Poor Nations Chase 'Elusive' IMF Gold
Source: Commodity Online (4/30/09)
"U.S. House of Representatives Democrat Rep Barney Frank...'IMF should keep $4 billion of the proceeds for loans to poor countries.'"
But the Democrat put a rider to his demand saying that the IMF should keep $4 billion of the proceeds for loans to poor countries. He told new agencies that he is for gold sales only if it allows $4 billion for poor countries.
After the G-20 summit cleared the IMF plan to sell gold, poor nations are chasing the treasure now. In a world of shaky stock markets, gold has skyrocketed in value. Developing countries and anti-poverty advocates want the IMF to sell a chunk of its gold stash and share the wealth.
Even before the financial meltdown sparked economic emergencies in every corner of the globe, the IMF had embraced the idea of selling some of the gold it keeps in various depositories. Who will get to use the profit is being discussed ahead of weekend meetings of the IMF and World Bank in Washington.
In recent years, business has been slow at the IMF, the world's lender of last resort. Countries haven't been borrowing. People were even beginning to question the IMF's relevance.
Looking down the road, the IMF board in May cleared a broad financial overhaul plan that included selling one-eighth of its booty of gold—it has some 103.4 million ounces—to give it a new stream of operating revenue and ensure the soundness of the fund over time.
Anticipating that a gold sale would reap much more money than anticipated, the Group of 20 nations decided at its summit earlier this month in London that $1 billion of the money derived from the sale should be used to leverage low-interest loans to low-income countries, including those affected by the financial meltdown.