Thanks MD-IMF Gold Sales to Face Intense Congressional Scrutiny
In Tuesday's Midas du Metropole, I mentioned to you that
my contact in Congress, the House Staff Director of the
Joint Economic Committee, informed me that as a result of
a Dick Armey query, the political heat was picking up
on the IMF gold sales issue and that Jim Saxton was
looking forward to speaking with GATA. That
meeting is being scheduled now and we are trying to
coordinate that meeting with our presentation about gold
and the Long Term Capital Management bailout to a banking subcommittee.
This press release was just brought to my attention and
confirms the information that I conveyed to you.
For Immediate Attention April 16, 1999
IMF GOLD SALES TO FACE INTENSE
CONGRESSIONAL SCRUTINY
-- Extensive Review of IMF Finances Underway --
WASHINGTON, D.C. – The proposed gold sales by the International Monetary Fund (IMF) face intense Congressional
scrutiny in coming months and an increasingly uncertain future,
Vice Chairman Jim Saxton of the Joint Economic Committee
(JEC) said today. Majority Leader Dick Armey recently asked
Saxton and the JEC "to carefully examine the economic and
financial issues involved," noting that the proposed gold
sales raise serious policy questions.
"I can guarantee that the IMF gold sales proposal will face tough scrutiny and review in Congress in coming months,"
Saxton said. "The JEC will be examining this proposal in the full context of IMF finances and policies, as requested by Majority
Leader Armey. It would be inappropriate and unwise for officials
of the IMF or Treasury to prejudge Congressional
consideration of this proposal. Congress has made no commitment to support the proposed gold sales, and until it disposes of this
matter there can be no official U.S. government approval.
"The comments yesterday by an IMF official suggesting
optimism about Congressional consideration of IMF gold sales
were especially questionable. The IMF and Treasury should
be informed that there is no groundswell of support for
IMF gold sales in Congress, and that skepticism and
opposition are building.
"There is considerable concern that in the end this may
provide a back-door way to expand IMF usable resources.
The vagueness of the proposal and its financial
implications reflect the lack of transparency characteristic
of IMF policy initiatives. Furthermore, with about 25 percent
of its outstanding credits owed by Russia, and 70 percent of outstanding credit owed by only five nations, it is reasonable
to ask whether further erosion of the IMF balance sheet is
desirable at this time. The devolution of the IMF into
another World Bank should be halted.
"The IMF and Treasury also should be prepared to explain why
the IMF continues its policy of deeply subsidized interest
rates, including its current standard loan interest rate of
3.5 percent. If the IMF needs additional resources to fund
debt relief, it can easily do so by charging market interest
rates on its loans. I am concerned about the unwillingness of
the IMF to comply with the reform legislation passed last year
that mandates the use of market interest rates in typical IMF bailouts.
"If the IMF and Treasury wish to make a case for gold sales
to increase resources, they must explain why the IMF insists
on depressing its inflow of interest payments by setting
artificially low interest rates. However, the case for deeply subsidized interest rates is indefensible on economic grounds.
Instead of gold sales, the IMF should use market interest rates
on all of its loans, and it should close its concessionary loan programs," Saxton concluded.
END
The Gold Anti Trust Action Committee has reached its first
short term fund raising goal but more funds will be needed to
achieve our objectives. Our address for those of you who still
wish to support our efforts is:
GATA
PO BOX 885
Great Barrington
Massachusetts, 01230
USA
The website address is: www.gata.org
It is our opinion that the true equilibrium price of gold
today would be between $400 to $500 per ounce if the
manipulators of the gold market retreated from their
positions. GATA's goal is turn up the heat on them so
they do just that. Our PR campaign starts next week. If
you are a shareholder in a gold company, take heed. The
more visible GATA and the more we convey the truth about
the gold market to the financial communtity, the faster
your gold shares will go up in price.
All the best,
Bill Murphy
Le Patron of www.lemetrolecafe.com
Chairman, Gold Anti Trust Action Committee Inc.
|
