The Art Of Extortion: Now At The IMF

Wolf Richter's picture

Wolf Richter

Treasury Secretary “Hank” Paulson was the trailblazer with his proposal for TARP in September 2008. He walked into the Capitol with a list of demands—unlimited powers to hand unlimited amounts of taxpayer money to whomever—and threatened that the whole world would collapse if his demands weren’t met immediately.

When Congress didn’t go for it, markets fell off a cliff, and Paulson’s world of finance appeared to come to an end. So Congress approved a more limited TARP, which ended up being irrelevant compared to the trillions the Fed would hand out. Thus, Paulson’s extortion had worked—though the source of money had shifted from the Treasury to the Fed. It would be copied.

In November, just after the G-20 meeting in Cannes, France, it was Greek Prime Minister Giorgios Papandreou’s turn. With a single sentence about a referendum on Greece's exit from the Eurozone, he knocked the world’s financial markets into a tailspin. His message: give me more money and larger write-downs on Greek debt, or else I will say a whole paragraph. It reopened the spigot, and money started flowing again (temporarily).

In early January, it was Greece’s new Prime Minister Lucas Papademos. He threatened the world with “disorderly default.” His goal: impose salary cuts on private-sector workers and ever bigger “voluntary” haircuts on banks and hedge funds that hold Greek debt. “So we can get the next loan installment,” he explained. Unions rebelled, and bondholders dug in their heels, but they started talking again. For that whole debacle, read.... Greece’s Extortion Racket Maxed Out.

Now Christine Lagarde, managing director of the IMF, has stepped into the extortion racket herself and threatened that there would be another Great Depression—the red line on the financial threat-o-meter—if certain countries and their taxpayers didn’t fork over more money. She never mentioned Germany and the US by name, but those were her prime targets.  

"It is about avoiding a 1930s moment," she said at the German Council of Foreign Affairs in Berlin, "a moment, ultimately, leading to a downward spiral that could engulf the entire world."

Paulson couldn’t have phrased it more darkly.

The discussions Sunday evening between her and German Chancellor Angela Merkel must have been interesting, and there was no dog and pony show or even common statement afterwards. But Monday, Lagarde made clear what she wanted:

- €500 billion in mostly German taxpayer money to double the size of the future bailout fund, the ESM, to €1 trillion, so that it would be large enough to bail out Italy and Spain. Their insolvency "would have disastrous implications for systemic stability," she threatened. So, pay up German taxpayers.

- $500 billion in taxpayer money from around the world, specifically from the US, Japan, and Germany, the three largest contributors to the IMF, to double its bailout lending power to $1 trillion.

- More government spending in those European countries that can afford it, to stimulate the economy for everyone else. She didn't mention Germany, but German taxpayers, please step up to the plate. Your money is needed elsewhere. Or else—

- Common liabilities, such as Eurobonds, through which taxpayers in fiscally stronger countries, like Germany, would guarantee the debt of others.

- Elimination of trade imbalances by stimulating internal demand in countries with large trade surpluses. Alas, Germany’s economy lives and dies by its exports, and a drop in the surplus has a vicious effect on GDP. Read.... Germany’s Export Debacle.

Merkel and her government immediately rejected Lagarde’s demands on essentially all fronts. To commit more money to the ESM would also require a vote in the Bundestag where the last bailout increase passed only by a thin margin. And the US Congress is in no mood to hand over more money to the IMF. But as Paulson’s efforts have shown, extortion has a way of migrating. If recent history is any guide, Lagarde’s threat of another Great Depression will work, and money will start flowing from taxpayers to her anointed recipients.

Meanwhile, in one of the most above-board shining examples of a virtuous country in the Eurozone—the outright opposite of Greece—there has been a hiccup. Read.... Bribery, Kickbacks, and Money Laundering at the Austrian National Bank.

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battle axe's picture

When we were having problems 07-08, Lagarde could not of cared less, all she did was tell us to take care of our own problems so they would not hurt Europe. Well now it is time for her to take her own advice, you are on your own, no money from us baby.

NEOSERF's picture

The car salesmen have been in charge of finance, Congress and most of the rest of the world since WWII and we should all wonder how we got taken to the cleaners?

Alpha Monkey's picture
"The Art Of Extortion: Now At The IMF"

Uh... what the fuck did you think was the point of the IMF... oh, wait, now that it's extorting 1st world countries we care?  Where the fuck have you been while the IMF has been extorting and raping 3rd world countries?

flight77's picture

Here are the brand actual ESM numbers:

Country                                              Shares                         Money


Königreich Belgien                              243 397                    24 339 700 000

Bundesrepublik Deutschland              1900 248                   190 024 800 000

Republik Estland                                     13 020                   1 302 000 000

Republik Irland                                      111 454                  11 145 400 000

Hellenische Republik                             197 169                  19 716 900 000

Königreich Spanien                                833 259                 83 325 900 000

Französische Republik                        1 427 013                   142 701 300 000

Italienische Republik                          1 253 959                   125 395 900 000

Republik Zypern                                      13 734                    1 373 400 000

Großherzogtum Luxemburg                      17 528                      1 752 800 000

Republik Malta                                          5 117                       511 700 000

Königreich der Niederlande                400 190                     40 019 000 000

Republik Österreich                           194 838                      19 483 800 000

Portugiesische Republik                    175 644                        17 564 400 000

Republik Slowenien                             29 932                         2 993 200 000

Slowakische Republik                          57 680                         5 768 000 000

Republik Finnland                             125 818                         12 581 800 000

Gesamt                                          7 000 000                       700 000 000 000


847328_3527's picture

I read Hanky Panky cashed out his $600 million stock otpions when he became secretary.

What a wonderful life, Hank!

Zero Govt's picture

if Wank invested the $600m with his Brother he won't have much left in a few years

nah's picture

can the imf save the world


orangedrinkandchips's picture

It is as if they have their hand on a nuclear bomb.....ready to use it.



xela2200's picture

The gold reserves is the ultimate nuclear financial weapon. Once it gets deployed, only God can help all those countries lent us money.

LawsofPhysics's picture

I agree, life will go on.  Moreover she says "It is about avoiding a 1930s moment," Wake the fuck up sheeple, with 46 million on food stamps, this is a fucking 1930's moment.

We have tried throeing money at problems, how about we try something completely different, like prosecuting the fucking fraud for a change.  Restore trust and the rule of law, period.

maddogs's picture

Just like a Card game. Each round your in for a little more. Looking at your investment thinking...well I'll stay in for one more round, maybe I'll get that two cards I need towards a full house........eventually the players are hoping to fill an inside straight. And the house wins no matter what. Don't sit at the table. The dealer has the first name of a city... I've heard.

q99x2's picture

Throw the ponzsters into prison with the Madoff. Distribute the personal holdings of the ponzsters (might have to include a few elites too) to the citizens of each defrauded country. Open Source the Monetary System World-wide. Have each country's prime minister work out of the same, "It Takes a Village," office with multiple end game buttons such that if any single button were pressed a doomsday machine would come online. Hope for the best and live happily ever after. 

debtor of last resort's picture

Disneyland has become much too big. Even Mickey is leaving the scene.

falak pema's picture

First world inevitable meltdown and its never ending list of official clowns and behind the curtain Dons. 

The Dons run System D and WS, their new world capital is the City, one square mile belonging to the Queen, royal family, symbolic figurehead of NWO financial Oligarchy. Its all off-shore, their true unadulterated fiat and RE wealth, corporate and personal; the personal is estimated at 25T and the corporate is estimated at 35 T more. These figures are more symbolic than anything else as fiat wealth can disappear overnight as 1929 teaches us so vividly! They own the politicians who control the sheeple's nominal  wealth of 40 T first world pensions, alas, all hocked as collateral to ever increasing socialised national debts. 

This is the new framework of first world feudalism. Its now firmly enthroned as an international, closely linked network via photonic banking sleight of hand, that bows to official nation state rules; all the while smiling at these very nation states run by surrogates, all in charge of bankrupt and under-productive institutions,  in the current outsourced, international labour arbitrage, socio-industrial construct of last thirty years. That's now water under the bridge, dire reality, and the true model for first world's future is that either the Nation States bend to Oligarchy rule or they end up like Greece, as a non people controlled, vague political and cultural zone, policed state, surrogate slave nation.

That is the reset that the Oligarchy proposes to first world over-fed sheeple. Take it or leave it, but its going that way. And all future generations of politicians will cry "fait accompli" and bend to it. Its written in stone as sequel to Reaganomics and Thatcherism, the where and the when it all was expertly moulded in as current prevalent mind set, rule of new international elitism, with London Town as international hub. Welcome to the opening games of this NWO, the 2012 London Olympics; that are logical sequence to Beijing Olympics, which saw the demise of democratic USA during 2008 meltdown, and the resurgence of the Chinese arm of totalitarian and sectarian NWO, from Pacific to Atlantic. We are now truly one global world prison, where the rule of arbitrary will be our daily ration.

Ave Caesar, Morituri te salutant! 

falak pema's picture

...The legacy of the Council of Vienna in 1814 and Metternich, the re-establishment of the Old World Order after Napoleon's first demise. The Europe of Empires and surrogate serf nations, Enlightenment contained!

Fast forward 1971, the end of BW, the convulsive throws of Vietnam War, Protest movements, Pentagon Papers etc.

Kissinger at work, builder of NEW-Old world Order, to fetter together Old Europe and New USA, beyond USD hegemony and before ME Oil construct monopoly. The "international London hub", new Vienna, birth of City as land of free Euro Dollars, unfettered fractional reserve kingdom. Metternich thus revisited by his pupil, with the USSR as new "Boney-land". 

There, globalisation was put on its true path by its Top head shrink, Dr Strangelove promoted now to Metternich Jr, and it went from big to bigger... to 'Oligarchy inevitable', like the famous line in the Barefoot Contessa.... Hollywood always predicts DC's future trends! 


Judge Arrow's picture

F*** that frog in the mud.

Zero Govt's picture

"Now Christine Lagarde, managing director of the IMF, has stepped into the extortion racket herself.."

Why any surprise... she was hand-picked for her CV in France afterall.. her Govt books were such a shambles she had to extort money from long term public savings to fill the holes in her short term cash flow

A perfect sociopathic CV for an IMF Chief

Politics: robbing the productive to prop-up the parasites for Centuries

Element's picture

Remember all that brown-nosing she did before getting appointed the new DSK?

Time to earn it's wages from all the deals and promises it made.

If I remember correctly, "the wages of sin is death".

DavidPierre's picture


 A History of False Flag Attacks ... special emphasis on USS Liberty.


AnAnonymous's picture

Made me laugh.

The art of extortion now at the IMF?

When was it founded? Because it's been decades now the IMF is in the art of extortion.

But probably, the audience being mostly US citizens, the previous targets of IMF were not enough sexy to boost traffic as this article author means it.

IMF policies are another reveal by US citizens that they denied the crisis rather than ignore it.

The more it becomes obvious some US citizen nations were going to be subjected IMF policies, the more US citizens found IMF polices inhumane, the more they softened them.

So here we are:nations repaying in fiat money after large credit emissions.

To be compared with seize of national assets, monoactivity, export model forced on nations, eminent domain given to foreigners which led a number of South Eastern Asians to burn down their house with their family inside in the 1980s etc

As usual, nothing more than an article that wishes to pander to the mass of US citizens who want to believe US citizenism bad sides only started when they are hit by them, which means here now.

IMF has been inthe business of extortion for quite a period by now, and one has to admit the art has been diluted not to shock too much US citizens.

That is not the best of IMF we are offered right now.

DavidPierre's picture

"...nothing more than an article that wishes to pander to the mass of US citizens..."

Confessions of an Economic Hit Man

A book written by John Perkins and published in 2004. Perkins' account of his career with consulting firm Chas. T. Main in Boston. Before employment with the firm, he interviewed for a job with the National Security Agency (NSA). Perkins said this interview effectively constituted an independent screening which led to his subsequent hiring by a member of the firm (and NSA liaison) to become a self-described "economic hit man".


DeadFred's picture

'Or else' sounds good by me.

Oldyeller's picture

It really is amazing to watch these con artists at their work. It's like watching a play. A depression is in the cards sooner or later, that's a certainty, but let's use the situation to con more money for nothing, using comprimized polititions so we can redistribute the loot to our pals, lock ams and then march boldly over the cliff together. Life really is stranger than fiction!

Widowmaker's picture

Where's the money?

Zero Govt's picture


There it is

...all in a days work (slacking) for Blowjob Ben

Now sing-along: "I'm forever blowing bubbles, pretty bubbles in the air"

non_anon's picture

where o where is little boy kahn?

UP4Liberty's picture

Why The F**K do all these a**hats need all this money?  Did someone sneek into all the banks and steal all of it?  I mean, Jesus F**KING CH**T.  Stop forking over the ducats.  Let the s**tty / toxic assets liquidate LIKE ALL BAD DEBT IS SUPPOSED TO IN A FREE MARKET.  Re-set the system by repealing the legal tender laws, auditing and ending the F***ING FED, and we'll have the system corrected in about two years - tops.  This is not complicated.  EVERYONE HAS TO TAKE A HAIRCUT - GET IT?!

There...I feel better now...

CH1's picture

UP4L: You're correct, of course, but they don't care. All the free market talk was bullshit to keep you happy. They never meant any of it.

it is ALL about power. Always was.

Element's picture

It's not enough for them to merely 'win' everything, you also have to lose everything.

Silver Pullet's picture

That's right. It's not how much they have, it's how much more than you they have.

Kobe Beef's picture


The question is: are people adult enough to understand you cant keep swiping the national credit card for any/every utopian project conceivable? Has the Bread, Circus, Entitlement mentality become too deeply rooted in the advanced world? we shall soon see.

Stack Trace's picture

The Snapper-heads don't want to lose their snatch. Hookers hooking for another toke off the monetary pipe. Each fix moving the dial less and the high is lower than the previous. They tell us this week austerity will save us all and next week money printing and stimulus will. It is all a sick joke and now only truly apparent to those of us that pay any attention through the miracle of the "connecting tubes" in theInternet and the utterly obvious failure of globalization.

Perhaps this is on purpose...a manufactured crisis that requires the abrogation of national sovereignty in the name of a one world government. Maybe the new currency will be called Bernie-Bucks because by the time tie unfolds we will have 70quadrillion of them sloshing around in the accounts of the top 0.00001% (or perhaps Food Stamps will become the defacto currency...SNAP Bucks)

The Big Ching-aso's picture



Hermann zie German is gonna be pissed.


f16hoser's picture

Lagarde better put on the Knee-Pads, she's gonna have to suck a bowling ball thru a garden hose to pull this off! "Hey Christine, while you're down there......"



Coldfire's picture

How do you think she got to her current position?

straightershooter's picture

Can we count on German's stupidity to save the world, pondered by one French, acting as the savior of Greek.

Can we lean on French's stupidity to save the world, pondered by one Italian, acting as the savior of Greek.

Can we rely on America's stupidity to save the world, pondered by one British, acting as the savior of Greek.

Can we depend on the Euro's stupidity to save the world, pondered by one Greek, acting as the savior of Italy.

Can we DAS FUC world's stupidity to save the world, pondered by one German, acting as the savior of ECB.



TzaristBondHolder's picture

Why not?  Broke will create paper to lend to IMF so that IMF will lend the same paper pack to them at a larger rate

SillySalesmanQuestion's picture

Wow..the worlds first trillion dollar "blow job"... you go Christine girl..