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The
2007 Crockett Report recommended that the IMF establish an endowment, funded
by the proceeds of limited and structured gold sales. In June
2009, the process allowing the I.M.F. to sell 403.3 tones of gold was
finalised. The joint statement on gold released in August 2009,
announcing the renewal of C.B.G.A., included the following wording: “The
signatories recognize the intention of the IMF to sell 403 tonnes of gold and
noted that such sales can be accommodated within the above ceilings.' To
date, 212 tonnes of gold have been sold by the IMF in off-market transactions
and the IMF has announced plans to offer the remainder of its saleable gold
on the open market.”
What does Phase 2
of the I.M.F. Gold sales mean?
After directly
offering gold to the world’s central banks, selling to only a few of
them, the I.M.F. moved to Phase 2 of their gold sales. Please
understand though that Phase 1 allowed the I.M.F. to announce to whom they
had sold gold and what amount. Many central banks would have been
unhappy that their potential purchase would be announced, simply because it
could affect the gold price and send it higher, making future purchases more
expensive. This is particularly so of inscrutable China,
who last year announced that they had added to their reserves over the
previous five years. This was well after the event and was seen not
to imply that more would be bought by China
[we believe they continue to buy surreptitiously]. So, once the
I.M.F. had completed Phase 1 they turned to Phase 2.
This was to the
‘open market’. The terms of Phase 2 implied, by
definition, that no buyers would be named. Sales through the open
market by the I.M.F. would be to buyers who the I.M.F. would not know
themselves. It is a condition of the ‘open
market’.
The
‘open market’
What
is the ‘open’ market? It is the gold market where
brokers or banks representing clients buy and sell gold. It is a
24-hour market where such professionals at one time or another during the day
buy and sell gold for their clients. The main physical market is
in London,
where it has been for hundreds of years. Five leading Bullion
banks come together twice a day to buy and sell gold for their clients who
are linked to them through the dealer’s banks who, in turn, are
connected to all their worldwide buyers and sellers by phone. The
results of their twice daily dealings are published on the website www.goldfixing.com where
you can see which of the banks were buyers and which were sellers at that Fix.
Why
did the I.M.F. not name those to whom they sold gold to?
Are
the names of those who bought gold from the I.M.F. known to the
market? No. Each broker or bank involved keeps the
names of their clients to themselves. This is preferred by most
clients anyway. This is perfectly normal and has no sinister
connotations, whatsoever.
To
repeat what we said above, even the I.M.F. would not know who they sold gold
to. All they would know is their own bankers who would only know
the buying banks at the time the gold sold, but not their clients.
Julian
D. W. Phillips
Gold/Silver
Forecaster – Global Watch
GoldForecaster.com
Is your
wealth effectively structured to avoid the pernicious effects of the regulatory
climate that we have moved into? It should be and we can help you to do so
professionally and within the law. Please contact us for any help regarding
this at: gold-authenticmoney@iafrica.com.
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