Jim Sinclair on the G20 and gold prices
Posted on 19 September 2009 with no comments from readersJim Sinclair continues to give excellent advice on his website. Here he makes six points about the G20 meeting and its likely impact on gold at $1,000. Not much is his conclusion:
1. IMF sales will never touch the gold market, but be absorbed by central banks seeking to diversify out of dollars.
2. IMF sales in the 1970s that had a market relationship via auction tranche sales took place in the conditions of a rising market.
3. IMF sales in the 1970s were credited with providing the means for major interests to enter the market in the 1970s by buying singular blocks of physical gold at one net price.
4. The value in dollars of IMF gold sales is peanuts at $13 billion when compared to at least $500 billion dollars remaining in Chinese reserves that are seeking diversification.
5. There is absolutely nothing new here from the July 27th IMF announcement as this vote after the US agreed in July was a foregone conclusion.
6. This is a repeat of the July 2009 releases which you know certainly did not stand in gold’s way. This won’t either. To the gold long this is well timed pre-G20 MOPE that will not injure the trend of gold in any sense, nor will it improve the dollar’s weak position.
no Comments posted by readers:
This IMF gold sale is a complete disgrace. The US and UK technically own 23% of that gold. Throw in US/UK allies and you’re over 50%.
So now these IMF bureaucrats, who seemingly answer to no-one, are going to sell 400 tonnes of gold at a time when the price has just broken a 25+ year bear market. This at precisely the time that China is desperately buying up scrap gold in a effort to create a real currency for themselves.
The Western governments have no shame. This is definitely the 1999 Gordon Brown blunder redux, even the tonnage is the same.
Our predecessors fought and many died in two world wars which secured this gold. Now it’s being sold for a song to our geopolitical adversaries. How terrible.
We need to keep in mind that this “IMF gold sale” was approved by the member countries (yes, the US Congress approved this sale … but like the IMF, they also don’t know what they’re doing).
But there’s two different ways of looking at this “unfolding IMF saga.”
From one perspective, the IMF officials are incompetent boobs who have excessive amounts of arrogance and stupidity (both attributes, taken together, is a terrible thing!). They do what they want, and answer to no one… while deluding themselves into thinking that they are “helping the world.” Just ask Timmy Geithner, who had a four year tour at the IMF, while doing nothing, and yet, at the same time, managed to evade paying his US taxes on “additional IMF income” (to pay for a housekeeper!) that the IMF TOLD HIM he had to pay taxes on!!!
On the other hand, we can take another perspective. The IMF is a useless organization; but the only “thing” that makes the IMF a viable entity is that it has “borrowed gold” from member countries. If the IMF continues to sell off this gold (after approval by member countries), then they become a useless organization with no finances… that spells the end of the IMF, which should have been abolished 40 years ago!
obewon, I wouldn’t be so sure that these people are merely incompetent. Dominique Strauss-Kahn was a member of the Union of Communist Students in his earlier years.
Seems like he’s quite competent in orchestrating the transfer of this sizable lot of gold to the Chinese Communists.