The IMF Proudly Presents.... "Threat To The International Monetary System" Part Three

Tyler Durden's picture

It's that time again when the IMF has just telegraphed something very big and very bad is about to happen. But let's back up, and paraphrase our post from March: "Back in April 2010, before Waddell and Reed sold a few shares of ES, effectively destroying the market on news that Europe was insolvent, we made the following observation: "The IMF has just announced that it is expanding its New Arrangement to Borrow (NAB) multilateral facility from its existing $50 billion by a whopping $500 billion (SDR333.5 billion), to $550 billion." Little did we know that our conclusion "something big must be coming" would prove spot on just a month later after Greece, then Ireland, then Portgual, and soon Spain, Italy, Belgium, and pretty much all other European countries would topple like dominoes tethered together by a flawed monetary regime. Well, based on news from Dow Jones we can now safely predict the following: "something bigger must be coming." The specific reason for this prediction was the following: "the International Monetary Fund is expected to soon activate a special funding pool that will boost the fund's ability to prevent or resolve economic crises." Sure enough something bigger came, and then some: Greece received its second bailout package about 4 months later, only to see the entire Eurozone hang by a thread following the political fallout that has since ensued. Well, it is time to shift from the comparative to the superlative: "something biggest must be coming."

According to Dow Jones the "International Monetary Fund will likely re-activate a $580 billion resource pool in coming weeks to ensure it has funds to help cover Europe's worsening sovereign-debt crisis, according to several people close to the matter." Why is this a big flashing red light? "According to the IMF, the pool of supplementary resources are only to be activated when "needed to forestall or cope with a threat to the international monetary system." So it is settled: just like on the previous two occasions, the biggest load of feces yet is about to hit the fan. The only real question is: how many trillions will the real global backstopper, China, be forced to match this massive expansion of the former world rescuer with... Also, what comes after "biggest"?

From Dow Jones:

The IMF activated the so-called New Arrangements to Borrow in April of this year for a six-month period. The IMF's board, which met informally on the issue late Friday afternoon, would have to approve re-activation of the resource pool if the fund wants to tap it beyond September.


"A large majority of the board members are in favor of re-activating the NAB," as a precautionary measure, one of the people said. The board is scheduled to formally approve activation next Friday, the person said.


David Lipton, first deputy managing director at the IMF, said recently in a private meeting that keeping the NAB available may be necessary in coming months given Europe's debt meltdown, people familiar with the matter said. The crisis is entering a dangerous new phase as the risk of Greece defaulting rises and Italy and Spain's sovereign debt has come under attack.


Lipton didn't specify whether the facility needed to be tapped for a specific country, the people said. The IMF declined to comment.


According to the IMF, the pool of supplementary resources are only to be activated when "needed to forestall or cope with a threat to the international monetary system." The pool can only be activated by the board after IMF managing director makes a special request.

And while America is guaranteed to foot the bill once again (with China below the US in terms of priority payments despite its much higher cost basis and implicit investment into Europe), it will do so only on a provisional basis - none of the biggest IMF contributors have enacted the formal quota increase. Which means that the US will be stuck in legal limbo when Europe pulls a Greece, collects American cash, and then finds it has no collateral to pay back with.

So far, the IMF has already allocated nearly $7 billion from the NAB. In total, the NAB can provide up to about $580 billion in supplemental resources to the IMF, but only around $331 billion is currently available for use. Based on how much cash the fund can commit to within the next year--around $394 billion--without the special kitty, the IMF would only have around $60 billion on hand.

The special resource base, funded through bilateral loans from countries such as the U.S. and China, was designed as a temporary measure. It is expected to be largely replaced by an agreement late last year by the fund's board of directors to increase quotas, the share of contributions that each member must give to fund IMF lending.

The board of governors agreed in December to roughly double quotas from around $375 billion to around $750 billion. But out of the 187 member countries, only 17 have legally accepted the increase, including Japan, the U.K. and Korea. Most of the countries with the biggest quotas, such as the U.S., China and Germany, haven't yet gone through the legal process, such as parliamentary or congressional approval, need to hand over their promised dues.

There is little we can add here that was not said during one of the two prior massive IMF intervention attepts, both of which predicted a huge global shake up within months.

Which is why we will end this post with the same words we ended the previous iteration in the IMF global rescue series:

"US taxpayers: our condolences."

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Nolsgrad's picture

this is getting rediculous. just let the euro fail already

LouisHill's picture

Interesting how it comes so quickly after the US debt ceiling was raised.


phyuckyiu's picture

So the burn rate of the IMF is almost 2/3 of a trillion yearly. And this is just one small franchise of the Rothschild empire. Wow.

Ahmeexnal's picture

"It's huuuuuuuge man!"

Tiny Elvis

Crisismode's picture

The Proper Instructions:



Bend over

Let  your lips touch your bottom


And Kiss  Your Sweet Ass Goodbye.


Thanks So Much!


Fish Gone Bad's picture

Also, what comes after "biggest"?

As a person who is funny all time (that would be me), I would say that that would be "biggerest".  You can probably also use even biggest, or bigger biggest.  Please feel free to use it when needed.


Larry Darrell's picture

bring on the most-est biggest-est or go home.

Michael's picture

The international monetary system brought to us by the ruling oligarchy really really sucks.

I just thank God the current threat to their really really sucky system is going to completely destroy it.

We must not let the Rothschild's monetary system destroy us all in the process.

We must never let a monetary system like theirs develop ever again.  

spiral_eyes's picture

Next step: Geithner tells Obama that unless BerkshireHathaway-BankofAmerica receive a no-haircut bailout then Satan will rise from the earth and consume Washington D.C.

gmrpeabody's picture

Why can't I shake this feeling that somebody is staring at my IRA.

nevadan's picture

Not to worry,  you'll have plenty of US treasuries to hold in exchange.

New_Meat's picture

teresa is not only staring, she's drooling.

- Ned

Pure Evil's picture

Just $500 billion? That's probably just enough to get the bugger currently in the WH re-elected.

But, just to be safe, better make it $1 trillion, so there's enough left over to pay off the union thugs, black panthers gangsters, TSA goons, and Xe mercenaries.

Michael's picture

The economic science experiment since the days of Ross Perot, and has predicted the outcome with pinpoint accuracy to the current time.

I have tranquility in foreseeing this day come to fruition in my life after studying and researching this issue over the past 35 years.

It's almost as if I have already won.

Crime of the Century's picture

One hasn't truly won until one stops replying to themself.

gmrpeabody's picture

Thanks Crime..., somebody had to say it.

Blankman's picture

When and if this thing does truly collapse.  You will not be the winner.  I read your posts and you have some interesting viewpoint,s albiet slightly sophomoric in some areas, they are still your viewpoints.  You feel that the internet is your savior in this lovely world of ours.  Yet I am still not sure that you understand that every tick you write on you texts, tweets or ZH posts get funneled into a DHS, CIA, FBI database should you use trigger words - and you have.  When and if this thing does truly collapse the only people who wil benefit are the same people you loathe this very moment.  That's it, plain and simple.  So unless you are an ultra rich business man who gives millions in donations a year to your favorite politicians... you will lose.  

unununium's picture

You would have made a fine complicit governor in occupied France.

Blankman's picture

Did you ever ask yourself "Then what?"  All of you who threaten with lets bring it all down but do nothing about it are just as bad as the people who created the mess.  Do tell of your personal experience in trying to slay the evil dragon.  I released over a million in real estate, over 100k in credit cards in a futile attempt to help squash the system.  Since then I have learned we are all on the same path, whether we like it or not.  Stop crying poor and get your ass out there and make some money.  You nor I can destroy this beast.  Only the people at the top can truly destroy it... and they won't. 

Henry Chinaski's picture

The banking system is confusing when monetary systems do not have zero-sum characteristics.

Thomas's picture

Seems to me that the root word ought to be "bugger".

IQ 145's picture

Bigger and better buggering with the new biggest buggerer. Without butter.

i-dog's picture

Biggester ... followed by biggestest ... followed by biggestester...... until either the US explodes or the jackals in DC are sent packing back to Rome.

TPTB will do whatever it takes to keep the EU and Euro afloat until after Janet Napoletano (otherwise known as 'Shrek in a different shade of green') has us all safely tucked away in Camp FEMA.

Seapost's picture

Phatest. get with the new hip lingo already.

Oracle of Kypseli's picture

Her new nickname is "Janet Incompitano"

SofaPapa's picture

"This package goes to 11..."  Nigel Tufnel, Spinal Tap

earnulf's picture

Does biggerest come near "buggerest" in the New Standard Recently Revised and Terminally Re-Edited Somewhat English Language Dictionary?    Somehow I don't like how this sounds.....

disabledvet's picture

that's the World Bank. You're confused. The IMF is owned by "you and me." Which for some reason is different from a "World Bank" which indeed was owned by the Rothschild empire. But then Defense Secretary McNamara took over...

disabledvet's picture

which raises the question "is this a bailout fund for the USA." you can't repeal the business cycle--and that includes a cyclical downturn from disastrous fiscal policies. My guess is they're trying to keep one large Western financial insitution from collapsing even though all the others will. Wouldn't surprise me if that one was JPMorgan/Chase as HSBC "Colonel clinked" them with a few thousand ounces of gold which is all that's worth anything in that bank. as opposed to HSBC which has tons of gold via GLD. with silver about to "normalize" it relationship with gold (40 to one sound about right) that would put the price of silver at 50 bucks an ounce--which could go much higher should nations realize that there simply is no more gold to be bought at any price of any size and therefore start pouring into silver.

knukles's picture

Nah, we're Amuricuh.  Histree don' hupply tu us.

narnia's picture

the mere participation of the US in the IMF is unconstitutional.  that we would hand a bunch of international bankers the ability to spend US taxpayer money at their discretion is outright treason.  

when the Fed & Treasury lose control of the $, the fiat game no matter how it's dressed (SDR or otherwise) will be over for at least a generation. people will not send their kids to war. power will decentralize- not by will of the majority, but because the people who are worth a shit in this country will make it that way.

Miss anthrope's picture

I regret I cannot hit your green arrow many more times.  I haven't read the history of the inception of the IMF in 1944 but it appears around that time that the subversion of our government to Communist ideals was in full effect

Seapost's picture

Can't eat silver or gold.

I have a hard time digesting rice too. Pork-bellies!

jekyll island's picture

So eating gold can make your teeth start growing, eh?  Jerry, I love you as an entertainer, errr wrestler, but you've taken one too many to the head.  You have got to stay off those websites.  

bugs_'s picture

and the 500b number matches too!

jal's picture


There is no need to let the euro fail when you can use leverage to infinity by a cloud identity.

Just do it ... then worry about changing the rules after. You don't even need to have "deposits".

After all, its no different than an ordinary bank printing to give loans.

So the IMF goes bankrupt. Big deal. Everyone got saved and no real money got lost.



Elooie's picture

rediculous? They skipped it and went straight to plaid...


Snidley Whipsnae's picture

"rediculous? They skipped it and went straight to plaid..."

That's 'ludicrous' speed... with attached warning "Never, Ever, Use!"

In the case of the IMF 'ludicrous' speed = SDR

We are all being shepharded from Benny's experimental economic petri dish to the IMF's mad scientist version of test the population to destruction. Hey, if Benny's experiment has failed, why not try something even more extreme?

It's win win for the IMF and world oligarchs... If most of the worlds population die from hunger the remaining natural resources will sustain those left alive longer... If most of the worlds population survive they will be surfs.

"...and not one person in a million will understand what is happening" Keynes

jekyll island's picture

Little Bill Daggett: I don't deserve this... to die like this. I was building a house. 
Will Munny: Deserve's got nothin' to do with it. 
[aims gun
Little Bill Daggett: I'll see you in hell, William Munny. 
Will Munny: Yeah. 

MacGruber's picture

Agreed. I posted this before, but if a common currency was so damn important to trade the U.S would have printed with Canada 50 years ago.

"Which means that the US will be stuck in legal limbo when Europe pulls a Greece, collects American cash, and then finds it has no collateral to pay back with."

No worries, just add it to the shadow Fed balance sheet, or put it down in the Treasury's books under "goodwill".

DoChenRollingBearing's picture

No way Greece (or anyone else in Europe) will let other countries lay their hands on its gold.

disabledvet's picture

an American Admiral ran the City of New Orleans for 20 years. Given what American Staff officers and the entirety of the Officer Corps and all the soldiers, sailors airmen and marines have been getting killed for for the last 10 years "running" Greece for the next 20 would be a welcome relief--especially since the Greek PM is simply a shill for German banks and is systematically looting the country. In short "the country is collateral" and the gold will be taken just to make sure that's understood. Somebody has to stand for Western Civilization let alone the Greek people. Obviously it can't be the IMF. You'll see once a million people march on Athens. Prime Minister Poopy-doo will Scooby-doo faster than you can say "psuedo-socialist."

Rodent Freikorps's picture

And Molon Labe goes round the world and returns to the land of its birth.


11b40's picture

Go tell the Spartans......

Will today's Greeks spill their blood to defend their treasure?

Rodent Freikorps's picture

I'd vote no.

They seem to think more of the same will save them.

Oracle of Kypseli's picture

I hope by "they" you mean the Greek government shills. Because the Greek people have different ideas.