INTERNATIONAL MONETARY FUND
IMF PLANS TO SELL GOLD
The International Monetary Fund (IMF) has developed a plan to sell off 10% of its $26 billion gold stockpile and to use the money to provide debt relief to the poorest, most indebted countries. This plan has produced some serious opposition from the US Congress Financial Times (FT) reported on July 9, 1999.
While the plan to sell off the gold has strong support from the administration, Canada and England, a bipartisan group of legislators strongly opposes the sale.
The Washington Post reported on July 1, 1999 that House Majority Leader, Dick Armey (R-Texas) and Rep. Jim Saxton, (R-New Jersey) vice chairman of the Joint Economic Committee, have introduced legislation which would prohibit the sale unless the profits are returned to the member states. They are concerned about channeling billions of dollars to the IMF bureaucracy.
Democratic opposition has emerged from Senators from gold producing states, Tom Daschle, Minority Leader and Tim Johnson (both from South Dakota) and Harry Reid and Richard Bryan (both from Nevada) says FT.
Opposition grew stronger after Britain, in an effort to deal with its debt problem, took the first step in selling its gold to reduce its reserves from 715 tons to 300 tons, reported Reuters on July 9, 1999. Gold hit a 20-year low of $258 per troy ounce after the Bank of England auctioned 25 tons, the first of five planned sales. The British complained that the only people who came out well were the Americans who sold short on the commodities market.
Since 36 of the 41 countries targeted for debt relief are also gold producers, the gold sales would harm their economies and negate the effect of the debt relief, critics claim. South Africa claims that at the price of $258, 40% of South Africa's gold production will become unprofitable, causing the loss of more than 80,000 jobs and plunging 800,000 Africans into poverty. The Black Caucus in Congress, all Democrats, has joined the chorus of critics.
The disasterous results of the July 6th Bank of England sale has raised protests from not only the British people, who want to stop the sales, but also from the Australians whose dollar was dragged down by the plummeting gold price.
The IMF sale must be approved by 85% of the member states, and since the United States has a 17% vote, action by the Congress to block the gold sale could shelve the plan.
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Donald Lambro reports in The Washington Times National Weekly Edition (Jan. 4 - 10, 1999) that while President Clinton was bombing Iraq in December, the administration-backed International Monetary Fund (IMF) was making plans to normalize relations with Saddam Hussein's outlaw regime.
The IMF has been planning for some time to resume relations with Iraq and to consider providing it with technical advice to improve its statistical systems -- with the help of billions of dollars that American taxpayers gave give to this international lending agency (27% of its budget).
The startling disclosure of this information was made by Paul Chabrier, chief of IMF's Middle East office, who said that IMF officials planned to travel to Iraq in February and that they were considering the Iraqi request for technical information and other help.
The disclosure of this information has not produced any reaction from the Clinton Administration but has enraged Rep. Jim Saxton (R.-NJ), the Joint Economic Committee Chairman who has been IMF's chief critic on Capitol Hill.
The IMF has refused to respond to Mr. Saxton's demands for an explanation of Mr. Chabrier's announcement. The Administration has had no public comment on the report or a response to Mr. Saxton's criticism of its seeming approval of the IMF's actions.
Mr. Lambro concludes:
The bottom line is this: Throughout last year's long debate over U.S. funding for IMF, which some Republican leaders tried to block or at least reduce, Mr. Clinton and Vice President Al Gore insisted that IMF funding was a critical tool of U.S. global economic policy. But now we learn that our money is being used in direct contradiction to the national security interest the president outlined in his televised address to the nation when he announced the bombing of Iraq just hours before the House was getting ready to impeach him.
The IMF and its unquestioning allies in the White House have a lot of explaining to do.
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