<>ESL, Really great to see you back.

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The piece posted below by Kenneth Gerbino is part of a much longer article written by him in February 2005, around the time the IMF was kicking up its heels over the "needed" sale of gold then. It gives some good background why the proposed sale was eventually defeated in the US Congress. The reasons seem to be still valid today, especially South Africa with power problems making their situation worse. Note that one of the opponents was Ron Paul who I'm sure hasn't changed his position.

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by Kenneth Gerbino: February 2005

IMF bureaucrats want to sell some of the IMF gold reserves and use it to give poor nations debt relief. This seems like a negative for gold, but it is a scheme that will not happen and should be understood by mining professionals and investors as to why.

Gold investors should realize that Central Bank and IMF gold sales are already factored in and discounted by the gold market and have been for the last 40 years. This has been a constant and long-term discount and it has always been in the market. If all the official gold were not in the hands of these government institutions gold would most likely already be trading at over $750 an ounce.

The government of South Africa will not allow in the world of public opinion their most important industry to be once again rocked by any gold sales or "dumping" for political reason that would upset the price of gold, especially with the Rand so strong.

Black Empowerment Groups in South Africa which now own billions of dollars worth of gold mining assets will not sit around while a few European bureaucrats attempt to try and destroy their piece of the South African pie that they have been fighting for and struggling to attain for over a century. This group will rally a huge support base of international conservatives and liberals to their cause against the latest IMF scheme.

Politically in the U.S., the IMF would have tremendous opposition from both Democrats and Republicans in both the House and the Senate. For starters, here are just a few of the opponents who have voted against gold sales in the past and have expressed very strong opposition to any IMF gold sales. The bankers would have to run over this group to get the U.S. Congress, which has voting control over any and all IMF voting. The U.S. controls 17% of the voting rights of the IMF Charter and 85% is needed to sell any gold, therefore the U.S. controls this issue. Below are just a few of the opponents to the idea.

    Senator Harry Reid (D - Nevada) already has voted against past sales and he is now Minority Whip, one of the most powerful positions in the U.S. Government.

    Senator Tim Johnson (D- S. Dakota) ranking member of the Financial Institutions sub-committee of the Senate Banking Committee.

    Congressman Tom Delay (R- Texas) House Majority Leader the second most powerful legislator in the House.

    Congressman Jim Saxton (R- New Jersey) Chairman of the powerful House Armed Services Committee and ex-Vice Chairman of the Joint Economic Committee. One of the most powerful elected officials in D.C.

    Congressman Ron Paul (R - Texas) Vice Chairman of the Oversight and Investigations sub-committee on Financial Services, past sponsor of the Gold Coin Act of 1984, which passed by one of the widest margin of any monetary bill.

These men and many others have plenty of distrust for paper money schemes and understand that gold is an important monetary and reserve asset and should not be used to pay off bad loans made by the bureaucrats at the IMF.
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If permitted by Agoracom, the rest of the article is located at:
http://www.gold-eagle.com/editorials_05/gerbino021105.html