International Monetary Fund

I have talked briefly about the IMF in my posts and if you've read my essay the price fixing of gold you might know a little something about them. In a nutshell these guys hold the true backing of wealth in the world in the form of gold. They are the single largest holder of gold in the world. They own an estimated 3217 metric tons of gold.

Before a couple weeks ago I had never even heard of the IMF, but they are a truly fascinating organization and I can't stop myself from looking into their actions. They are basically the central bank of the central banks. I would like to share with you who their committee board regarding the sales of gold are: Andrew Crockett, former director general of the Bank f International Settlements and currently president of J.P. Morgan Chase International; Mohamed A. El-Erian, president and CEO of Harvard Management Co.; Alan freaking Greenspan; Tiito Mboweni, governor of the South African Reserve Bank; Guillermo Ortiz, governor of the Bank of Mexico; Hamad Al- Sayari governor of the Saudi Arabian Monetary ageny; Jean Claud Trichet, president of the European Centra Bank; and Zhou Xiaochuan, governor of the People's Bank of China.

As you can see its businessmen and central bankers. There's a lot of agendas within that board. I don't know about you, but I don't trust a central banker further than I can throw them, and the same goes for powerful businessmen and CEOs.

They IMF has the ability to render central banks responsible for accounting for the gold loan that are processed. In my paper, I talked about how they are taking some preliminary actions in doing just that. Well, the more I look into them the more I feel that they won't do a darn thing. It still doesn't worry me. The market forces are driving the price of gold up and they can't loan enough gold to stop it. Here is a chart regarding this information. http://www.lbma.org.uk/clearing_table.htm If you compare the numbers of the chart on the page you can see that the less gold loaned the higher the actual price of gold goes. This hold true until 2006, where the correlation seems to fail. The loaned gold seems to go back up to highs near the levels of 1999 when gold was $250 /oz. I believe that the influx of loaned gold was an attempt to once again to artificially lower the price of gold. Their action has failed. So in the long run it won't matter.

Honestly, I haven't said anything that I originally intended to talk about in this post. What I was going to say is that the IMF is selling 400 tonnes of gold from its holdings in order to raise a $400 million dollar a year shortage (until 2010) of funds regarding the current income expenses of the IMF. At current market value, that's $8.4 billions USD. This might have a short, and let me emphasize the word short, negative impact on the price of gold. Nothing has happened yet, and in the mean time gold continues to test that resistance of $650-$655 /oz. Its acting like it wants to break out in a bad sort of way.