This Is How The IMF Just Lost Its Last Shred Of Credibility

On Tuesday we brought you what will likely be the first of many calls for so-called “Helicopter money”, whose advocates suppose that the reason printing trillions in fiat currency has not yet brought about the desired effects in terms of stoking aggregate demand and promoting robust economic growth is that central banks have yet to go the nuclear route by simply mailing out free money to everyone. 

Here’s an excerpt from the Bloomberg View piece:

“Money isn’t a liability in the ordinary sense. Nothing is owed and nothing ever has to be paid back.”

As ridiculous as that sounds, it’s not exactly surprising in a debt-addicted world run by Keynesian central planners and indeed, it echoes recent calls by US lawmakers for the absolution of some $1.3 trillion in student debt.

Now, it appears the insanity has spread to the highest possible levels with none other than the IMF's deputy director of research suggesting that when governments are faced with too much debt, they should consider simply not worrying about it. 

In a new research paper, the IMF's research department says that as long as countries can fund themselves at a reasonable cost via capital markets, they should consider simply “living with high debt”:

While some countries face debt sustainability constraints that leave them little choice, others are in the more comfortable position of being able to fund themselves at reasonable—even exceptionally low—interest rates. For these countries, there is a very real question of whether to live with high debt while allowing the debt ratio to decline organically through growth, or to pay it down deliberately to reduce the burden of the debt…

Next, the Fund says that if there’s still room to borrow, paying down debt makes no sense:

If fiscal space remains ample, policies to deliberately pay down debt are normatively undesirable…

It only gets better when the suggestion is made that contrary to reality, paying down debt actually increases countries' debt burden:

Distorting your economy to deliberately pay down the debt only adds to the burden of the debt, rather than reducing it. 

But the real punchline comes when the team of economists moves to consider how heavily-indebted countries should respond to an exogenous debt shock:

With these preliminaries, we can turn to our question of interest: what happens if there is an exogenous increase in public debt?

It turns out that the optimal policy involves living with the debt forever.

The analytical framework implies that it is better to live with high debt than to pay it down.

Paging Greek PM Tsipras: may we suggest a new bargaining strategy in your negotiations with the IMF, because what we dubbed the Greek hell over the weekend, was really its heaven, at least according to the IMF.

Comments

[100pcDredge]

Yup... and there goes another last shred. This is how they previously lost one of their last shreds of credibilities by the way: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013... My guess would be that their canteens was plagued by Claviceps purpurea at that time. It must have been all over the place.

[Rusputin]

Yeah, we create the loan out of thin air, electronically, you keep paying the interest forever with actual effort.

I've just stated a modern definition of slavery.

[Raul44]

They forgot to include into calculation: "If all above is true and we neither have to pay nor worry about debt, why work at all?"

[MarcusAurelius]

A statement like that is not surprising. I mean what do you do when the debts are unpayable? 

What pisses people like me off is the fact that we need to support this philosophy by incurring debt. Except the debt matters for everyday people. However maybe I have it wrong. Maybe they don't evict you from your home when you stop paying your property taxes? I'll mention that to my municipality and see what they say? Oh ya....the overpaid teachers rely on that tax???? Hmmm....I guess not. 

Income tax. PST, GST, HST, union dues, licenses, land transfer tax, and a host of other supposed accounting matters that well, don't really matter. After all, I can just live with the debt now. 

Utterly moronic. 

[SmittyinLA]

The IMF is a bankers Assn, they get paid on debt commissions their job is to push debt PERIOD, they* have their own agenda and it's not your sovereignty or solvency.

[Radical Marijuana]

The patterns of previous comments, and votes upon those comments, demonstrates that most of the people who bother to post on Zero Hedge understand the basic problem regarding the IMF being an agent of the established DEBT SLAVERY SYSTEMS, recommending that those be continued indefinitely.

The most down-voted comments, so far, were those made by Marco, and I will begin my comment by referring to those: Macro is right in the short-term, while El Vaquero is right in the longer term. An interesting subject on Zero Hedge are attempts to speculate about when, during the middle-term, we may reach some relative tipping points? Of course, those points where things turn around and go the other direction will be different for different people ...

I realized that the monetary system was criminally insane several decades ago, because I had been taught about the ways the nature works were due to the conservation of energy, while "money" deliberately did not pay proper attention to that, but rather, "money" operated with extreme prejudice. The more I learned about that, the worse it got. I now maintain the view that money is measurement backed by murder, because the debt controls depend upon the death controls, while entities like the IMF are components of an overall system of triumphant organized crime that has been able to apply their methods to the political processes, in order to capture control of the powers of governments, thereby effectively privatizing those public powers.

Since the debt controls are ACTUALLY backed by the death controls, deferring the debts is ACTUALLY deferring the deaths. Macro is recommending that be continued in the short-term, while El Vaquero is pointing out what that will mean in the longer term. Both appear to be right, to me ... However, one of the things that has happened to me, as well as to many other people, is the degree to which we were STILL SURPRISED by exponential growth, despite having always had an abstract, intellectual, mathematically based understanding of the exponential growth function. Therefore, I believe that we are rushing faster than we currently comprehend towards the reaching the tipping or turning points, where the short-term benefits flip around to become the longer term costs.

In a sense, Marco is providing the same "practical" advice that

the IMF's research department says that as long as countries can fund themselves at a reasonable cost via capital markets, they should consider simply “living with high debt”

Indeed, it has become mathematically impossible to pay off such debts, as well as basically a theoretical impossibility in a MAD Money As Debt system, since, IF there were no more debts, THEN there would be no more money. However, in the "real" world, "money" made out of nothing as debts has been "paying" to strip-mine the planet's natural resources, in ways which were deliberately misrepresented.

In my view, almost everyone whose material is published on Zero Hedge continues to want to deliberately misunderstand the basic ways the human beings operate as entropic pumps of energy flows. Indeed, it was not an accident that the way that we understand the concept of entropy was inverted by having an arbitrary minus sign inserted into the entropy equations. Practically everyone takes for granted perceiving the world through false fundamental dichotomies, and therefore, promotes bogus "solutions" to problems which are based on impossible ideals, which are backwards, and so, continue to backfire badly.

THE PRODUCTION OF DESTRUCTION NECESSARILY CONTROLS PRODUCTION. However, instead of facing that fact and responding through unitary mechanisms that accept that fact regarding how energy systems really work, our society has created an elaborate superstructure of bullshit to bury that fact. Most of those who recognize that the banksters, which includes the IMF, are engaged in enforced frauds (which impose debt slavery upon people, which has driven its debt engines to generate numbers that have become debt insanities), want to recommend "solutions" which are solely based upon more proper production, without discussing the necessary roles of destruction in that context. However, actually, the only realistic solutions are to change the ways that the destruction is done. Indeed, that is what we are looking at happening when the short-term benefits from being able to enforce frauds go through some middle-term tipping points, when the longer term costs from having enforced frauds accumulate in ways which become bigger, as the overall socialized costs exceed the previously privatized profits.

"If history shows anything, it is that there’s no better way to justify relations founded on violence, to make such relations seem moral, than by reframing them in the language of debt — above all, because it immediately makes it seem that it’s the victim who’s doing something wrong."

-- David Graeber

Or, as A Lunatic pointed out in a Zero Hedge reply:

"... it's always the same; your money or your life. How civilized it is to have a monetary system that ultimately relies on death threats as collateral ..."

The biggest bullies' bullshit world view presents everything in ways which are as backwards as possible, which also manifests as being as absurd as possible. The ability to be socially successful by backing up lies with violence has resulted in our entire political economy becoming based upon ENFORCED FRAUDS, which is what the IMF participates in spreading around the world. Around that core of organized crime, there are layers of controlled opposition, that operate inside of the established systems, and therefore, stay within the same basic bullshit frame of reference, AND SO, AROUND AND AROUND WE GO, REPEATING THE PATTERNS IN THE SAME RUTS, such as NOT facing the basic facts that money is measurement backed by murder, because the debt controls NECESSARILY depend upon the death controls, because ALL production is controlled by the production of destruction, because everything operates as entropic pumps of energy flows, (wherein the almost total triumph of the biggest gangsters, the banksters, has resulted in almost everyone perceiving everything regarding that in the most backward and absurd ways possible.)

Human beings necessarily live as organized systems of lies operating robberies. Those who were the best at doing that became the international bankers, who are at the top of the social pyramid systems based upon being able to back up legalized lies, with legalized violence, which systems constantly become more psychotic because that violence still never stops those lies from being false, while yet, civilization continues to have its actual behavior controlled by those huge lies. Hence, the "corrections" which are coming to the ways that deferring debts has also deferred deaths, are that the runaway debt insanities are going to provoke death insanities. The ONLY genuinely better resolutions to those problems would be to develop better death control systems. Of course, the difficulties with respect to doing that are why we are building up an enormous potential for unprecedented levels of debt insanities, to provoke unprecedented levels of death insanities.

From my point of view, the banksters, through institutions like the IMF never had any shreds of credibility to begin with. As soon as I learned about their monetary system, I recognized that it was runaway criminal insanity: promoting endless exponential growth, while backing that up with the threat of weapons of mass destruction. However, at the same time, I do not regard any of the controlled opposition groups as having any shreds of credibility either. From my point of view, unless someone faces the basic facts that money is measurement backed by murder, and therefore, proposes what sort of alternative death controls will back up any alternative debt controls, then they are NOT promoting any realistic resolutions of the real problems. By and large, that includes practically all of the content published on Zero Hedge, and even more so the content in the mass media regarding economic issues.

The currently established social systems are necessarily based upon being able to back up lies with violence, or enforce frauds. Those systems necessarily also have developed in ways which deliberately ignore and deny that they are ACTUALLY DOING THAT as much as possible. Similarly, the controlled opposition groups to those established systems are also doing similar things, when they promote their "bogus" solutions, based on the same old-fashioned false fundamental dichotomies, and the related impossible ideals.

What is ACTUALLY happening within a society based on accumulating debts, to the points where those are mathematically impossible to repay, and therefore, that society can only keep on "kicking that can down the road," is that those deferred debts are backed up by deferred deaths. When we switch over from the short-term benefits from having done that, to the longer term costs finally becoming predominant, there will probably be provoked mass murders in the form of runaway death insanities, because those debt controls were always ACTUALLY backed by the death controls, in ways which were ALWAYS being deliberately ignored and denied.

It is NOT possible for human beings to change the basic ways that they live as entropic pumps of energy flows, however, it is theoretically possible that they could change the ways that they deliberately misunderstand that, such as how the meaning of entropy was inverted, in order that would continue to be consistent with the biggest bullies' bullshit world views, which views inverted pretty well everything else, with false fundamental dichotomies, that somehow governments were not the biggest forms of organized crime, controlled by the best organized gangs of criminals, which currently happen to be the international bankers, operating through institutions like the IMF.

In this thread of comments, Macro pointed out the short-term benefits obtained from operating the established systems, while El Vaquero pointed out the longer term costs from doing so. I thought that both were correct, from their own perspective. HOWEVER, from my point of view, practically nobody fully understands the degree to which a political economy with institutions like the IMF amounts to runaway criminal insanities, where practically all of the publicly significant opposition is just as criminally insane.

Many of the comments posted above described, in their own ways, the basic problems that creating "money" out of nothing as debts violates the basic laws of nature, and therefore, is actually based upon enforcing frauds, which automatically drives the civilization doing that to become more psychotically insane, the more that happens. However, most then promote various idealized "solutions" that would stop human civilizations from operating as entropic pumps of energy flows, which necessarily follow the principles and methods of organized crime, including that those promote the maximum possible bullshit about themselves, and control their apparent "opposition" to tacitly agree to stay within that absurd and backward bullshit frame of reference.

The monetary system should be based upon an energy standard, (which includes all of the previous notions regarding the standards based upon the special case of the conservation of matter, such as exemplified by the gold and/or silver standards, etc..) Such an energy standard for the human accounting systems could then be rationally reconciled with the ways that energy ACTULALLY flows through industrial and natural systems. However, in order to do that, enough people would have to understand how and why we ACTUALLY ended up with a monetary system based upon enforcing frauds, whereby the debt controls were backed by the death controls, and those became the most socially successful by being done through the maximum possible frauds and deceits.

There continues to be nothing else which is theoretically possible than for realistic resolutions of our real problems to become based on series of intellectual scientific revolutions, that enable political science to go through sufficiently profound paradigm shifts in order to cope with the already achieved paradigm shifts in physical science. The EXISTING systems have become globalized electronic monkey money frauds, backed by the threat of force from apes with atomic bombs. It is within that context that we have the research paper from the IMF recommending that people learn to live within the runaway insanities of their social situation as debt slaves, drowning in unrepayable debts.

The origin of the word "addiction" referred to people who went so deep into debt that they became slaves. Several comments above also pointed that out, as being the nature of the political problems we face, due to the existence of organizations like the IMF. Overall the National Central Banks are the Kings of Fraud, why the Bank of International Settlements is the King of Kings of Fraud, while the IMF is another one of the significant members of that overall Globalized Court of Fraud. However, those few who recognize those social facts still tend to not understand more fully how and why that developed to become the ACTUAL FACTS ... Meanwhile, of course, the vast majority of people have been so totally brainwashed to believe in the banksters' bullshit, that they do not have a clue about any of that, and moreover, have been conditioned to not want to know. The established systems of backing up lies with violence have made most people become so ignorant and afraid that they are afraid to become less ignorant.

The degree to which the banksters' bullshit dominates the ways that almost everyone thinks and communicates with each other makes discussing what the IMF does extremely problematic! On the one hand, there EXIST electronic frauds, backed by atomic bombs, while, on the other hand, the way human beings operate as energy systems is so deeply buried under absurdly backward bullshit, due to the triumphs of the biggest bullies, the banksters, being able to get away with enforcing frauds, as the foundation of the EXISTING political economy, that there is a vast and growing Grand Canyon Chasm between progress in physical science, versus no similar progress in political science.

In that context, the IMF can only make recommendations that countries which are controlled to use their public powers to enforce frauds by private banks should continue to do so, and accept that as their situation. At the same time, those who indulge themselves in feeling good about their favourite sorts of old-fashioned religions and ideologies can only make recommendations for bogus "solutions" that are based upon impossible ideals, that will continue to actually cause the opposite to happen in the real world, because those old-fashioned religions and ideologies actually developed as controlled opposition groups, that stay within the biggest bullies' frame of reference.

To more fully face the facts requires recognizing that the debt controls are necessarily backed up by the death controls, and therefore, no solutions can exist which do not change both aspects of those combined money/murder systems together. Of course, the ways that most probably will happen is that the can will continue to be kicked down the road, as much as possible, for as long as possible, deferring the debts, while that also defers the deaths, until that is no longer possible to do, at which point the runaways debt insanities will provoke death insanities ... Unfortunately, those now appear to be the only realistically possible social situations in which it might be possible to develop different death controls systems, to back up different debt control systems, while there is not much reasonable hope that those would actually become better, rather than even worse ... But nevertheless, I continue to promote the overall recommendations for intellectual scientific revolutions to be developed that apply to political science in general, and to the combined money/murder systems in particular.

[hedgiex]

Yes. The new morality. Debt cuffs for the preys but not for the Predators. Upto the retards/preys to resign to this framework> not even suggesting pitchforks or even street marches, just do not play.

In the tottering financial infrastructure, you just need 10% absconding on debt and/or not buying the drugs (financial products) out there to bring it down.

Whatever these frauds are preaching, they cannot go against the Law that Commerce/Banking is based on Trust.

[GoldSilverBitcoinBug]

It turns out that the optimal policy involves living with the debt forever.

It turns out that the optimal policy involves living with the fact of being a slave forever.

FTFY.

[Tarshatha]

Every time I look at that thing, LaGarde, I know that Icke is right, there are lizards living amongst us.