IMF’s Gold Assets Shrank in April as Russia’s Rose - Bloomberg

http://www.businessweek.com/news/2010-06-30/imf-s-gold-assets-shrank-in-april-as-russia-s-rose.html
Bloomberg

IMF’s Gold Assets Shrank in April as Russia’s Rose
June 30, 2010, 12:11 PM EDT

By Nicholas Larkin

June 30 (Bloomberg) -- The International Monetary Fund’s gold holdings fell by 15.25 metric tons (490,286 ounces) in May, according to figures from the Washington-based lender. Russia’s assets expanded by 22.46 tons.

Reserves of gold at the IMF were 2,951.58 tons at the end of May compared with 2,966.83 tons at the end of April, data on the IMF’s website show. Russia increased holdings to 703.1 tons in May, from 680.64 tons, and has added gold every month since at least February, the data show.

The IMF plans to sell a total of 403.3 tons of gold. India, Mauritius and Sri Lanka bought 212 tons last year and the IMF in February said it would begin selling the remainder on the open market. The combined February-to-May sales would leave about 137.5 tons as of the beginning of last month.

This “is an indication that they will continue to sell the remaining 137.5 tons on-market as opposed to via off-market transactions with other central banks,” said Daniel Major, an analyst at Royal Bank of Scotland Group Plc in London. “Indeed the decline in gold sales from European central banks and purchases from India, Russia and China in recent years demonstrates gold’s growing popularity with central banks.”

Central banks have been adding to reserves and gold-backed exchange-traded fund assets have advanced to a record as investors sought an alternative to currencies and a protection of wealth from Europe’s debt crisis. Gold traded at $1,243.45 an ounce at 4:16 p.m. in London and reached a record $1,265.30 on June 21.

China Reserves

Central banks and governments added 425.4 tons to their holdings last year to 30,116.9 tons, the most since 1964 and the first expansion since 1988, data from the World Gold Council show. Official reserves may expand by another 192 to 289 tons this year, CPM Group, a research and asset-management company in New York, said last month.

China increased its reserves of gold by 454 tons to 1,054 tons since 2003, the Foreign Exchange Administration said in April last year.

--Editors: John Deane, Claudia Carpenter.

To contact the reporter on this story: Nicholas Larkin at nlarkin1@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net.

Gold & IMF

The IMF holds a relatively large amount of gold among its assets, not only for reasons of financial soundness, but also to meet unforeseen contingencies. The IMF holds 103.4 million ounces (3,217 metric tons) of gold, worth about $83 billion as of end-August 2009, making it the third-largest official holder of gold in the world.

The IMF's Executive Board recently approved limited sales of gold. Learn more about Gold and IMF.

Morning Gold Fix June 21, 2010 - ZeroHedge.com

http://www.zerohedge.com/article/morning-gold-fix-june-21-2010Courtesy of www.fmxconnect.com

Gold closed Friday at 1258.3 and has continued its advance in early Asian & European trading. Over the weekend, China announced that it would remove the Yuan’s peg to the Dollar and allow it to appreciate gradually. The Yuan rose to record strength against the dollar on the news and will continue to increase under China’s central bank measured management. Gold has gained from the subsequent losses to the Dollar and treasuries, with the August contract trading as high as 1266.5 this morning. A stronger Yuan has also led some speculators to believe China may use its increased purchasing power for gold, a contention we remain skeptical of given the quantity of domestic producers.

Someone likes gold: Gold spikes to a new record on heavy buying Friday.

BRIC SQUEEZE

There was plenty to be happy about if you are a Gold bull this weekend.

The stalking horse behind last week’s strength showed its hand in the gold markets. China made the announcement they'd be ending their peg to the dollar.

The Saudis revised their gold holdings up from 143 to 322 tons, a small (+125%) rounding error perhaps.

What's more, among the most read stories on Bloomberg was something from July 10 last year titled: Medvedev Shows Off Sample Coin of New ‘World Currency’ at G-8. The dollar barbarians are closing on the gates it would seem.

Last week, the IMF released a whitepaper of sorts discussing a new global currency. Most likely a red herring to get the conversation going at the upcoming G-20 meeting, but a sign of gathering momentum nonetheless.

Which brings us to the point. We think there is a greater chance than many that gold will be a factor in currency backing in the not too distant future.

Why a gold backed currency is more likely than you think:

1- Russia and Germany are working towards forming an alternative to the dollar as medium for exchange between their two economies. Most likely this will have some weighting of commodities in it. Natural Gas would be an obvious choice, since Russia exports to western Europe through the region.

2- China is decoupling, their buying power will soar

3- One thing the West still has more of than BRICS is gold. As a percentage of GDP and reserve holdings the U.S. Germany, France and England dwarf the BRICS.

4- throughout history, powerful people do what they have to preserve their incumbent status.

If it were me, and I wanted to stay in economic power, I’d buy all the Gold I could and then devalue the cash I used to buy it. Then I’d create a new currency backed by Gold. If I were stressing about budget deficits and weak partners in the ECB and I had a decent Gold hoard to begin with, I’d be thinking about that.

If I were all ready long gold and knew there was pent up demand out there coming from the BRIC countries and I had the ability to print money to buy more gold forcing the other buyers to pay up I might consider doing that.. Just saying….

August gold was up 3.8 to $1262.1 per 100 troy ounces as of 8:20 AM EDT, this morning. The September U.S. dollar index was down .076 to 85.9. July platinum was up 18.7 to $1597.8 per 50 troy ounces. Silver was up 18.6 cents to 19.37.

CLICK HERE for today's market quote

-Elizabeth Thawne

SDRs and World Currency - Bob Chapman on Economics 101

corbettreport.com — June 16, 2010 — June 16, 2010 — Bob Chapman the International Forecaster is a guest today of the corbettreport.com he discusses the IMF administered Special Drawing Rights and the plausibility of a world currency , the future of the Euro and the forecast for the Gold....the dollar just seems to be the best of the worst , Gold could very well become the world's currency says Bob Chapman the International Forecaster.....the Euro is dead because it is an un-natural thing Robert Chapman explains...there is no international currency that will ever work...

For more of Bob Chapman's analysis, please go to his homepage:

http://www.intforecaster.com/

Eric King of King World News interviews Jim Rickards

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/6/14_Jim_Rickards.html

In this interview Jim Rickards of Omnis Inc. discusses his recent meetings at the US Treasury and the FDIC, the fact that we are headed towards a one world currency and bank, that the G-20 and IMF do not want it to be backed by gold, that he thinks any green shoots will be stomped on immediately and much more.

JIM RICKARDS DISCOVERS IMF DOCUMENT UPDATE June 15, 2010 Eric King from King World News Blog
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/6/15_Jim_Rickards_-_Discovers_IMF_Document.html


The IMF distributed a document late on a Friday when its representatives thought no one would catch it. Leave it to Jim Rickards of Omnis Inc. to track it down. The IMF document discusses the gold standard and gold’s role as a monetary unit. Jim discussed the importance of this in our interview released yesterday and below is a link of the IMF document he located.
June 15, 2010

From the opening of the IMF Document:

“Under the Gold Standard, the major national currencies were freely convertible to gold at a fixed exchange rate, with adjustment largely undertaken through flexible prices, wages and income. This system survived up to the outbreak of the First World War, and while it was subsequently re-established in a modified form following a painful period of post-war disinflation, the economic and political strains of the Great Depression led to the system’s ultimate collapse in the 1930s.”

They left out the fact that the Federal Reserve was created one year prior to the outbreak of World War I and it helped to fuel the credit boom which caused so many dislocations and human suffering.

Putting that aside for a moment because that is a discussion for another day, the very fact that an IMF document was discussing a history of gold in such detail as this one does surprised me. There is much more in the IMF piece, but let’s move on to Jim Rickards thoughts from his interview:

“But the alternative is to find another engine, another liquidity pump if you will, and that’s clearly what the G-20 leadership would like to do, and their sort of chosen candidate are the SDR’s, and their chosen vehicle is the IMF. So basically the IMF putting out SDR’s, will over time displace the Fed printing dollars as the engine of world trade, world liquidity and world growth.”

“So, that can’t happen overnight, that is a momentous shift. It’s going to require a lot of consensus building among the G-20 members. So what they do is they put these papers out, get the dialogue going and get it on the agenda, talk about it, get people kind of used to it. The average citizen has kind of no idea, it’s not that their dumb it’s just that they’re not necessarily informed or trained in this fairly technical area, and so it’s the kind of thing the elites can pull off without a lot of accountability and they are definitely headed in that direction.”

Jim’s interview covers tremendous ground. It is linked above.

Eric King

KingWorldNews.com

To read the IMF document CLICK HERE.

Zero Hedge Articles of Interest

Confirmation Of Chinese IMF Gold Purchasing Intentions?
http://www.zerohedge.com/article/confirmation-chinese-imf-gold-purchasing-intentions

Federal Reserve Balance Sheet Update: Week Of February 25 - Just $45 Billion Left In Quantitative Easing
http://www.zerohedge.com/article/federal-reserve-balance-sheet-update-week-february-25-just-45-billion-left-quantitative-easi

Is Ben Bernanke The Second Coming Of Rudolf von Havenstein, The Central Banker Responsible For Germany's Hyperinflationary Collapse (And Ostensibly WWII)?


http://www.zerohedge.com/article/ben-bernanke-second-coming-rudolf-von-havenstein-central-banker-responsible-germanys-hyperin