Friday, April 03, 2009
Well, it looks like the IMF may finally unload that 403 tonnes of gold they've been talking about selling for the last couple years. It should raise a whopping $12 billion which, honestly, sounds like a drop in the bucket compared to the trillions that have been spent trying to fix the financial mess we are all in.
China may end up buying the whole thing. If I were them, I certainly would.
They've got about $2 trillion in U.S. dollar denominated assets about which they have become increasingly skeptical regarding its long-term value. Why not spend about half of one percent of their reserves on something that has intrinsic value?
It would be like having $1,000 and trying to decide if you should spend six dollars. That's about as close as you can get to a "no-brainer" in the world of central banking.