Since I am always skeptical of conspiracy thoeries it took me awhile to come to terms with what is going on with the gold price and the US dollar. Of course I must say I am not an expert, so read with caution.

I have read that the big houses in NY that have the "divine" right granted by the Fed to sell US treasuries are oblgated to sell everything the Fed throws at them or risk losing that right. Therefore I would conclude that since Gold is and always has been money,they must retain the streagth of the US greenback in order to move the "PAPER" the Fed is printing. As it was pointed out before on this board and in many articles in the past, Gold futures contracts move a very small percentage of the overall physical gold yet those contracts set the price for all Gold held (go figure).

The Chinese Government and the Saudis, as the biggest holders of US debt must be very carefull as to how they get out of these treasuries. If they turn their paper into gold and devalue it, they also devalue all of the paper they still hold. I believe that this is why they are stockpiling other commodities. Unfortunately for the US however is that this cannot go on forever, and the Chinese in particular are coming up with many ingeneous ways to reduce US dollar exposure on the sly, without setting off a stampede. One of the more ingeneous ones is to lend their US dollars to somebody else and then use that loan as collateral to take a loan and buy something of value. In effect hedging their US exposure.

Rookie

PS

Any more word on who got the 400 tons from the IMF