Worthless "Officials" Sell Off Precious Gold

Jon Nadler at Kitco.com ran across an article in The Financial Chronicle (India) which reported that “India and China may press for the sale of the entire gold reserves of the International Monetary Fund (IMF) to raise money for the least developed countries. The IMF holds 103.4 million ounces (3,217 tonnes) of gold that, if sold, can fetch about $100 billion,” so that “the money thus raised must be used in tackling poverty in the poorest nations,” which makes sense if you think that you are “tackling poverty” by bailing out their rich-nation creditors, including the World Bank itself.

Apparently, it is a fait accompli anyway, as “The G20 heads of state meeting in London earlier this month agreed to sell a part of the IMF gold to raise $6 billion for poor countries during 2009-11. This was a component of a $1.1 trillion package worked out by G20.” Whew!

The World Bank – which is a total failure, which is explained by it being a ludicrous clot of communists and socialists – never saw economic tragedy coming, either, and estimates that “over 90 million people may be pushed into poverty in the global economic turmoil.”

The Really Funny Part (RFP) is when “an official” said, “We are working on a more ambitious proposal of selling the entire gold off, as it is an idle asset with the IMF”! Hahaha!

It’s so idle, and yet here they are selling it to bail themselves out because they don’t have anything else to sell that is worth anything! Hahaha! What a moron!

Gold is thus functioning perfectly, as it retains its value when everything else has turned to crap, and yet here is some “official” of the worthless World Bank looking us right in the eye and saying they want to get rid of it all! Wow! What numbskulls!

It makes you wonder, “What will they do next time when there is no gold ‘sitting idle’ that they can sell?” Hahaha!

It was later that we read, “The gold, if sold, would go mostly to central banks,” which makes you wonder what in the hell is going on, since it has been the central banks that have been big sellers of gold for years, and now they are getting the gold of the International Monetary Fund – the “central bank of central bankers” – that was the original gold that we gave them as collateral against their stupid Special Drawing Rights? Hahaha! Now SDRs will be fiat currencies, too! Hahaha!

Mr. Nadler writes that the reason is because, “One thing is clear; we have long warned that the line of poor, and about-to-become-poorer, nations holding their outstretched hands at the IMF’s doorstep, had wrapped around the block. The institution has not been faced with this kind of global panhandling in its entire history.”

To add insult to injury, it is embarrassing to have it explained that “India and China are looking at three ways of using the money so raised. 1) The $100 billion be invested to improve IMF’s liquidity. 2) The money be committed to improving incomes of the poorest countries. 3) A mix of the first two options be considered.” Hahaha!

Before I dismissed this odious piece of ignorant, thieving crap entirely, I thought I would first try this at work as a last-ditch, desperation attempt to save my job!

So the next day I went in to see my boss and told her that my new plan was to sell the company’s only assets to “tackle the poverty” of some guys who owe me money, which is money that I loaned them by borrowing it from their pension fund, so that they can pay me back my money, so that I can pay back the pension fund.

To make sure the plan “sells” I literally used the World Bank format, and I told her, “We are looking at three ways of using the money so raised. 1) All the money be invested to improve my liquidity. 2) The money be committed to improving the incomes of the poorest debtors. 3) A mix of the first two options be considered.”

Alas, it did not work for me, and my job is as tenuous as ever (probably more so!), and so I assume it will not work for the IMF, either, but as weird and bizarre as it is to even suggest doing such a thing, MoneyWeek.com reports, “The gold market is behaving in ways never seen before” and “in recent months the supply of old gold scrap – consisting mainly of jewellery sold by owners to turn their metal into cash – has actually exceeded demand for jewellery manufacturers.”

The other numbers are as peculiar, like, “According to research consultancy GFMS’s Gold Survey 2009, world demand for jewellery fell 10% last year, supply of scrap rose by 27%, official sales halved, and investment demand soared 61%.”

Now, I can understand how people can get so far in debt that they sell their gold, and I can understand how heavily-indebted people can cut back on buying expensive baubles and bangles, and I can see how official sales can be halved by interventionist governments in collusion with each other and bullion banks, but none of that can explain why investment demand is “soaring” unless they see profits, which they obviously do!

Whee! This investing stuff is easy!

Until next time,

The Mogambo Guru
for The Daily Reckoning

The Daily Reckoning