IMF to Bernanke: Thanks For Nothing, As Threat To International Monetary System Looms

Tyler Durden's picture

We suspect the world was placing a little more 'hope' in Bernanke's willingness to print-and-save-us-all as the IMF just announced the activation of its "New Arrangements to Borrow" for a further six months. Obviously, given the quota subscriptions and the nature of the NAB, we suspect the rest-of-the-world will get pound of flesh (or USD bailout) implicitly.


IMF Activates Standing Borrowing Arrangements for Further Six-Month Period
Press Release No. 11/342
September 21, 2011


The International Monetary Fund (IMF) announced today that its Executive Board has formally completed the process of activation of the New Arrangements to Borrow (NAB) for a further six-month period from October 1, 2011 to the end of March 2012. The expanded NAB became effective on March 11, 2011 and was activated on April 1 for the maximum period of six months (see Press Releases No. 11/74 and No. 11/109).


The NAB is a standing set of credit lines under which 36 members or their institutions have committed to provide supplementary resources to the IMF totaling up to SDR 363.6 billion (about US$571 billion1). Activation requires the consent of participants representing 85 percent of total credit arrangements eligible to vote and the approval of the IMF’s Executive Board. Since the April 1 activation, some SDR 27.7 billion have been committed to Fund-supported programs for which NAB resources could be drawn, and actual drawings under the NAB amounted to SDR 6.8 billion (US$11 billion).


The NAB is supplementary to quota resources, which are made up of the quota subscriptions each member pays upon joining the Fund and in the context of quota increases thereafter, broadly based on its relative size in the world economy. The IMF is a quota-based institution, and the Fund’s Board of Governors has emphasized that each member of the Fund commits to use its best efforts to complete the steps required to make the quota increase under the 14th General Review of Quotas effective no later than the Annual Meetings in 2012.



And from Dow Jones (via Global Finance)


WASHINGTON -- The International Monetary Fund Wednesday re-activated a $571 billion resource pool to ensure it has funds to help cover Europe's worsening sovereign-debt crisis.


The IMF extended activation of its so-called New Arrangements to Borrow for a six-month period from October.


The crisis is entering a dangerous new phase. The risk of a Greek default is rising and Italy and Spain's sovereign debt has come under attack.


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 IMF managing director must first make a special request to tap the special kitty.


IMF Managing Director Christine Lagarde has said recently that a heightened readiness is required given the elevated risks in the global economy.


So far, the IMF has already distributed nearly $11 billion from the NAB. Specific financing programs requiring additional board approval are needed to use the resource pool.


In total, the supplementary fund can provide up to about $571 billion in extra resources to the IMF, but only around $331 billion is currently available for use. Without the special resource pool, the IMF would only have around $60 billion on hand.


It is funded through bilateral loans from countries, unlike normal IMF lending resources, and is designed as a temporary measure. It is expected to be largely replaced by an agreement reached 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.

-By Ian Talley, Dow Jones Newswires,


This is not completely unexpected as we have been discussing the rise in borrowing arrangements/facilities at the IMF for a while - what is notable is the timing - given constant chatter out of Europe that all is 'satisfactory'. No reaction whatsoever in ES so far, a small tick up in EUR and Gold...but mostly noise.

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spiral_eyes's picture

I think Biden promised Wen Jiabao no printing for a few months... protecting Chinese purchasing power.

Don't worry, bitchez!

Bernanke will be printing soon! 

oobrien's picture

If he doesn't print, we're looking at a severe deflationary crash.

The commodity investors--including the gold and silver bugs--will be in for quite the beating.

In the end?

He'll print.  He has to to keep the Ponzi scheme going.

You metal boys are safe--for the time being.

Cursive's picture

@oobrien/geraldcelente spammer

We're on the stagflation precipice.  There is no way to keep inflating without major civil unrest.  Three fucking fed governers dissented.  Why?  They know how bad it is.  The choice not to inflate may hurt asset values, but at least commoners will be able to afford to eat.

spiral_eyes's picture

I can't believe this oobrien guy.

"You metal boys are safe for now"

I mean what the fuck?

Benny prints metals go higher as an inflation hedge (and silver particularly on greater industrial demand) and a hedge against dollar collapse due to devaluation.

Benny doesn't print metals go higher — because asset prices will be collapsing and people will be desperate for a safe haven. 

Beyond the potential for a  transitory 10% dip (which would quickly rebound) there is practically no downside to metals right now — only upside. 

DormRoom's picture

market movers will sell gold, since it's been a profitable trade, and wait on the sideline for the end of Eurozone.  No US triache for world economy, means blowback in Greece & Spain, since their feeble economy will likely enter great depression territory.

Bringin It's picture

DormRoom - I think you may have confused triache w/ biache.  Possible?

TruthInSunshine's picture

Screw the IMF, World Bank, U.N., and all other tools of the NWO Agenda.

And screw their puppet central banksters, such as The Federal Reserve, Bank of England, European Central Bank & Bank of Japan, also.

It's time that even those who haven't expressed concern up until this critical juncture in history join with those of us who are awake and realize that only evil, destruction, erosion of living standards, complete control and subjugation, and in fact, slavery can come from anything even remotely resembling an integrated, world government.

It is way past time that the people of the world demand that their respective governments represent their independent interests, free of any demands, impositions or other external pressures from any global or world bodies, and if their respective governments don't oblige the wishes of their citizenry, dispatch with those governments who defy the will and best interests of the citizenry they are supposed to represent.

Kill the NWO completely and forever. It's an inherently evil concept that will lead to inherent and perpetual evil if it is brought about.

Any global, integrated government will ultimately and simply make total slaves of all of mankind.

If I were the POTUS, I'd make sure to surround myself with a loyal and moral core of dedicated men and women, and I'd order the destruction of the IMF, World Bank & U.N. by any means necessary, including carpet bombing of all of their facilities and destruction of their infrastructure, and I'd demand that Congress pass legislation making it an act of sedition, punishable as a capital offense, for any U.S. Government Official to communicate with or cooperate with any person or entity advocating for the interests of any such organization.

I would also immediately order the DOJ (and encourage states attorneys general) to research all laws allowing a complete and total dissection of all federal reserve bank activity, and push for a total repeal of the Federal Reserve Act of 1913, and to bring forth any and all criminal charges that can be meritoriously filed as information against all federal reserve bank members/employees/agents under all applicable federal (and state) laws.

Prairie Fire's picture

You should shut the fuck up.


TruthInSunshine's picture

Is that you, David Rockefeller, you seditious bastard. You will hang by your balls soon enough. You can only run for so long, old man.

DaveyJones's picture

What's that, all those entities only after your best interest?  The IMF just trying to feed hungry Africans? Helping the greeks not owning the Acropolis? It's called anger and it's spreading like a Prairie Fire

traderjoe's picture

It's the next Fed/anti-PM troll...

sasebo's picture

Let's do it!!!!!!!!!!!!! I'm sick of all this obnoxious, pompous, meaningless bullshit.

RockyRacoon's picture

There are some poor souls marching around on Wall Street as we speak/write.   Go on down there and join 'em.

Me?  I'm stopping off at the local sporting goods store in the morning for some more ammo....

BrocilyBeef's picture

I absolutely agree. Buy PMs, it's our only choice. If you were to read history backwards, you'd realize the same mistakes are generally repeated ad nauseum.

strannick's picture

Now that the FED said no QE, maybe the QE is going to come via tthe IMF. Funny how they announced the 6 month reactivation with potential for more than half a trillion $ the night the Fed said no QE

disabledvet's picture

actually i'm in agreement with this point of view. obviously looking at any market through a single lens is death to a portfolio so keep pounding square pegs into round holes--i won't stop you. the question really isn't "will gold be sold" but "is the surge looking winded." obviously the answer is yes. no one is a fool for owning gold let alone buying it--but we all are fools if we think markets move in one direction. hence the only market rule: "diversification...within reason." to me that's equities, fixed income, cash, precious metals and economists. everything else is speculative. i've slammed The Bernank empirically harder than anyone--and that includes the possibility of operation twist given their stated objective of "creating inflation." this would patently fly in the face of that objective. so the logical question then is not to start running aruond "zh style" like chickens with our heads cut off but ask the obvious question: "since we know he's not an idiot...why do it?" the criticisms are obvious. so what about the "positivisms" then? right now the biggest postive i see is there's no doubt who's "got Wall Street by the nose." And of course no less than Wall Street itself should love that. "There's no question who's in charge here." And while i agree "it ain't them"--methinks they'll take the leadership of "The Exorcist" Bernanke even though it creates...discomfort.

iNull's picture

I was surprised at the drop in PM in Oct 2008. The argument at the time was forced liquidation due to margin calls and the need for cash. He may be thinking that history will repeat itself, but driving while looking in the rear view mirror is dangerous and unreliable. And it could be that even if gold does drop due to deflationary pressure, your 3rd scenario calling for a minor and transitory dip is all that it amounts to.

I'm not a hard core metal bug, so I have no dog in the hunt. I can't afford the dog quite frankly.

FlyPaper's picture

Speculating that "uncertainty" especially in Europe with keep the metals prices up.  Where is the IMF going to get this money from?  Printing is a likely answer (where does the US get the money it doles out to the IMF? Printing).  Who supplies a huge share to the IMF?  The U.S.  - or perhaps I should say US.  All this amounts to is a cluster-f of dollar holders.  They are draining money away from the major countries.  I don't want to bail out Greece, and I sure as hell don't want to pay taxes for that purpose.  

There's no way the global system can do anything but print.  We have either Cathardic events (sudden collapses) -OR- we have slow painful bleeding dry of the citizens to "keep the system going."

Gold is a competing currency.  There's only so much of it on the globe.  China is trying to build gold reserves so they can partly back the Yuan.  If the dollar conversion of gold currency is such that I can buy more of it with fewer dollars, then I'd be quite happy.  Because the dollar won't say up - especially when the hot air runs out.  I figure Bernanke has about 24 months before he completely loses control.


max2205's picture

Ummmm, it'll be needed.....

chump666's picture

You are 100% correct.  The FED will disregard Wall Street (for the time being).  But they know inflation/stagflation is there, they also know China is most likely going into a major stagflation crunch - so they won't print unless oil goes to $30 or indexes go down 30% or 40%.  But by then any print job will be pointless...The global economy will crack like an egg.


Crisismode's picture

You have all the brains of a 12-year-old masterbator.


Oh, really, you ARE a 12-year-old-masterbator.


So sorry, my mistake.

Manthong's picture

As a metal bitch, I take umbrage with that boy remark.

WonderDawg's picture

CM, I've noticed you frequently resort to personal attacks whenever anyone disagrees with your position, or if they offer an alternative line of thinking with regards to PMs. You're obviously very emotionally involved with your PM trade, and you actually are the one who acts like a pre-pubescent boy. You act like a tool. The level of angst you display betrays your confidence. Grow a pair.

slewie the pi-rat's picture


he's responding to a fuking troll-bot, dawg! 

or haven't you "noticed"

WonderDawg's picture

Slewie! Ahoy! I haven't paid close enough attention to oobrien to know if he's a troll or not, but he made a valid point. But I know, I know, he said something about the possibility of PMs taking a beating, so naturally he's going to take one himself. I've been there before, I know the feeling. And I've said this before, too: I'm not anti-PM, I'm a buyer of physical, but I see better buying opportunities in the future, and looking at the numbers this morning, I might be right.

chindit13's picture

But he spells like an adult.

DormRoom's picture

He won't print.  3 board members oppose, and it'd be hard for him to convince the others, given the data (QE boosted equities, but did nothing for the job market).  Only fiscal stimulus can save the US, but that's not happening.


Republican will win Congress & the white house in 14 months as we enter the Greatest Recession (30 year debt bubble does that), and Bernanke will get fired.


How do you know you're in the Greatest Recession?  When the US Central Fed chairman loses his jobs, like the rest of us.


In other news, Large Hadron Collider still set to increase energy beams by Christmas, so that's when the null singularity occurs for sigma 6+ events, like a complete systemic financial collapse.


Rodent Freikorps's picture

I don't think we'll get a mini-black hole.

I think we'll get uncontrolled boson generation leading to unstable warp bubbles.

Ned Zeppelin's picture

They  find the Higgs particle? 

Manthong's picture

They will discover that the Higgs boson is infinite in quantity, occupies every unit of spacetime but has no mass.. it will be given the symbol FRN. 

DeadFred's picture

I didn't know they lost it. Come on, I had to say it.

bluebare's picture

Probably the best spot available to insert this anecdotal update on the fallout of Fukushima from Al Jazeera:

MsCreant's picture

Thanks for posting. Wow. I'd like to think I would have left already, but leaving isn't easy.

RockyRacoon's picture

Battered nuclear reactor syndrome.

MsCreant's picture

That really works. I was thinking that my job pays well and if I was uncertain if I could get a good job elsewhere, I might make bad decisions. I hope not, but...

The woman's daughter in the vid... do you leave and have an exceedingly uncertain financial future, or stay. I hope I would leave and be happy to be homeless, in a tent, trying to reinvent myself somewhere. I may not be able to do it. But seeing your kid sick like that, man. I think I would go. Very apt term you created there. Denial. On going abuse. Feel powerless to cultivate opportunities elsewhere. All match up really nice.

SMG's picture

Yes, shift all the blame to a physics science project.   It could never have been due to central planning by an oligarchy who's trying to increase it's power, and irradicate any opposition.  

Rodent Freikorps's picture

You do know where CERN is, don't you?

They'll claim a black hole ate the gold.

MsCreant's picture

I understand they are rapidly building one in Fort Knox, KY.

knukles's picture

Are you CERNtain about that?

MsCreant's picture

If I can't handle PUNishment, I should not give it out, eh*?


*No puns were created or harmed in the making of my post.

clymer's picture

We are safe anyway. Every time see equities tank, gold might tank by half as much




ANd when equities tank that good ole age-old money we call gold buys more of them, and more commodities as well.


Gold holds value. You're still viewing it as an investment. It's money.

IQ 145's picture

In the end we're all dead. right now "Mr. Wisdom" had to say "there are significant downside risks in the economy"; MarketWatch says "Fed Spanks Stocks"; Jesus, Mary and Joseph; We pay this guy? Whose side is he on. Cost me $16,500. I guess I better go back to my old idea that stock market people are all crazy and stick to commodities; boy they sure act like they're crazy.

Robslob's picture

Good news IQ guy:

IQ is not required to make money in the stock market.

IQ is not required to lose money in the stock maket.

Bad News?
You didn't have something as simple as "inside information" in order to make a succesful trade...which actually makes you a dumb ass gambler like everyone else.

DaveyJones's picture

well said, there are no markets, only con jobs

Prairie Fire's picture

I saw it coming.

2 drug dealers are arguing over a debt.

The debtor drug dealer says 'I'll have the payment tomorrow'

Then he shoots the creditor drug dealer in the face.

Can you see it now?

Soul Train's picture

IQ - you traded the obvious TA on your Dec futures position. If it were that easy to make the $$$, there would be no end. Something to consider next time.

Makes you clueless when you try to look at the logic of it all, doesn't it.

Sage: invest in the long term. If you want a quick bet, short term gamble when you are one of the few who know it's still Summer, and you're betting on cooler weather just ahead.

Your TA analysis that you told us about was intelligent. But like we told you at the time, it was prey for the BOTS and their little algo devil elves.


LetThemEatRand's picture

He will print, because in reality he's just doing what he thinks will benefit one Mr. Bernanke.   Per the Fed:


"The overwhelming majority of Bernanke's holdings are in his TIAA-CREF account, a retirement plan for professors at Princeton and many other universities.

His Fed filing shows that at the end of 2004 his TIAA-CREF account had a net worth between $1 million and $5 million, and produced income during the year between $15,000 and $50,000. Details about his investment choices within that plan were not available."  

Of course he also expects a nice job at Goldman as a consultant while he pretends to continue teaching after he leaves the Fed, and we all know what Goldman wants.