Gold Hits Record High as India Dumps Dollars

India’s run on the U.S. dollar to buy 200 tonnes of gold from the 403.3 set to be sold by the International Monetary Fund set the precious metal to an all-time high value of $1,081+, meaning the  inflated dollar has crashed to an all-time low as the U.N. reports a drop in U.S. wages.

The International Monetary Fund quietly planned to sell 403.3 metric tons of its reserves. Immediately, New Delhi’s Reserve Bank took the opportunity to rid itself of U.S. dollars (USD) being recklessly and fraudulently printed and credited by the Federal Reserve to buy nearly half of the bullion. The USD firesale sent gold sales to record high value of over $1,081.

“Gold prices on Tuesday surged to an all-time high after India’s central bank bought 200 tonnes of the precious metal, swapping dollars for bullion as the country’s finance minister warned the economies of the U.S. and Europe had ‘collapsed’,”Javier Blas and James Lamont report at the Financial Times (FT). India sold off $6.7bn of its U.S. dollar reserves for 8% of global mine production, sending the “strongest signal yet that Asian countries were moving away from the U.S. currency”, they add.

“The move was replicated on the Comex division of the New York Mercantile Exchange, which saw December gold peak at $1,081.70/oz.,” The Wall Street Journal (WSJ) reports.

The move comes months after China announced that as it was heavily increasing its holdings in toxic U.S. currency, it had increased its gold reserves by nearly 60% over the last six years.

At the recent G-20 Pittsburgh Summit, Western ‘leaders’ pushed for Eastern developing powers to invest in toxic Washington, D.C.-based I.M.F. Special Drawing Rights (SDR’s) which artificially props up Trilateral currencies—the USD, euro, yen and pound—while trapping these countries under a ceiling and further plundering the Third World.

Sha Zukang, undersecretary-general at the U.N. for economic and social affairs, recently called for SDR’s as a “global reserve currency” to move away from dollar hegemony.

“An I.M.F. official said the sale was concluded at an average price of about $1,045 an ounce and that the transaction would be paid in hard currency and not in [SDR’s],” Surojit Gupta and Lesley Wroughton report at Reuters. The move comes months after China announced that as it was heavily increasing its holdings in toxic U.S. currency, it had increased its gold reserves by nearly 60% over the last six years.

“The proportion of gold as part of its total foreign reserves has fallen from over 20% in 1994 to just under 4%,” Reuters adds—as paper money issued in “good faith” and credit guarantees by central banks have flooded the marketplace to the financial oligarchs on the backs of the global plantation. “The market’s focus has now shifted to China, which has reportedly been in talks with the I.M.F. about buying some of the fund’s bullion as Beijing seeks to shift some of its more than $2tn in foreign exchange reserves away from the U.S. dollar.”

“Gold is up 23% this year while the U.S. Dollar Index, which measures the greenback’s performance against six major currencies, has dropped 6.1%,” Pham-Duy Nguyen and Claudia Carpenter report at Bloomberg. “The previous record for bullion traded in New York was $1,072, set on Oct. 14.”

“Traders and mining executives tipped China, Saudi Arabia and Middle Eastern sovereign wealth funds as candidates to snap up the rest of the gold the IMF plans to sell,” the FT reports.

India and China have formed an economic alliance with Brazil and Russia to begin dumping U.S. monopoly money from their reserves toward hard reserves like gold. The USD’s saving grace, Middle East oil, is wearing thin as Middle East members of the Organization of the Petroleum Exporting Countries are conspiring with Japan and other countries to abandon the U.S. dollar. Iran has completely abandoned the dollar from the its reserves. Nine Latin American powers have approved a document to replace the dollar with a new intra-regional currency. Japan has neither the financial nor the political capital to further enable the losing proposition of the U.S. warfare-welfare State.

“President Barack Obama has increased the nation’s marketable debt to an unprecedented $7tn as the government borrows to fund spending programs intended to revive economic growth,” Bloomberg adds. “The Federal Reserve, which began a meeting on monetary policy today in Washington, has kept the benchmark U.S. interest rate between zero and 0.25% since December.”

As I noted in an article demanding the abolition of the Fed: “In his 1994 book, The Case Against the Fed, Prof. Rothbard proves ‘the very purpose of its existence [is] to cartelize the private commercial banks, and to help them inflate money and credit together, pumping in reserves to the banks, and bailing them out if they get into trouble’.”

With the U.S. Congress recently passing a military spending bill for $680bn that doesn’t exist and a ‘healthcare reform’ bill on the horizon costing, according to the WSJ, $1.055tn over ten years—which social democrat Rep. Dennis Kucinich (D-OH) recently called “a bailout for insurance companies“—central banks of productive nation-states are hedging against inflation over crediting the worthless U.S.

The Federal Reserve has inflated the currency through bailouts and crediting Wall Street for an undisclosed amount up to hundreds of trillions of dollars which also doesn’t exist—up to over 200 times the U.S. monetary base, the real costs of which will be forced upon the global plantation.

Today, the U.N. International Labour Organisation (I.L.O.) global wages report [.pdf] found growth in real wages slowed from 4.3% in 2007 to 1.4% in 2008 and projects “suggest an even bleaker picture” for 2009, Frances Williams reports at the FT. “In the U.S. each 1% increase in nominal wages (ignoring inflation) generated $60bn in additional household income, said Patrick Belser, an I.L.O. economist. Instead, nominal U.S. wages had fallen 2% so far this year after a steady decline in 2008.”