Will IMF part with its gold on George Soros plan?
December 31, 2009 15:30:00 IST
NEW YORK (Commodity Online): In 2009, what was the most interesting and valuable proposal from billionaire global investor George Soros? Soros made a passionate plea for clean tech sector, saying that the International Monetary Fund (IMF) should part with its gold reserves to promote carbon cutting projects in the developing countries.
George Soros’ comments have invited criticism and applause. But will his suggestion that IMF should dispose of some $100 billion out of its gold reserves to spend on green loans in carbon-cutting projects to the developing countries come true in 2010?
What promoted George Soros to come out with such an outstanding view point? Analysts who have studied Soros investments point out that in 2009 the billionaire has focused all his energy and money in clean tech projects. He personally plans to invest $1 billion in clean technology.
Soros has already a couple of investments in the cleantech sector, including a clean coal company Powerspan and the cellulosic ethanol company Qteros. He has been stepping up his plans to invest in cleantech. Soros has that said he would “look for profitable opportunities,” but would also “insist that the investments make a real contribution to solving the problem of climate change.”
Last month, IMF made news when it sold 200 tonnes of gold to India’s central bank, as part of its policy decision to use the money for development programmes across the developing world. Since then gold prices have gone through the roof, touching a historic high of $1227 per ounce last week.
But what did Soros say on IMF gold and carbon emission projects?
Soros says the International Monetary Fund can use $100 billion of its gold reserves, held in the form of Special Drawing Rights (SDRs), to support green loans from rich to poor nations.
**Developed countries’ governments are laboring under the misapprehension that funding has to come from the national budgets but that is not the case. They have it already. It is lying idle in their reserves accounts and in the gold vaults of the IMF,” Soros rightly says.
**Soros’ proposal aims to tap into $283 billion of IMF money which is kept in gold reserve in case developed nations need cash injections during financial crises. These instruments are considered a “virtual currency” with a value set by a basket of real currencies.
**The IMF directors are not keen to use the gold reserve. If you’re on the IMF board of directors you like to have this nice substantial reserve to sit on so they won’t actually do this of their own free will,” Soros said, adding political will was needed to drive his initiative.
Soros said the $10 billion promised by the developed world to assist less-developed nations was “not sufficient” and the gap between what was wanted and what was offered “could actually wreck the conference.”
Soros suggested the IMF divert funds now being used for financial systems hit by the economic downturn.
The question of assistance to developing nations was a major issue during last week’s discussions in the Danish capital. Developing nations already feeling the effects of climate change – like Tuvalu, Micronesia and the Maldives – have been calling on developed nations to cut their greenhouse emissions and provide financial assistance to help the most vulnerable nations cope.
The U.N. has suggested a fund with an initial contribution of $10 billion.
Now, let us wait and watch in 2010, what the IMF will be doing with its gold reserves. Will it continue to sell more gold reserves to central banks? Will it allocate part of its gold to finance climate projects in developing countries as George Soros suggested?
December 31, 2009 15:30:00 IST
NEW YORK (Commodity Online): In 2009, what was the most interesting and valuable proposal from billionaire global investor George Soros? Soros made a passionate plea for clean tech sector, saying that the International Monetary Fund (IMF) should part with its gold reserves to promote carbon cutting projects in the developing countries.
George Soros’ comments have invited criticism and applause. But will his suggestion that IMF should dispose of some $100 billion out of its gold reserves to spend on green loans in carbon-cutting projects to the developing countries come true in 2010?
What promoted George Soros to come out with such an outstanding view point? Analysts who have studied Soros investments point out that in 2009 the billionaire has focused all his energy and money in clean tech projects. He personally plans to invest $1 billion in clean technology.
Soros has already a couple of investments in the cleantech sector, including a clean coal company Powerspan and the cellulosic ethanol company Qteros. He has been stepping up his plans to invest in cleantech. Soros has that said he would “look for profitable opportunities,” but would also “insist that the investments make a real contribution to solving the problem of climate change.”
Last month, IMF made news when it sold 200 tonnes of gold to India’s central bank, as part of its policy decision to use the money for development programmes across the developing world. Since then gold prices have gone through the roof, touching a historic high of $1227 per ounce last week.
But what did Soros say on IMF gold and carbon emission projects?
Soros says the International Monetary Fund can use $100 billion of its gold reserves, held in the form of Special Drawing Rights (SDRs), to support green loans from rich to poor nations.
**Developed countries’ governments are laboring under the misapprehension that funding has to come from the national budgets but that is not the case. They have it already. It is lying idle in their reserves accounts and in the gold vaults of the IMF,” Soros rightly says.
**Soros’ proposal aims to tap into $283 billion of IMF money which is kept in gold reserve in case developed nations need cash injections during financial crises. These instruments are considered a “virtual currency” with a value set by a basket of real currencies.
**The IMF directors are not keen to use the gold reserve. If you’re on the IMF board of directors you like to have this nice substantial reserve to sit on so they won’t actually do this of their own free will,” Soros said, adding political will was needed to drive his initiative.
Soros said the $10 billion promised by the developed world to assist less-developed nations was “not sufficient” and the gap between what was wanted and what was offered “could actually wreck the conference.”
Soros suggested the IMF divert funds now being used for financial systems hit by the economic downturn.
The question of assistance to developing nations was a major issue during last week’s discussions in the Danish capital. Developing nations already feeling the effects of climate change – like Tuvalu, Micronesia and the Maldives – have been calling on developed nations to cut their greenhouse emissions and provide financial assistance to help the most vulnerable nations cope.
The U.N. has suggested a fund with an initial contribution of $10 billion.
Now, let us wait and watch in 2010, what the IMF will be doing with its gold reserves. Will it continue to sell more gold reserves to central banks? Will it allocate part of its gold to finance climate projects in developing countries as George Soros suggested?