Geithner encourages IMF to consider "creative" steps with its balance sheet to help emerging nations (sell gold?)

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skyriver's picture
skyriver
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Joined: Aug 30 2008
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Geithner encourages IMF to consider "creative" steps with its balance sheet to help emerging nations (sell gold?)

WASHINGTON (MarketWatch) -- Treasury Secretary Timothy Geithner called on his G20
colleagues to take strong macroeconomic and financial sector measures in the wake
of the global market meltdown and recession but said the Obama administration's
reform program would not be ready for this weekend's meeting in London. Geithner
said the U.S. plan would be ready before President Obama goes to the G20 leaders
meeting in early April. European finance ministers have been pressing for strong
regulation, including oversight of hedge funds, but Geithner has yet to show his
cards about which regulatory steps he will support. Geithner repeated the White
House's call that G20 nations enact strong stimulus. Not all G20 nations are as
eager as the U.S. to boost spending and take on more debt. Geithner said he would
support Europe's call to give the IMF an emergency infusion of cash so it can
help emerging nations weather the crisis. But he suggested the IMF consider
"creative" steps to with its balance sheet to boost spending. Although Geithner
did not specify what he had in mind, prior discussion of the IMF's balance sheet
has usually focused on the sale of some portion of the international financial
institution's substantial store of gold.

strabes's picture
strabes
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Posts: 1032
Re: Geithner encourages IMF to consider "creative" steps ...

Hmm...I can't believe I'm associating possible good news with Geithner, but this could be good news signaling that he isn't going to just hand over more US taxpayer money to international bankers behind the IMF. That would surprise me given he and Paulson have already done that to an immense level never before seen, and I'm sure will continue to do it for the chosen few big banks on top of the US system.  

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Re: Geithner encourages IMF to consider "creative" steps ...

Not all G20 nations are as eager as the U.S. to boost spending and take on more debt. Geithner said he would support Europe's call to give the IMF an emergency infusion of cash so it can help emerging nations weather the crisis.

Geithner is one of the people most responsible for the crisis through his easy money work at the New York Fed.  Fire the Fed!

Larry

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BSV
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Posts: 170
Re: Geithner encourages IMF to consider "creative" steps ...

Central banks have long intervened in the gold market in an attempt to manipulate the value of the metal. An important question: Do First World national central banks have enough remaining gold holdings to control the direction of gold prices? In the short run, the answer is probably yes. But in the long run, it's probably "game over".

The IMF could probably sell some gold and drive the world price down -- for a while. Central banks -- in some sort of coordinated move -- could probably do the same. However, at some point their gold holdings will diminish to the point where their influence on the market price of gold is minimal. That day may not be far off. In the end, the market will determine the world price of gold. With each sell-off of gold held by national central banks, that day comes closer. While the price of gold is volatile, it is probably not a huge gamble to own gold purchased at today's prices.

I do wish I could have a child-like trust in the U.S. government and in international agencies like the IMF, but in truth I am deeply suspicious of them all. All that said, we must keep in mind the "wild card" -- which is the ability of governments to confiscate gold holdings by exchanging them for paper currency whose nominal value is government controlled by fiat.

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