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To: Enigma who wrote (32864)	4/29/1999 6:14:00 PM
From: John Hunt	Respond to of 116866

What Is the International Monetary Fund? << The IMF is in fact none of these. It is neither a development bank, nor a world central bank, nor an agency that can or wishes to coerce its members to do very much of anything. It is rather a cooperative institution that 182 countries have voluntarily joined because they see the advantage of consulting with one another in this forum to maintain a stable system of buying and selling their currencies so that payments in foreign money can take place between countries smoothly and without delay. >> << On joining the IMF, each member country contributes a certain sum of money called a quota subscription, as a sort of credit union deposit. Quotas serve various purposes. First, they form a pool of money that the IMF can draw from to lend to members in financial difficulty. Second, they are the basis for determining how much the contributing member can borrow from the IMF or receives from the IMF in periodic allocations of special assets known as SDRs (special drawing rights). The more a member contributes, the more it can borrow in time of need. Third, they determine the voting power of the member. The IMF itself, through an analysis of each country's wealth and economic performance, sets the amount of the quota the member will contribute. The richer the country, the larger its quota. Quotas are reviewed every five years and can be raised or lowered according to the needs of the IMF and the economic prosperity of the member. In 1946, the then 35 members of the IMF paid in $7.6 billion; by 1998, IMF members had paid in $193 billion.1 A proposal to raise quotas to about $280 billion is awaiting approval by at least 85 percent of the IMF's membership. The United States, with the world's largest economy, contributes most to the IMF, providing about 18 percent of total quotas (about $35 billion); Palau, which became a member in December 1997, has the smallest quota, contributing about $3.8 million. >> imfnt1x.imf.org DD, Some pretty interesting stuff in this summary. Still looking. John

To: Enigma who wrote (32864)	4/29/1999 6:52:00 PM
From: John Hunt	Read Replies (1) \| Respond to of 116866

Gold in the IMF << The IMF holds 3,217,341 kilograms of gold (103.4 million fine ounces) at designated depositories, valued in the IMF's financial statements at SDR 3.6 billion on the basis of SDR 35 per ounce (except for a minor amount accepted by the Fund in 1992 in partial settlement of a member's overdue obligations, and valued at the then-prevailing market price). Valued at current market prices, the IMF's holdings amount to some $30 billion. These holdings represent the balance of the IMF's stock of gold after the gold auctions and the restitution of gold to members in the period 1976-80. While gold is reflected as an asset in the IMF's balance sheet, it is not used in the Fund's operations and transactions. According to Article V, Section 12 (b) of the IMF's Articles of Agreement, any transactions in gold by the IMF require an 85 percent majority of the total voting power in the IMF. The IMF may sell gold outright on the basis of prevailing market prices; it may accept gold in the discharge of a member's obligations to the IMF at an agreed price on the basis of prices in the market at the time of acceptance. The IMF does not have the authority to engage in any other gold transactions, e.g., loans, leases, swaps, or use of gold as collateral, and the IMF does not have the authority to buy gold. >> << The IMF's Policy on Gold In 1995 the IMF's Executive Board reviewed the role of gold in the IMF and concluded that its policy on gold should be governed by the following principles: As an undervalued asset held by the IMF, gold provides fundamental strength to its balance sheet. Any mobilization of IMF gold should avoid weakening its overall financial position. Gold holdings provide the IMF with operational maneuverability both as regards the use of its resources and through adding credibility to its precautionary balances. In these respects, the benefits of the IMF's gold holdings are passed on to the membership at large, to both creditors and debtors. The IMF should continue to hold a relatively large amount of gold among its assets, not only for prudential reasons, but also to meet unforeseen contingencies. The IMF has a systemic responsibility to avoid causing disruptions to the functioning of the gold market. Profits from any sales of gold should be retained and only the income deriving from the investment of those profits used for any operations that might be agreed. >> imfnt1x.imf.org Again a very interesting IMF link ... We may as well all know what we are talking about. :-)) John