We have already seen that the gold shipped by the Fed to China was tungsten.
Here's more..

 

From: 
Sent: Friday, February 19, 2010 8:54 AM
Subject: FW: Economics of Empire


ECONOMICS OF EMPIRE
by
Tom Mysiewicz 

 
You are Uncle Sam.  You are geometrically expanding the scope of your
military activities (on behalf of Israel, among other things).  Therefore,
since most of the U.S. industrial base has been exported overseas for
wealthy financial interests' benefit you need a strong dollar to keep the
machine running and obtain needed equipment and supplies.
 
Well, the dollar is down, so you must first "encourage"  interest in the
dollar and T-bonds and other debt instruments you need to sell.
Fortuitously, the financial boys kick-started the process by imploding the
economies of Greece, Spain, Iceland, Italy and other countries.  This should
have been a slam dunk!  However, the ungrateful little Euro-beggars decided
they would rather buy gold instead.
 
So, what do you do now?
 
A.  You announce (have announced) a 190-ton+ sale of IMF gold (which may
turn out to be more paper shuffling among central banks.  Also, how many
times can you sell the same gold?  Where is the IMF gold and what
country--which keeps gold in a place called Ft. Knox--supplied/supplies the
IMF with most of its gold?)
 
http://www.thenews.com.pk/daily_detail.asp?id=225013
 
AND
 
B.  You raise the discount rate a quarter percent in a surprise move
(knowing that another series of discount rate hikes will KO what's left of
the economy in 1-2 years):
 
http://rawstory.com/news/afp/Fed_hikes_bank_loan_rate_in_surpris_02182010.ht
ml
 
 
Fed hikes bank loan rate in surprise move 


 <http://www.afp.com/english/home/> AFP
Published: Thursday February 18, 2010




                
 
<http://www.fark.com/cgi/farkit.pl?h=The%20Raw%20Story%20%7C%20Fed%20hikes%2
0bank%20loan%20rate%20in%20surprise%20move&u=http://rawstory.com/news/afp/Fe
d_hikes_bank_loan_rate_in_surpris_02182010.html>
http://img.fark.net/pub/FarkItButton1_80x20.png

The US Federal Reserve
<http://rawstory.com/news/afp/Fed_hikes_bank_loan_rate_in_surpris_02182010.h
tml> http://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif is raising
the interest rate on emergency loans to banks, in a surprise move seen as
the start of an exit strategy for radical measures to jolt the economy from
recession.

After two consecutive quarters of positive US economic growth
<http://rawstory.com/news/afp/Fed_hikes_bank_loan_rate_in_surpris_02182010.h
tml> http://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif, the
Federal Reserve Board said Thursday it was hiking the discount rate, or the
primary credit rate, to 0.75 percent from 0.5 percent.

Primary credit is provided by the central bank as a backup source of funds
to banks.

In a statement, the Fed said its action was part of changes to terms of its
so-called discount window lending programs "in light of continued
improvement in financial market conditions."

With immediate effect, the maximum maturity period for primary credit loans
was also shortened from 90 days to overnight.

The Fed made clear the changes "do not signal any change in the outlook for
the economy or for monetary policy."

But the market read it differently.

The dollar shot up across the board against other major currencies after the
announcement, made after the stock market closed. The euro slumped to a
nine-month low of 1.3535 dollars in late New York trading.

"The most important takeaway is that the Fed is beginning to implement an
exit strategy, which is more than what many of the other central banks are
doing and therefore this action will be extremely positive for the dollar,"
said Kathy Lien, director of currency research at Global Forex Trading.

"Although the Fed went out of their way to say that this does not equate to
a change in their monetary policy outlook, action speaks louder than words,"
she said, adding that the move "indicates how hawkish they must be and how
serious they are about tightening monetary policy."

Investors saw the action as possibly signaling "the Fed is closer to
eventually raising the Fed funds rate," the benchmark interest rate, said
Samarjit Shankar, an analyst with The Bank of New York Mellon.

At the last meeting of its policy-making body on January 26-27, the Fed left
unchanged its target range for the key federal funds rate -- the rate at
which the banks charge each other for overnight loans -- at zero to 0.25
percent.

Raising the discount rate itself "does not mean that the Fed is ready to
hike rates or has a set time for such a move but it does mean that the Fed
is preparing the way," said Robert Brusca, chief economist at FAO Economics.

"With this move, we should expect a lot more speculation on the part of
market participants about when the Fed will be willing to move its actual
policy rates for the first time."

The Fed slashed the benchmark rate to virtually zero percent in late 2008 in
an unprecedented move to induce growth to the world's largest economy as it
reeled from a financial crisis stemming from a home mortgage meltdown.

Other analysts predicted an increase in the benchmark interest rate was
still far away.

"A real tightening is still a long way off the distance, in our view, given
the continued rapid contraction in credit and the sputtering nature of the
recovery outside the manufacturing sector," said Ian Shepherdson, chief US
economist at High Frequency Economics.

Ryan Sweet, a senior economist with Moody's Economy.com, agreed.

The hike in the discount rate "does not alter our forecast for the central
bank to leave both the interest paid on reserves and the fed funds rate
target unchanged until the fourth quarter of 2010," he said.

Bank borrowings from the discount window have totaled less than 20 billion
dollars since mid-November and are 87 percent below their previous peak,
Sweet said, expecting further increases in the discount rate as the central
bank moves to normalize policy.

By hiking the discount rate and not the Fed funds rate, the central bank has
in essence widened the spread.

The gap between the discount rate and the fed funds target is typically 100
basis points. It is now 50 basis points.



 

 

 


IMF to sell 191.3 tons of gold soon


http://www.thenews.com.pk/images/shim.gif


http://www.thenews.com.pk/images/shim.gif


http://www.thenews.com.pk/images/shim.gif


Friday, February 19, 2010
WASHINGTON: The International Monetary Fund said on Wednesday it was ready
to sell 191.3 tonnes of gold on the market in a bid to reduce its dependence
on lending revenue.

At Wednesday's market price of about 1,120 dollars an ounce, the gold to be
sold would be worth nearly 6.9 billion dollars.

The fund "will shortly initiate the on-market phase of its gold sales
programme" of a total 403.3 tonnes approved for sale last September, the
Washington-based institution said in a statement.

The initial phase was set aside exclusively for off-market sales to public
entities, such as central banks, among the IMF's 186 members.

A combined 212 tonnes were sold during that first phase, more than half the
approved total snapped up by the central banks of India, Mauritius and Sri
Lanka.

India, the first customer, bought 200 tonnes, followed by Mauritius (two
tonnes) and Sri Lanka (10 tonnes).

The IMF said that the 212 tonnes of gold sold off-market to date have
fetched 7.2 billion dollars, generating profits of about 4.5 billion dollars
compared with the price assumed when the gold sale was approved.

The average price of the gold sold off-market was 1,050 dollars an ounce,
sharply topping the 850 dollars penciled in.

As for what would be done with the additional revenues, Andrew Tweedie, the
fund's finance director, said in the statement that "it is probably a little
early to speculate," given the remaining gold to be sold.

"We still need to see what happens to the gold price during the second half
of the sale before we can conclude that we have additional revenues."

The IMF underscored that gold sales were still available to state entities.

"The initiation of on-market sales does not preclude further off-market gold
sales directly to interested central banks or other official holders," it
said.

IMF members agreed in 2008 that the fund could sell an eighth of its gold
assets in order to diversify its financial model so that it no longer relies
on lending.

Profits from the sales will be used to create an income-generating endowment
that is part of the revamped IMF income model.

"In accordance with the priority of avoiding disruption of the gold market,
the on-market sales will be conducted in a phased manner over time," in line
with an approach used by central banks to avoid market disruptions, the IMF
said.

Certain banks participating in the Central Bank Gold Agreement have said the
IMF gold sales can be accommodated under the agreed ceilings of 400 tonnes
annually and 2,000 tonnes in total over the five years that started on
September 27, 2009, the fund noted.

 
 
 

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