Accounting Alchemy.

Author:Estevez, Matthew
Position:International Monetary Fund gold accounting trick - Brief Article
 
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THE INTERNATIONAL MONETARY FUND IS RAISING BILLIONS OF DOLLARS FOR POOR developing countries using accounting alchemy. The complicated scheme is aimed at shoring up the Fund's image as a cold and cruel bill collector. Here's how it works.

Instead of making debt payments, Brazil and Mexico buy gold from the Fund and then give it back. The value of the returned gold is recorded at the market price instead of the original, much lower price mandated by the institution's charter. The revaluing of the gold from the original US$48 per ounce to a market rate of around $300 generates prodigious paper profits.

Brazil and Mexico bought and returned 7 million and 655.000 ounces of gold, respectively, to generate a total windfall of $1.78 billion for the Fund. While Brazil and Mexico do not...

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