives.   Since "they" would be voting ... "they" certainly would reasonably be expected to have knowledge pertaining to the USA's assets, especially assets that might be sold ... or disappear.   

 The rub therein ... while "they" may be willing to disclose the info on the USA's assets.  I doubt they can offer any insight to the "holdings" of the other 185 IMF members .... which seems to be the very info your questions are seeking answers to.    

 

 

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#11) On May 04, 2010 at 9:00 AM, binve (< 20) wrote:

Vet67to82 ,

Hey Vet!

>>Well, the questions are certainly valid ... however, you're asking the WRONG prople for answers, that for a whole host of reasons ... like security, privacy, etc., the IMF contact(s) isn't (aren't) allowed to discuss.  Plus, if I were the IMF, I might suspect that GATA and Sprott were on a fishing expedition  ... and not really intent on making a purchase ...

I *totally* disagree with this. Eric Sprott is a *serious* gold buyer. He runs the worlds largest gold based hedge fund and he recently started PHYS, a fully bullion backed ETF. He made an open market purchase of 10 tonnes to start the fund. Sprott is no schlub. He is a serious investor.

So if the IMF, who had been selling gold left and right, and still had *planned* on selling, and Sprott who is very interested in buying asks why? And he gets the silent treatment.

Jesse at Jesse's Café Américain had this very insightful comment on the matter

The gold is slated to cover the central banks who leased out their gold and are now sh***ing their pants because they cannot buy it back in bulk without driving up the price and unsettling the ponzi shorts on Wall Street.  The physical market is tight. If this is not the case, why won't they take bids for it from 'outsiders?' This gold sale and the Bank of England gold sale were in relief of the bullion banks and their government bureaucrats who get caught short.  That is why they abhor the idea of audits as well.  They do not have what they say they have.  They lent it out, and it was sold.

I think that is the real reason right there.

>>  As to the USA gold, and its whereabouts,  on record as deposited with the IMF   ... the US Congress would have to vote to authorize the IMF to sell any part of it.   Therefore, these questions would be more appropriate for any of our US Senators or Representatives.   Since "they" would be voting ... "they" certainly would reasonably be expected to have knowledge pertaining to the USA's assets, especially assets that might be sold ... or disappear.

I am not disputing that. It is the extreme about-face of IMF policy in the midst of a manipulation scandal which is deeply suspicious.

But at the end of the day, when information is withheld, that is all we have: suspicion..

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