To the IMF and the countries of the world, gold has no real value. Each country can purchase gold from citizens with their own currency. It used to be that a currency was backed by gold and could be redeemed at the gold window. President Nixon closed the gold window for the US. So in essence, gold has little meaning as far as trade goes. With the financial markets, options can be bought to cover currency fluctuations. Gold has been removed from the equation.
One factor not often considered is that there are security considerations for storing gold. You have to keep it in a secure and controlled environment. In third world countries that is just about impossible. Several countries have “gold rooms.” This is where gold is stored in different locations around the world. So if the US was to transfer gold to Brazil in the New York office, it would go from room 10A to 12b. If the room 12b got filled up, Brazil would send a boat to pick up the surplus. This is how it worked when the world was on a gold standard; that all ended 35 years ago.
Figure that the IMF doesn’t deal in gold, it deals in currency. It loans money not gold. Gold is not a commodity that is useful in lending, it is not bad as collateral, but to a bank, it has to be sold for currency before they can use it. The IMF doesn’t need gold, it needs currency. Gold has no value to them. It is like a person in the desert with 1000 ounces of gold and no water, you can’t drink the gold.
I contend that the IMF never had any gold and doesn’t need any; it has no functional purpose to them. They have the rights to currency valued with gold for each country, based on their current conversion rate and that is all they need to operate as a bank lender. Our representatives at the IMF are Tim Geithener and Ben Bernanke.
So what are we looking at here? Figure that India was just the middleman. Let me suggest that China wanted some assurances that the money loaned to us was not just paper. I am suggesting that the US transferred to the Chinese 403 metric tons of gold as a down payment on our 1.5 trillion dollar tab with them. That figures out to be about a
I could be dead wrong on this, but something smells funny here.