The price of gold spiked up sharply today on the news that the IMF has been quietly selling gold to India over the past few weeks totaling 200 tonnes. The excuse given was that IMF needed to raise money for its bailouts of various third world countries. Some are newly members of the third world like Iceland. This need for cash is a transparent lie of course, the IMF does not own any of its own gold but has pledges from its members to provide over 3000 tonnes of gold to provide legitimacy to the IMF. If it needed currency, it could have all it wants by the same mechanism. The third world country the IMF based in Washington DC is desperately try to prop up is the United States of America. By taking Dollars out of circulation they hope to keep countries like India from dumping them on the market.
China has been quietly buying gold for several years, purchasing at least a 100 tonnes this year alone bringing its total holdings to well over a thousand tonnes. China has been telling its own people to put at least 5% of their savings into copper, silver or gold. In the US, coins contain no precious metals to speak of, even "copper" pennies are made of nickel and the mint would prefer to make coins of steel if not stop minting entirely. The rest of our money is imaginary, why mint coins?
The world wide banking crisis last year panicked holders of Euros into buying Dollars because the historical belief has been that the US is the most stable economy in the world. This fiction has worn thin and we’re gradually converting to a gold backed world economy. This is a problem for the holders of trillions of Dollars as a reserve currency. It’s a really big problem for any country that has been printing Dollars to fiancé its trade deficit.
China has been unloading Dollars for hard assets and natural resources anywhere they can. India was not in a position to do this on any scale so they went with gold. In the US, Warren Buffett is apparently on the same page. He paid 34 billion in cash for 100% stake in a railroad, one of the hardest of hard assets you can still buy in the US.
If times get really hard Buffett can probably count on government subsidy for operating expenses. And if we convert entirely to fascism, railroads will be in big demand. Moving troops, tanks and people.... www.prairie2.com