Senators oppose IMF gold sales (fwd)

[Robert Weissman <rob@essential.org>]

Senators Oppose IMF Gold Plan
Date: Wed Jun 23 15:20:19 CDT 1999

        WASHINGTON (AP) -- A plan by the International Monetary Fund to sell
gold to finance debt relief for poor countries would hurt many of these
nations and the U.S. gold industry, two senators said today.
        Sen. Jesse Helms, chairman of the Senate Foreign Relations
Committee, and Sen. Chuck Hagel, chairman of the subcommittee on
international economic policy, said they have joined a bipartisan group to
oppose the gold sales, which require congressional approval.
        In a letter to Treasury Secretary-designate Larry Summers, the
senators said, ``We are unalterably persuaded that selling IMF gold reserves
would adversely affect the very countries the administration intends to
assist and further damage the U.S. domestic gold industry.''
        Opposition also came from lawmakers representing gold mining states.
``It ain't going to happen,'' predicted Sen. Richard Bryan, D-Nev.
        Helms, R-N.C., and Hagel, R-Neb., said that in the past month, since
Britain announced it was selling a portion of its gold reserves, the price
of the gold has plunged to a 20-year low of $258 an ounce.
        They said they were concerned that the United States, the second
largest producer of gold after South Africa, would lose jobs and companies
would go bankrupt if the prices continue to fall.
        Helms and Hagel said 36 of the 41 nations intended to benefit from
the IMF gold sales are gold producers and ``if sales further depress gold
prices, it is questionable that benefits from debt relief would outweigh the
harm done by falling prices.''
        Leaders of the world's main industrial nations meeting last week in
Cologne, Germany, gave the go-ahead for the IMF to sell 10 million ounces of
its $27 billion in gold reserves to help finance the IMF portion of debt
relief for poor countries.