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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Alex who wrote (40134)	9/8/1999 6:29:00 PM
From: grampa	Read Replies (2) \| Respond to of 116796

Maybe I should get Galbraith and gramma together--she often has comments about intelligence. :-) Found that article about gold----- -----"The IMF gold is valued at less than a fifth of its real worth The International Monetary Fund may be set to drop a plan to sell gold reserves to fund debt relief. The plan is due to be discussed at the IMF's annual meeting in Washington next week. Documents published by the Dutch Finance Ministry suggest that the IMF is considering abandoning proposals for selling some of its gold reserves to pay for debt relief for the some of the world's poorest countries. Instead, the IMF has suggested that a portion of those reserves might be revalued, a move which would generate a large increase in accounting terms. The revalued gold would be sold to a group of central banks who keep part of the foreign currency reserves in gold, and then repurchased by the Fund. The profit would then be invested and used to contribute towards the IMF's debt reduction programme for a group of countries mostly in Africa and Latin America. Price campaign During the course of this year, the proposal for IMF gold sales had been gathering momentum. The IMF's members are almost all agreed that that there should be more generous developing country debt relief. Most thought gold sales had a central role in paying for it. But there has been increasingly effective opposition from gold producers, governments and corporations, especially from USA, where Congressional opposition to the plan is growing. Their concern has been that IMF gold sales would depress further what is already a very weak gold price. Now, it appears that campaign has had an impact. A document on the Website of the Dutch finance ministry gives the Dutch parliament a briefing about the IMF and World Bank annual meetings, which take place in Washington later this month. The paper says the IMF has proposed abandoning the sale of gold. Instead, it says, the IMF has proposed to revalue about 10% of its gold. This could work, because in the IMF's accounts, the gold is still valued at a level set in the 1970s - less than $50 an ounce compared with a market price today of more than $250. The IMF is reported to have said that this alternative approach would be more feasible politically. It would be a remarkable change of view for the Fund. Only last month a senior IMF official dismissed the idea of revaluing the gold, calling it "inconsistent with the Fund's Articles of Agreement." The apparent change of thinking indicates that the IMF is very keen that the programme of debt relief for the poorest countries should go ahead, however it is financed. But it may not be enough to satisfy the IMF's critics. US Congressman Jim Saxton said the plan was "about as murky as the preceding proposal, showing once again the characteristic lack of IMF transparency." Political controversy The revaluation of gold reserves to achieve a political objective has a chequered history. Two years ago the German government sought to revalue its gold in order to avoid making painful public spending cuts needed to bring down its budget deficit - in order to meet the criteria for monetary union. The German central bank, the Bundesbank, strongly opposed the plan, which it said made a mockery of Germany's claim to financial probity. The controversy damaged the Kohl government and made it more difficult for Germany to insist on tight adherence to public spending limits by other countries in the run-up to the single currency. As a result, many European countries may be reluctant to support the new IMF approach."----- --Any comments anyone?? What would that mean for "us"?