Contrary To French Misinformation, The BRIC Block (And South Africa) Demands Non-European IMF Head, Questions Legitimacy Of Fund

Tyler Durden's picture

Today, France tried the oldest trick in the diplomatic book, presenting what it wishes was reality as reality, when it said that China had backed its candidate for the IMF presidency under Christine Lagarde. That's great, only it's totally false. Not only has China not endorsed Lagarde, but according to a statement just released by Jianxiong He of China, as well as every other BRIC, the developing world has just put its stake in the ground and is firmly behind a non-European candidate, stating that "we also believe that adequate representation of emerging
market and developing members in the Fund’s management is critical to
its legitimacy and effectiveness." Not surprisingly, the BRICs reference an old promise by none other than Jun(c)ker which "declared that “the next managing
director will certainly not be a European” and that “in the Euro group
and among EU finance ministers, everyone is aware that Strauss-Kahn will
probably be the last European to become director of the IMF in the
foreseeable future”."
By creating the BRICs (and South Africa which is a co-signator of the statement), Goldman may have just created a New New World Order Frankenstein monster which will refuse to blindly go with the demands of its now insolvent master. In the meantime, the diplomatic faux pas by the French, if anything, will merely antagonize China, which has so far refused to unpeg the CNY only due to demand by the US to do precisely that, as any accession to foreign demands would be seen by China, and its billion plus producers (and eventual consumers), as a sign of weakness.

From the IMF:

Statement by the IMF Executive Directors Representing Brazil, Russia, India, China and South Africa on the Selection Process for Appointing an IMF Managing Director
Press Release No. 11/195
May 24, 2011

We, as Executive Directors representing Brazil, Russia, India, China
and South Africa in the International Monetary Fund (IMF), have the
following common understanding concerning the selection of the next
Managing Director of the International Monetary Fund:

1) The convention that the selection of the Managing Director is
made, in practice, on the basis of nationality undermines the legitimacy
of the Fund

2) The recent financial crisis which erupted in developed countries,
underscored the urgency of reforming international financial
institutions so as to reflect the growing role of developing countries
in the world economy.

3) Accordingly, several international agreements have called for a
truly transparent, merit-based and competitive process for the selection
of the Managing Director of the IMF and other senior positions in the
Bretton Woods institutions. This requires abandoning the obsolete
unwritten convention that requires that the head of the IMF be
necessarily from Europe. We are concerned with public statements made
recently by high-level European officials to the effect that the
position of Managing Director should continue to be occupied by a

4) These statements contradict public announcements made in 2007, at
the time of the selection of Mr. Strauss-Kahn, when Mr. Jean-Claude
Junker, president of the Euro group, declared that “the next managing
director will certainly not be a European” and that “in the Euro group
and among EU finance ministers, everyone is aware that Strauss-Kahn will
probably be the last European to become director of the IMF in the
foreseeable future”.

5) We believe that, if the Fund is to have credibility and
legitimacy, its Managing Director should be selected after broad
consultation with the membership. It should result in the most competent
person being appointed as Managing Director, regardless of his or her
nationality. We also believe that adequate representation of emerging
market and developing members in the Fund’s management is critical to
its legitimacy and effectiveness.

6) The next Managing Director of the Fund should not only be a
strongly qualified person, with solid technical background and political
acumen, but also a person that is committed to continuing the process
of change and reform of the institution so as to adapt it to the new
realities of the world economy.


Aleksei Mozhin, Executive Director (Russia)

Arvind Virmani, Executive Director (India)

Jianxiong He, Executive Director (China)

Moeketsi Majoro, Executive Director representing South Africa

Paulo Nogueira Batista Jr., Executive Director (Brazil)

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Ecoman11's picture

Did the BRICs setup DSK? If so that was a brilliant move.

JW n FL's picture

You can NOT Buy a Cop in New York!

Bloomberg on the other hand may be behind something for the homeland?

theXman's picture

Looks like BRICs want something out of the negotiation. They won't necessarily block Lagarde, they just want something in return, perhapse a large share of the voting rights. I believe the position is still Lagarde's to lose. Whatever Junk said a few years ago does not matter.

trav7777's picture

how about not another of the same ethnicity as all the rest of the western banking industry?

silberblick's picture

Click below to see a visual graph of Bankster's dirty needs arranged according to Abraham Maslow's hierarchy of needs:

Urban Redneck's picture

The next Managing Director of the Fund should not only be a strongly qualified person, with solid technical background and political acumen

Diplomatic to English translation- BRICS veto Lagarde

Popo's picture

They didn't need to.  The Empire is burning on its own.

JW n FL's picture

whomever wins this fight for head of the IMF.. their Country will be the next Egypt / Spain.. that is of course if we dont pick them.

cossack55's picture

Is Iceland part of Europe or is it in the new "land of the free" zone?  I would nominate an Icelander, but only if their name is pronounceable. 

JW n FL's picture

and people say I'm Harsh! LOL!!

achmachat's picture

anyone else thinks it would be a good idea to buy tons of CNY and then just patiently wait for China to unpeg it?

Nicholaz's picture

Good luck trying to buy CNY in the first place.

achmachat's picture

that is very easy for me. Part of my family lives on the other side of the Great Wall.

Besides, at the Bank of China branch here in Luxembourg, you can now have an account in CNY if I'm not way off...

uniman's picture

I am an American citizen living in China.  I can get CNY.  If you are interested in figuring out how to do that, please let me know.

Coldfire's picture

No luck required at all. If you're in Hong Kong, you can buy up to CNY20,000/day/account. If you are in Singapore, there is no limit to the amount of CNY you can buy.

Eager learner's picture

I can confirm there are also branches of China's national bank in England. You can open an account and deposited funds can be transfered to and from CNY via the interpipes banking at I believe no fee.

Downside is the account gets 0% interest. But it would be suitable for what achmachat is proposing.


goldfreak's picture

i was wondering the same thing, why not buy CNY and hold it?

can you buy it at the airport? wouldn't be the cheapest way

Votewithabullet's picture

They have branches in the states and you can purchase only so many every day. If you perform a service in china you can recieve payment in renminbi/yuan. Caveat its made of paper.

trav7777's picture

CNY??  Why?  Do you really think some paper that they print the shit out of to maintain false growth is going to increase in real value??

Eager learner's picture

Considering the Chinese manufacture and export a lot of stuff and have, as a result, massive currency reserves, yes. Clearly they have their own problems including high domestic inflation. But that inflation presents very good reasons to unpeg. Happier population (especially because the Chinese have high savings rates) and increased domestic consumption reducing reliance on exports being a couple.

Put it this way. If they unpeged their currency tomorrow do you think it would increase or decrease in value?

Ultimately it depends on how you define real value but as a short term play I think the idea has merit.

Eager learner's picture

I've been considering it and checked out the bank accounts they are offering . The drawback is they are 0% interest (at least in the U.K.) and incur bank fees.

I think they are more for facilitating doing business and getting paid in CNY as you basically get two accounts (One denominated in your local currency, the other in CNY) which I believe you can transfer between at current exhange rates for no fee as many times as you want.

If you can get actual currency that might be the better option. Trading bank fees against security I guess.

If you timed it right it could be a nice little earner.

Ecoman11's picture

You don't need to buy a cop. You just buy-off a maid.

Cleanclog's picture

I think it's a good time to dust off my old Drachmas.  New sheriff coming to town.

edotabin's picture

Yeah....get your old bills, get a sharpie and write "NEW" right next to the picture of Zeus. :-)

Cdad's picture

You know, and when these stories are breaking left and right, we brother's often mockingly say of it, "Bullish!"  Dispensing with the irony of it, I would suggest here that the more chaos sewn into the IMF, the more truly bullish it is for JUSTICE and RIGHTEOUSNESS and TRUE PRICING.

So more of it, please.  More revelations of entitlement crimes, please.  MORE!

knowless's picture

whatever happened to the league of nations?

see one of those that was never a member? they played sort of a big role up until recently..

for real though, the chaos will spawn a new order based on those who actually produce, tis inevitable.

ebworthen's picture


Has no one suggested we get rid of the IMF altogether?

Do we need a good world war to come to our senses?


cossack55's picture

Add the World Bank, ECB, HSBC, UBS, JPM and GS and ya got a deal.

living on the edge's picture

Add the BIS while you're at it.

topcallingtroll's picture

Actually we kinda sorta need a world trade clearingness.

It just shouldnt be run by thieving, corrupt Swiss.

matrix2012's picture

yet it's the most prosperous nation [with the highest income per cap]! Or should it be called the richest thief :D

nmewn's picture

"Has no one suggested we get rid of the IMF altogether?"

Thank you.

I've never been a fan of bio-engineering larger parasites when the small ones cause enough misery to the host as it is.

rockraider3's picture

Uh Oh.  Did skynet just gain self-awareness?  The Western powers have lost control of their machine.   Who tries to pull the plug?  Not the US, we are a bunch of pansies.

Cheesy Bastard's picture

The Bastard family has a diverse and dubious history.

InconvenientCounterParty's picture

"Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the opponent's fate."

Sun Tzu

Stupidity can seem clever if you use big words. A thick accent helps too. And above all keep your pimp-hand strong -The most interesting man in the world AKA DSK
Rainman's picture

I didn't know there were Jews in China

Cult_of_Reason's picture

If BRICs want to run IMF, it is fine with us. The only condition we will take our money back and let the BRICs fund IMF without us.

How much China or Russia contributes to IMF?


0.00001% or 0.0001%?

Babushka's picture

Each member of the IMF is assigned a quota, based broadly on its relative size in the world economy, which determines its maximum contribution to the IMF’s financial resources. Upon joining the IMF, a country normally pays up to one-quarter of its quota in the form of widely accepted foreign currencies (such as the U.S. dollar, euro, yen, or pound sterling) or Special Drawing Rights (SDRs). The remaining three-quarters are paid in the country’s own currency. Quotas are reviewed at least every five years. Ad hoc quota increases of 1.8 percent were agreed in 2006 as the first step in a two-year program of quota and voice reforms. Further ad hoc quota increases were approved by the Board of Governors in April 2008, resulting in an overall increase of 11.5 percent. The 2008 reform came into effect in March 2011 following ratification of the amendment to the IMF’s Articles by 117 member countries, representing 85 percent of the IMF’s voting power.

Cult_of_Reason's picture

Yeh, this is a very good idea to let communist China or corrupt Russian oligarchy to determine how to spend other people’s money (mostly US, EU and Japan) at the IMF.

topcallingtroll's picture

Actually the brics are the crybabies here, wanting something for nothing.

Itsalie's picture

"take our money back" as in Ben's toilet paper? Take it back please, its dirty. BRICS have got oil, coal, gold, iron, rare earths. You are funding euro crisis and your lehan/squids with funny money dude, wake up, those greenback in your pocket are lighter vthan your pea brain

topcallingtroll's picture

Then brics can put up or shut up.

Hedgetard55's picture

Whoever they nominate, let's hope he can keep it in his pants for more than two hours.

goldfreak's picture

how about bubba clinton to run the IMF?

sethstorm's picture

You might as well be putting someone from China in with any Clinton. 

treasurefish's picture

I am now very confident in my long SLV position.  Thanks.