Because Central Banks Just Aren't Enough: G-20 Will Ask IMF To Print Reserve Currency

Tyler Durden's picture

Four months ago we predicted that in response to the latest round of global economic deterioration, every central bank would very soon join the toner party. Since then we have seen the Fed commence Operation Twist and telegraph another episode of MBS asset purchases; a new QE episode at the Bank of England; a new round of covered bond purchases at the ECB, coupled with an interest rate cut by its latest Goldman Sachs-based president, not to mention the persistent attempts to generate a backstop central bank in the form the EFSF Frankenstein Swiss Army knife; a new round of asset purchases and a massive, several hundred billion snap FX intervention by the Bank of Japan; and last but not least, that stalwart of stability, the Swiss National Bank, went ahead and destroyed the Swiss Franc as the sanest among the fiats by pegging it to that most unstable of currencies, the Euro. In light of the above how gold is not trading north of $2000 is still beyond us, although whether by manipulation or market inefficiency, we can not complain: it is easier to buy gold at $1,750 than at $7,150. Yet not even we could possibly predict just how far the global ponzi cartel would fall to extend the status quo by a few extra months. Because according to Dow Jones, the latest and greatest purchaser of Heidelberg Mainstream 80 machines will be the, drum roll, the IMF! Yes, the same organization that DSK swore would never join the global central banking stupidity, since deposed with a false allegation, and now headed by the woman who brought France to the brink of ruin, will be the marginal printer, now that everyone else is "dodecatuple all in" and sitting all day on the Turbo Print button.

From Dow Jones:

World leaders may mandate the International Monetary Policy to print more of its special currency to help solve the euro zone crisis, according to several people familiar with the matter.


Asking the IMF to print more of its Special Drawing Rights, essentially an IOU that countries can exchange for cash, is one of the ways the Group of 20 industrialized and developing countries is considering supplementing European efforts to stem a debt crisis threatening to spark a global financial meltdown and another recession.


G-20 leaders are pressing euro zone leaders to deliver a detailed and credible plan to leverage their own bailout fund, boost bank capital buffers and restructure ailing economies. Political disarray in Greece and the inability of euro-zone officials to so far agree on exactly how they plan to build a firewall to prevent contagion is fueling talks on alternative emergency measures.


If Europe is able to agree on a credible strategy that can assure its colleagues in the G-20, then the group would be willing to consider the SDR allocation and other financing options to bolster European action, the officials said.


The ECB itself has said the scope of its own rescue efforts through a bond buying program would be limited both in time and volume. But under the idea currently being considered by officials, the IMF would be the lender of last resort.

How much are we talking here? Oh enough.

Two people familiar with the matter said the SDR issue could total $250 billion. One option under discussion is to use some of that money to beef up the European Financial Stability Facility, the euro zone's bailout fund.

Obviously, the SDR does not exist as an actual currency in circulation, and would merely be another "confidence symbol" in a fiat system in which ever fewer have any confidence. Yet there is no such thing as a free "confidence symbol" - someone always has to pay. Who you may ask? Well, if you are sitting at a table, and nobody else is paying... the answer is obvious.

IMF member country Quota: millions of SDRs Quota: percentage of total Governor Alternative Governor Votes: number Votes: percentage of total
 United States 42,122.4 17.72 Timothy Geithner Ben Bernanke 421,964 16.77
 Japan 15,628.5 6.57 Yoshihiko Noda Masaaki Shirakawa 157,025 6.24
 Germany 14,565.5 6.13 Jens Weidmann Wolfgang Schäuble 146,395 5.82
 United Kingdom 10,738.5 4.52 George Osborne Sir Mervyn King 108,125 4.30
 France 10,738.5 4.52 François Baroin Christian Noyer 108,125 4.30

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sequitur's picture

I know some don't like cursing. But you know what? Mother fucking sick and tired of this shit. These assholes will rob, rob, rob from the poor and middle class until they are inflated out of their life savings.

Fuck Bernake. Fuck Geithner, and then fuck Geithner again. Fuck Trichet, Drahgi, Van Rompoy, Barraso, and all the rest of these EU mother fuckers, they are as bad as the United States, and that is bad. Fuck them all.

akak's picture

If Dante Alighieri were alive today and writing his Divine Comedy (although I would suggest a retitling, to The Diabolical Tragedy), he would have to invent several new and deeper circles of Hell to house these malicious, malevolent, sociopathic monsters.

TruthInSunshine's picture

Fiat toilet paper/digital binary streams, to infinity and beyond!

Buckle up, buttercups, because the EU has only two options at this point (and I say that HOPING someone can prove me wrong when making the following assertion, which I've been asserting for at least 3 months):

The EU can either:

1)     Wind up the EU, essentially declaring it a failed project, given the massive cultural and economic disparities between its very disparate members, and initiate an orderly shutting down of the ECB, allowing most or all of the former EU member states to return to their former currencies (with maybe a core block of SOLVENT EU countries remaining, such as Germany, Belgium, etc.);


2)     Have the ECB, directly and indirectly, print an amount of EUR so large that it will make The Bernank look like an amateur, as that's the only way to service the interest payments, let alone satisfy (nominally) the amount of sovereign debt EU members now owe, without technically defaulting, while also allowing EU private, quasi-private and nationalized banks to be recapitalized.

Choice 1 above means pain, but is the far better option, as it will allow for a cure for the underlying disease, and the reinitiation of organic, sustainable economic growth in Europe once again, whether 4 years or 7 years from now, once the smoke clears.

Choice 2 above means pain, as prices of everything needed to live absolutely skyrocket for Europeans, including those who live in nations that have been relatively responsible, such as Germany (common currencies loss of purchasing power will not discriminate).

I'd love to hear a third option, that doesn't involve some type of intra-European or global war.

The Big Ching-aso's picture

Ugh, don't our investments over there get screwed too if the EUR goes to zero like?

TruthInSunshine's picture


U.S. banks, and the too-big-to-fails (aka owners of our politicians) will get monkeyhammered in either event.  But the U.S. average investor and taxpayer is worse off if option 1 is implemented, IMO, and by a wide margin.

I forgot to add this:

We're about to find out how sedated and sheeple-ized Germans have become, or whether they are still capable of rejecting insanity, and re-declaring their sovereign right to be free of the external costs, that will inevitably sink their standards of living, economy and put massive amounts of debt on many generations of their children, all in what will be a failed, kick-the-can exercise at any rate, as the same process will have to be repeated given that PIIGS+France won't reform their ways if option number 2 above is implemented.

TheFourthStooge-ing's picture

Don't worry, everything will be fine. CERN is harnessing the power of the Large Hadron Collider to genetically engineer flying unicorns that eat fiat currency and shit solid gold nuggets. Everyone on the planet will be RICH RICH RICH!!!1!11!!


BigDuke6's picture

bernanke and the Jewish banking cartel can call the new currency
Confetti Dollars

New World Chaos's picture

or Beast Obedience Credits, because that's what this new IMF currency will actually be.  This is definitely where it's going because the plan was recently endorsed by the Vatican.

Island_Dweller's picture

I'd love to hear a third option, that doesn't involve some type of intra-European or global war.


All countries can buy CDS on themselves (and everyone else too) and then when everything goes to shit we'll all be rich!  yippee!

kkam's picture

I agree with your sentiments, but I think there is a third, obvious alternative: All the countries need to live within their means. Simple common sense that is applied to an individual and family budget ought to be enforced at a national level too. But I know what the response to this suggestion will be: The politicos and the citizens will not / cannot face the pain that this 'living within means' entails, so therefore the slow motion train wreck will continue until everything blows up.

Belarusian Bull's picture

Would a family be living within it's means if it could just print money out of thin air? I highly doubt it. Fiat does not work. Central planning does not work. And will never work.

Confused's picture

Individual families living within their means would mean that our masters won't get a larger slice of pie. 


Are you a terrorist? 



oldman's picture


is that there are many possible responses, but no solutions.

#3  do nothing as has the us and japan and just go on living out your life with a few more days of rain

#4 do something like turn back the clock and say no to 'more'---become a minimalist/conservationist society

#5(silly) strap yourself to a windmill and each day as it turns the world changes before your very eyes giving you a new look at every turn

#991 love each and every minute of your life like there is no tomorrow

Hey Truth----this is not that serious and you are a much lighter dude than this---I trust you are OK with me playing a bit     om

FEDbuster's picture

The red pill perspective can be a real downer sometimes.  I look around me wondering "Do these people even know what is coming?".  Yet as the can continues to be kicked with massive money printing, bailouts, bankruptcies, etc....  The majority of people talk about X Factor, the latest celebrity divorce or other crap tweeted stories of the day.  The stock market goes up a little or down a little, unemployment stays steady, food stamp usage continues upward, cities file for bankruptcy, and retailers hope for good holiday sales......   The "Matrix" continues to deceive the majority of people into thinking that everything will work itself out.


Hedgetard55's picture

Default, or print, which is default by another name. Same choice we have here in the US since we will not be able to repay the debt. One option hurts the banksters directly, the other spreads the cost over everyone that owns dollars.

Gief Gold Plox's picture

Not too long ago I decided that after all was said and done they would eventually have to print and have placed my bets accordingly. For some reason I expect them to print and print massively come January 2012.

Hedgetard55's picture

Try the Serego Alighieri, Amarone "Vigna Armaron" someday, it is made by Dante's ancestors (well, they own the vineyard, Masi makes the wine for them).

tmosley's picture

Turtleheading in Satan's asshole.

Bruin4's picture

And Dante would have his hands full at that !

The Big Ching-aso's picture

Look, I can tell you're kinda upset.   But think of it this way.     They truly believe fiat is unarguably inherently useful in that no matter what its ultimate perceived value at any given moment by anyone or anything you can at least always wipe your ass with it.     Try that with gold.   

I mean they do have a fecally valid point there ya know.  



lasvegaspersona's picture


How would you say that if you DID like cursing? I'm all (red) ears..

oldman's picture


It is true what you say.

But, maybe that is what we 'poor and middle class' are here for------to feed the 1%.

I don't have any idea of how much they will get out of you, but I'm not much of a prize; I don't have a thing to lose, anyway. The plan has always been as you suggest---this is the reason the system works so well for some; they make the rules and have the money and power. If you are not OK with this, then I will give you the same advice I was given so freely: 'Love it or leave it". I left, but I may return to live out the rest of my life here just to see how much shit americans can eat.

You are a sharcropper here, my friend, but I only rose to the rank of serf from the lowly slave form I began life with, so I look up to my betters, like yourself and do not believe that a person of your status should use such language in public. You are middle class, no? or maybe you have a college degree? 

My suggestion is that we take a couple of weeks vacation or sick leave--------------------oh, I forgot---credit cards, house payments, car loans, health insurance, retirement plans-----no, my dream non-violent revolution will not work here--we like what we have too much to sacrifice it for freedom

I'm stuck now, I thought I had a way out of this, but we are too wealthy for revolution----wrong country, I suppose

Well, pay no attention to this comment---just an oldman's nonsense                      om


Buck Johnson's picture

This is truly diabolical it truly is.  This might have been the plan all along, they can't or won't fund it themselves because essentially much of their banks are broke or insolvent along with the countries.  They are trying to find a way for the US to bail them out without the US bailing them out and being caught doing it. 

Michael's picture

If I could create a system that could systemically siphon off 80% of the worlds wealth for myself and maintain it that way, I would have an Global Central Banking Cartel like structure.

Michael's picture

Is the Congress of the USA actually on board with voting on and appropriating the the money for this deal?

Who are the congress critters who will vote yes to fund this scam to steel even more of the peoples money? I want names.

Michael's picture

You've got to give it to G. Papandreou for looks. He's the best looking character in the bunch at the G-20 in kick the Cannes.

He almost looks like Jean-Luc Picard.

Michael's picture

CNBC World should go down this year 2011 as the Pulitzer Prizer Winner in reporting geo political world events Reasonably.

Steve Sedgwik is the man. 

Eurodollar's picture

We voted in the clowns who gave the financial lobby all the power. We cheered when the banks fed us cheap loans to buy one more thing we really didn't need. We were joyful when politicans built social webs for us that were built on nothing but naive dreams.

Democracy is pathetic when people are suffering from narrow framing  as well as an overdose of complacency. Fat and happy, yeap, thats us. We will sit back and enjoy the ride until we don't enjoy it any more. What is happening now is our reward. It is a democratic consequence.

If we all are to get a change to the said abuse of the 1% we need to utilize all the good aspects in democracy. Grassroot movements (herballife style), well defined goals, well defined regulatory ideas, structure and morale. We also need to find some nice poster boys and girls for selling these ideas to the mainstream. I suspect such a task will be tough, after all it is more comfortable sitting at home pumping the apple laptop for porn, chatting on skype and watching the latest tv-series on our 50" screen. Gaining freedom never was comfortable and I doubt we as a people have the courage to even try to change the world. EVEN IF we would get this far, convincing the mainstream about the tightening of the belt vs the financial lobby candidates with 100s of millions in campaign budgets promising you greener grass will be a hard sell, if not an impossible one.

Tough times require tough people. Invest well and good luck!

LongBalls's picture

Take note ZH'ers. I am not the LongBalls short brains. No offense. :)

prains's picture

Damn I was hoping that avatar was gone. So offside LB and who was the fartacus holding the nikon

akak's picture

Well, a supranational fiat backstop to a whole host of failing fiat currencies --- yeah, THAT will fix everything!

Amish Hacker's picture

This is the rubber glove solution to the leaky fountain pen.

TheFourthStooge-ing's picture

Why, of course! They should have employed this brilliant solution from the very beginning. It's all so clear to me now. Printing these magic papers will solve all of the world's problems and bring to humanity a new era of peace, liberty, honesty, integrity, and vigorous perpetual economic growth. There is absolutely no chance that anything could possibly go wrong.


James T. Kirk's picture

Akak - I think you meant to say a SUPERNATURAL backstop to a whole host of failing fiat currencies. One of these days, when paper fails because no nation has any credibility left, a UFO or something will land in Central Park and "rescue" us all by bringing a supernatural fiat currency backstop from beyond the realms of earth. No one will be able to buy or sell without it. Now THAT is the real endgame. Pure, undiluted delusion yolked to pure greed. I predict extreme economic prosperity for 3 1/2 years after that. Of course, be very careful when you start shorting hell. Longer term bullish asbestos.

zhandax's picture

Jim, something like that had occurred to me as well, but then there is that 'will arrive peacefully and prosperously' bit and the whole 'whore of Babylon' being cast down. I am thinking that UFO showing up and forcing a debt jubilee fits the scene a bit more closely than more of the same fiat shit.

Slewburger's picture

akak you forget the failing currencies are the basis for the basket.

 The IMF is taking the whole world on a picnic and they're serving shit sandwiches without the bread.

TheFourthStooge-ing's picture

...and charging a rental fee for the picnic basket.


Cole Younger's picture

It is only going to get worse. One of these days the markets are going to wake up and realize that all there so called profit is denominated in worthless fiat currencies not worth the paper it was printed on.

TheFourthStooge-ing's picture

They wouldn't be worthless if they were printed on soft, absorbent, two-ply paper.


cowdiddly's picture

Show me a roll of CHarmin and an American Dollar. Which one to chose.....Hmmmm. That was easy. next

Great idea, all future curency printed on2 ply cushiony soft from here on out. At least is would have some residual salvage value. 

FEDbuster's picture

When there is nothing to eat, there isn't much demand for toilet paper.  Get some storage food now while it is available and relatively cheap.

Cult_of_Reason's picture

Now, US taxpayers, largest contributors to the IMF, are forced (by the elites) to bailout Europeans (ungrateful lazy creatures with condescending attitudes toward the US).

YesWeKahn's picture

When the US delegation is headed by TimG and BenB, what else can happen. All they know is to print.

Do you think that they are smart enough to have better ideas?

zhandax's picture

For Timmay and Banana Ben, there ARE no better ideas, because actually doing something to fix it will mean they no longer have jobs at minimum, and more likely means they have contracts on their lives.  There is simply no way of fixing this mess without bankrupting all the bigs (big banks, big corporations, big government).  Main Street would recover within a couple of years and be better off.  However, they and all their friends would be ruined, and that, to their minds, is the end of the world.

DeltaDawn's picture

I will translate for you what the Chinese are saying, "Now, we are forced to hold the debts of the US (ungrateful lazy creatures with condescending attitudes)."

Cult_of_Reason's picture

I don’t give a fuck about what your opinionated Chinese say -- take their demagoguery and shove it up your ass.

The facts remain the facts (no matter what your opinionated Chinese say):

1. Europeans are ungrateful, arrogant, and lazy pigs (PIIGS).

2. Nobody is forcing China to buy UST (the most liquid and safe investment that pays interest) – Chinese are free to sell UST and to buy EFSF bonds whenever they want (but they are not stupid to do it).

3. China needs US more than US needs China – Chinese need US markets to sell their "Made in China" junk and to steal US intellectual property and technology.

4. Etc.

the tower's picture

The fact that you write comments on this site means that you are not one of the 1%. Being one of the 99% means that you are being fucked in the ass, so I would suggest coming off your American high horse and start dealing with reality. YOU are being fucked as a citizen of this planet no matter what country you live in...

And please don't even come up with arguments like "Europeans are lazy". Americans are the fattest most entitled low-productivity people on the planet, that is an ACTUAL fact. If you want to stop China from "stealing US intellectual property" I would suggest stopping all entitlements and putting your lazy fat countrymen to work to produce iPhones. 

The only one boohooing will be the 1% at Apple who see their profits vanish, but your beloved USA will be a healthy, prosperous country.


Your choice. 1%, or 99%. Which side are you on.