India and China may press for the sale of the entire gold reserves of the International Monetary Fund (IMF)

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slabinja's picture
slabinja
Status: Bronze Member (Offline)
Joined: May 27 2008
Posts: 46
India and China may press for the sale of the entire gold reserves of the International Monetary Fund (IMF)

Check it out:

http://www.kitco.com/ind/nadler/apr172009A.html

capesurvivor's picture
capesurvivor
Status: Platinum Member (Offline)
Joined: Sep 12 2008
Posts: 963
Re: India and China may press for the sale of the entire ...

Why would they do that?

What would it mean (for us)?

Is it likely to happen?

 

SG

James Wandler's picture
James Wandler
Status: Martenson Brigade Member (Offline)
Joined: Aug 11 2008
Posts: 219
Re: India and China may press for the sale of the entire ...

SG,

I think that the world is so concerned with the financial markets and everyone believes that the ones and zeros on the bank statements is real money because they compare them to the current prices of commodities and calculate what they can buy.  I have no way to calculate this (maybe Chris has some way of doing it) but my feeling is that if all money suddenly started chasing the commodities in the world in an effort to exit financial assets for real tangible commodities then the prices of those commodities would soar.

The recent "copper standard" forum suggests China is buying up massive quantities of copper.  If they could find a way of separating a massive amount of gold from the IMF in exchange for paper money then they might avoid a spike in the price of gold if they tried to do the same on the open market.

So, although I think that Strabes is right with his assessment that the amount of money is diminishing with deflation right now, I think that the true value of commodities are so understated that they are a bargain - even if their intrinsic value is diminishing.  (Example - say gold is selling for $860 an ounce and if money started chasing it then gold might be $2,000 an ounce...as deflation currently rages and money is being destroyed then gold's intrinsic value might be dropping to $1,600 an ounce - but still a bargain compared to what appears to be a downward manipulated price of gold.  My numbers are all illustrative, I'm not the number cruncher that Chris is, but I'm comfortable being mostly right without worrying too much about the exact calculations since there is so much volatility/uncertainty anyways).

My feeling is...if what you own isn't tangible and within your possession as best you can secure it then you may not actually own much of anything....and if you own by leverage/debt then you may lose it all.  And while gold has some appeal, items of utility value are much more important.  And best of all, self-sufficiency, which requires an integrated community, is most important of all.  I'm reading No More Throw Away People by Edgar Cahn and this looks to be a fantastic way of building social capital in communities.

Cheers,

James

 

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