IMF GOLD TRADING RULES CHANGES ARE SET TO BOOST GOLD PRICE
 

FOR MY MONEY - THE SINGLE MOST IMPORTANT GOLD STORY SO FAR THIS MILLENNIUM!

IMF GOLD TRADING RULES CHANGES ARE SET TO BOOST GOLD PRICE
From AMEInfo.com, Dubai
Sunday, January 28, 2007

The International Monetary Fund is in the process of revising the laws that govern the trading of gold by the world's central banks, which will radically change the ability of central bankers to suppress the gold price, a major factor depressing the price of the yellow metal that has been an open secret for years.

This sort of systemic market reform will likely have a huge impact on the gold market. It is like the "Big Bang" changes to world stock markets that started in the 1980s and led to an explosion in equity ownership and higher price-to-earnings ratios.

That gold prices have been artificially depressed for decades is not hard to establish. Consider the nominal peak oil price last year of $78 a barrel, twice the previous nominal peak value reached in 1980. Gold by comparison hit $725 an ounce last year yet is still below its nominal peak value in 1980.

What has been happening is that central bankers have been swapping and loaning gold in the gold market to keep the price down to produce another false indication that inflation is under control.

Some analysts allege that they have actually now lent considerably more gold than they have in their vaults, so the world's gold's reserves are smaller than reported; and the lack of gold audits from central banks just adds to this suspicion.

.... IMF Review

The IMF has been reviewing all aspects of the gold trade by central banks for the fifth edition of its Balance of Payments Manual, which includes the regulations governing gold swaps and loans. IMF officials told ResourceInvestor.com that a draft edition will be posted for worldwide comment within two months.

It remains to be seen whether the central banks now manage to sabotage this attempt to control their alleged gold market manipulation. But the very publication of the draft rules, which have clearly been endorsed internally by the IMF, throws down a major challenge to the banks.

For gold traders and even the general public, the suppression of the gold market is pretty obvious. Market news that should move the gold price up is often anticipated by the central banks, which appear to shuffle a few transactions between themselves to send the price in the opposite direction.

... Gold Cartel to Fall?

But such are the growing size and interest in the gold market that participants are increasingly ganging up in protest at such blatant manipulation that would not be tolerated in any other financial market. It looks as though the IMF has decided that enough is enough and decided to call it a day.

The ending of any price suppression or cartel in a market is usually a bullish signal. What would the gold price be in a free market without the central banks swapping and loaning gold among themselves?

Well, it does not take much imagination to see that a rebalancing of gold's position relative to other assets and currencies would follow. That the IMF has now put the gold market out for open discussion is clearly the first step toward a new era for the yellow metal.

How long that era will take to arrive is still a matter of conjecture. But the idea of stocking up on gold while prices are still low has intrinsic appeal; or buy silver or other precious metals that would also rise alongside the gold price, perhaps even higher.

Re: IMF GOLD TRADING RULES CHANGES ARE SET TO BOOST GOLD PRICE
 

no it won't. Have any effect.

The amount of gold in the world is pretty much what it is. Aside from jewelry, it is all tradable. If the hoarding is in this place or that place, is neither here nor there. Doesn't matter.

This is a big yawn.

Re: IMF GOLD TRADING RULES CHANGES ARE SET TO BOOST GOLD PRICE
 

Grape - it may not affect the pricing - and it might - but to me, the most important aspect it that is confrims what most of us here know but what many refuse to consider - it confirms the gold market IS manipulated.

Re: IMF GOLD TRADING RULES CHANGES ARE SET TO BOOST GOLD PRICE
 

Re: IMF GOLD TRADING RULES CHANGES ARE SET TO BOOST GOLD PRICE
 

Scott - yes, I did see that and thanks for linking it to here!

Re: IMF GOLD TRADING RULES CHANGES ARE SET TO BOOST GOLD PRICE
 

well we are sure it is manipulated. And we *know* that currency markets are manipulated.

But then again, does this matter much? In the long run, no manipulation can change the outcome. The Japanese spent huge foreign reserves on currency trading intervention and finally (for now) gave up. Even in the intermediate run I'm not sure it matters.

What's scary today is how so much credit hedge fund "money" is pursuing relatively thin commodity markets at the drop of a hat. These hedgies can move these thin markets like nobody's business. We've seen it especially in the base metals for the last several years.

It will stop when there is a huge credit contraction due to some crisis. But it will stop!

Re: IMF GOLD TRADING RULES CHANGES ARE SET TO BOOST GOLD PRICE
 

What suprises me is the IMF wants to correct this issue. :s10: I wonder why? What makes the IMF suddenly honest, and why do they care? They are part of the scam, too.

The only thing I can think of is there is a major plan coming down the road in the next few years, and this sudden "honesty" movement is part of the plan.

What do you think, Master Ho?

The Great Ag

Re: IMF GOLD TRADING RULES CHANGES ARE SET TO BOOST GOLD PRICE
 

Those are damn good points.

I maintain my position on this story which I iterated at first blush, namely that the net effect of increased transparency could be a drop in price as much as a gain. One does not know how markets will necessarily respond to increased transparency in a given product especially one for which demand is pretty elastic. We are not talking insulin here! None of the big buyers of gold really NEED it in the absolute sense. We see only in part and obscurely; behind the curtains of the central banks there may be interest in dumping such gold as they have.

Re: IMF GOLD TRADING RULES CHANGES ARE SET TO BOOST GOLD PRICE
 

I posted this on another page talking about this same issue:

http://www.resourceinvestor.com/pebble.asp?relid=28416

Here is where I posted it:

http://goldismoney.info/forums/t1047...t-the-imf.html


IMF Has Not Adopted Accounting Changes to Gold Loans
By Jon A. Nones
25 Jan 2007 at 04:06 PM EST

St. LOUIS (ResourceInvestor.com) -- Earlier this week Blanchard & Co., a New Orleans-based bullion and coin dealer, released a press statement saying the International Monetary Fund (IMF) has adopted a number of accounting changes to the lending of gold reserves by central banks, and will begin implementing those changes in the coming year. IMF told Resource Investor today otherwise.
In response to press queries about a January 22 press release from Blanchard, claiming the IMF made accounting changes for recording gold loans, IMF spokeswoman Conny Lotze sent the following statement to RI:

<TABLE align=right><TBODY><TR><TD vAlign=top><!-- rare earth metals --><!-- http://banners.absolpublisher.com/cr...8}/newmont.jpg --><TABLE cellSpacing=5><TBODY><TR><TD><SCRIPT src="http://banners.absolpublisher.com/Tracker.js"></SCRIPT><SCRIPT>if(typeof TrackBanner!="undefined") TrackBanner("985C32AF-83DD-4BFB-9830-72A301E8F9C4");</SCRIPT><SCRIPT language=JavaScript src="http://banners.absolpublisher.com/delivery/delivery/Deliver.aspx?posid=985C32AF-83DD-4BFB-9830-72A301E8F9C4&atc=0.654655816326269&ref=http%3A//www.silver-investor.com/&ttl=Resource%20Investor%20-%20Gold%20%26%20Silver%20-%20IMF%20Has%20Not%20Adopted%20Accounting%20Change s%20to%20Gold%20Loans&tzn=360&js=yes&uid=119929216 8024-30526&cky=2&clb=P21R196E" type=text/javascript></SCRIPT><OBJECT id=P19R203E codeBase=http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0 height=250 width=300 border=0 classid=clsid:D27CDB6E-AE6D-11CF-96B8-444553540000 name=ABS>
























<embed src="http://banners.absolpublisher.com/delivery/creatives/{6EC89592-6D02-4E9C-A8BE-5B9F20EB8272}/Newmont Mining - replacement banner.swf" flashvars="qstring=http%3a%2f%2fbanners.absolpubli sher.com%2fdelivery%2fdelivery%2fclickthrough.aspx %3furl%3dhttp%253a%252f%252fwww.newmont.com%252fen %252f%26user%3d1199292168024-30526%26hb%3d0%26cb%3d1%26pid%3d985C32AF-83DD-4BFB-9830-72A301E8F9C4%26cid%3d710EAFF5-6ECA-4455-8C22-0203B0D02802" pluginspage="http://www.macromedia.com/go/getflashplayer" type="application/x-shockwave-flash" id="P19R203E" name="ABS" width="300" height="250" ></OBJECT></TD></TR></TBODY></TABLE></TD></TR><TR><TD></TD></TR></TBODY></TABLE></P>“At this time the IMF has not adopted any new accounting changes for the recording of gold loans. A review is taking place in the context of the update of the fifth edition of the IMF's Balance of Payments Manual and has involved experts from the Fund, other international agencies, and a number of member countries,” said Lotze.
The IMF’s Balance of Payments Manual governs the accounting and reporting functions of central banks through a set of rules and regulations. The manual regulates how reporting should be handled across a large spectrum of issues, which includes gold swaps and loans.
Blanchard’s statement was a follow-up to a paper by the company published on December 14, 2006, entitled “Gold Market Lending,” which prompted a debate with Kitco’s Jon Nadler. Within the paper, Blanchard’s Director of Economic Research Neal Ryan alleged that unaccounted amounts of gold loaned into the market had a direct impact on the price.
He said the IMF had been reviewing all aspects of their Balance of Payments Manual so that proper updates to the Manual can be implemented in the near future. This week’s statement by Blanchard said that the IMF had indeed made the decision to go ahead with changes to the way central banks account for gold loaned in the market.
Blanchard Chairman and CEO Donald W. Doyle, Jr. said the newly adopted accounting change means that central banks will no longer include the amount of gold they have loaned and sold into the market as part of their reserve total assets.
He added, “this decision by the IMF will greatly redress that issue as these accounting changes are implemented.”
However, Lotze said there has not been any decision made and papers on this and other issues are “being addressed” and have been posted on the Fund's external website.
“We anticipate posting a draft version of the whole Manual for world-wide comment within the next two months,” said Lotze.
Ryan told RI today that the public stance by the IMF press officer is in direct contrast to what was posted by the Reserve Asset Committee (RESTEG) as a concluded issue for them from their October meeting in Frankfurt, Germany.
“I have been told directly by members of the Reserve Asset team that the only issues left are to decide how to implement the change and allow public comment.”
Within the meeting notes of the “Nineteenth Meeting of the IMF Committee on Balance of Payments Statistics,” Ryan pointed to a list of concluded issues beginning on page 4, where on page 7, No. 27, it reads: “In this treatment, unallocated gold accounts held with residents (such as bullion banks) are excluded from reserve assets.”
“As you can see in the paper, the issues on changes to gold lending as far as the IMF RESTEG Committee is concerned is a concluded issue,” he said.
But according to the IMF, consultations are still on-going and this is just a summary of outcomes. On page 19 of the document, the IMF states:
“There was a clear majority in favor of maintaining the current treatment of monetary gold. Further consultation with Committee members is needed on unallocated gold accounts held by monetary authorities (paragraph 27 of the paper). This issue will involve further consultation with Committee members.”
But Ryan said the committee has made its conclusions and is continuing to work on how to implement, not if to implement.
“This is where I think the disconnect exists with the press officer and the committee,” he said.

IMF has laid out many of the issues on gold loans and gold deposits prepared for the technical expert group on reserves in a paper, entitled “Treatment of Allocated/Unallocated Gold Held as Reserve Assets and Gold Swaps and Gold Deposits.”
The latest full-scale review of the manual began in 2005 and is scheduled for full implementation in 2008.

Re: IMF GOLD TRADING RULES CHANGES ARE SET TO BOOST GOLD PRICE
 

I agree - I don't think they "want" to do it - and I fully would expect them to lie about their numbers - they always have........

What I was thinking was that they had so much flack over the manipulation stories going around that - to give the illusion of a free and open market to the rest of the world - they came out and basically said they would make sure things were kosher.

So it was not so much a win except an admission from them that they manipulted in the past - and that would make, as you said, "this sudden 'honesty' movement a part of a plan.

BUT NOW I HAVE TO GO BACK AND SEE THE ARTICLE THAT SAYS THE FIRST ARTICLE WAS WRONG.......SO I HAVE TO SOOT UP AND READ THAT!


OK.............

TURNER-SON - Thankyou so much for that update.......

WELL - the bottomline seems to be that, much like I thought, even if its not been implimented yet - they are at least giving us the illusion of seriously looking into it......there have been just too many stories, and obvious incidents (some of you might remember Digiwench and I were tracking some mid-summer, day by day), of gold manipulation - so they have to give the illusion of cleaning up their act.

Again - for me the main thing is - they are, without actually coming out and stating it - acknowledging the manipulation that GATA and others have been talking about.......and many of us on this site feel the same way - that there is manipulation.

I am not sure anything will change - at least immediately - but it sure must make those who claim gold manipulation clains are "worthless conspiracy theories" another think!