Soviet Sales of Gold Seen as Sign of Desperation

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THE Soviet Union has been selling off strategic gold reserves, sparking new concerns about the country's troubled economy.

"Dipping into reserves is the last resort," says Marshall Goldman, head of Harvard University's Russian Research Center. "It's either a sign of desperation or because the price of gold is unusually high - I think it's a little of both."

Two developments spurred the recent sales, analysts say. First, Moscow's hard-currency crunch is exacerbated by urgently needed consumer imports and pressing repayment demands from Western suppliers. Second, Iraq's invasion into Kuwait spiked gold prices to well over $400 an ounce, signaling a profitable time for Moscow to sell on the international market.

A financial adviser with the Comptroller of the Currency here says that reports of Soviet gold sales - as much as $1 billion over the course of several days, compared with the $2 billion to $3 billion average sale during a single year - are "no surprise." Soviets are "looking to put their payments back on track" and good credit is essential to "their efforts toward convertibility of the ruble," he says.

According to US Central Intelligence Agency estimates, Moscow holds $25 billion to $32 billion in gold reserves. But Roger Robinson, a private consultant who was senior director of international affairs at the National Security Council during the Reagan administration and a former Chase Manhattan banker with Soviet and East European portfolios, puts the range at $15 billion to $22 billion. Since 1986, he says, when Soviet oil revenues plummeted due to lower world oil prices, the Soviets have sold $10 billion of strategic reserves, in addition to selling annual gold production. "They continue to dip into dangerously low reserves to pay for imports," he says.

Before 1986, "the Soviets never sold as much as they mined, which was 200 tons annually," says Judy Shelton, author of "The Coming Soviet Crash." She says Moscow's "credit rating has slipped dramatically" since its payments crisis last fall when Soviet leader Mikhail Gorbachev ordered an emergency $16 billion consumer goods purchase to quell labor unrest.

During 1990, she says, "the Soviets have probably been working the market, selling production and reserves for some quick cash and pledging additional gold as collateral to creditors and suppliers. I know they have been moving a lot of it - Aeroflot flights have landed in London loaded with gold to be used as collateral for new credits with commercial and central banks."

Robinson says the current Soviet objective is to "keep the price of gold reasonably high and stable. They don't want to dump too much on the market, or they'll look desperate and drive the market price lower. …