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The Latest Rumor: Fed To Fund IMF, Bypassing Congressional Refusal Of European Bailout
While we have long been mocking any rumors representing formal attempts to get the IMF's funding to higher level, due to the need for a congressional approval over and beyond what is currently permitted which means any such plan is DOA, one loophole always has been the private bank known as the Federal Reserve, which may, as permitted by its charter since its charter allows it to do pretty much anything even buy Greek and EFSF, not to mention Italian, bonds, lend to the IMF at will. And just as last week demonstrated, when push comes to shove the Fed will always bail out Europe, so tonight German paper Die Welt (which has about the same success rate as Thomas Stolper at predicting the future) had put two and two together and come up with the latest rumor, namely that Ben Bernanke is about to directly bail out Europe using the IMF as an intermediary. Via Reuters, "The Federal Reserve, along with the 17 euro zone national central banks, may help provide the International Monetary Fund with funds that could be used to aid debt-ridden states, a German newspaper said. Die Welt cited sources close to the negotiations as saying the euro zone central banks could pay at least 100 billion euros ($134.2 billion) into a special fund that could be used for programs for nations struggling to control their debts. "Also other central banks, for example the U.S. Federal Reserve, are apparently prepared to finance a part of the costs," the paper said in an advance copy of an article to appear on Monday." That there is not an iota of truth in this article is a given, yet the market will latch on to this latest rumor like a rabid pitbull... until it realizes that by having to resort to such grotesquely made up stories it means that the ECB, which is the only real short-term rescue mechanism for Europe, is nowhere near close agreeing to do what the bulk of Europe's bankers (but not Goldman) demand it do - print.
More:
Treasury Secretary Timothy Geithner may discuss the idea in the coming weeks when he visits Europe, the paper said.
Officials had said on Saturday that talks on the size of loans from euro zone central banks were starting at a technical level after finance ministers from the currency union gave the go-ahead to explore the idea.
The idea is for the IMF to be able to match the new firepower of the euro zone bailout fund, which is being leveraged.
One senior euro zone official has said that no amount had been discussed at the political level.
The euro zone wants to boost the IMF's resources so the fund could provide a credible backstop if Spain and Italy were to need an emergency loan program.
Geithner is to hold talks with several European leaders in the coming week and is set to urge them to take decisive action at an EU summit aimed at preventing the euro zone debt crisis spiraling out of control.
Of course, in the 0.01% chance this latest baseless speculation is true, it once again confirms that the traditional mechanism of governance, once which involves popular representation and the associated bells and whistles is completely dead, and has been replaced with one in which a private bank with 10 central planners effectively rules the world, with the simple goal of never seeing even one bank's "assets" be impaired, something which Germany also alluded to earlier when it announced it would let banks not suffer Greek debt haircuts if only they were to agree to the "Neu Anschluss" just that little bit faster.
Germany is prepared to soften language in the euro zone's permanent bailout mechanism compelling bondholders to accept losses in exchange for much stricter budget rules, four sources have told Reuters.
The shift would not completely remove the possibility of private bondholders having to accept losses in the future, but it would align the statutes of the European Stability Mechanism more closely with IMF rules, creating a more-level playing field for private buyers of euro zone sovereign debt.
The hope is that will reassure private bondholders that they are not being singled out for losses by European policymakers, bolstering their confidence in buying euro zone bonds - and potentially helping Italy and other under-pressure borrowers.
Yet there is one difference: whereas Germany is appealing to Europe's people to voluntarily hand over their freedom and sovereignty to Merkel, the Fed is acting on the assumption that it already has these in hand. Luckily, none of this matters as there is football night... then Dancing with the Stars night... then Jersey Shore night... then rinse and repeat.
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It won't happen for employers have been the effective tax collectors for the government for a long time. Employers do not want the government to be checking their books.
When a few huge corporations decide to pay their employees sans deductions, then you may have something :)
srs, enough is enough
Time to put Shalom Bernanke in jail.
libertarian86.blogspot.com
Steve Liesman writes for Die Welt?
Once a banker,always a.....
Delusional fucking,thieving parasite.
Thats how that saying goes,right...?
I suppose 1.2 trillion to roll over european debt isnt that much in the grand scheme of things. If that much truly were available I bet only about 400 billion would have to be used.
Split between europe and the united states that isnt even noticeable in a 40 trillion dollar collective economy.
Seriously looks like problem solved as soon as germany gets over their handwringing.
<<I bet only about 400 billion would have to be used.>>
There are commissions and brokerage fees to be paid and a few misc. expenses as well.
But they're still solving debt problems with more debt, right?
Also how does a private bank get the right to do things that damage us all but helps only the few?
Maybe I am pointing out the obvious. We've been trained that focusing on a particular and specific demon makes it what it all about. We believe it is defined and therefore can be confined - but we've gone through about all the labels we got (and been curved up into an equal number of little manageable demographic comfort and fear groups) . It's not about Al Capone. It's about a bunch of little "lost" sets of avarice infested genetics we don't have names for or know about - so it really ain't important to have a name - we know em when we see `em (and they know we know) followed by a pretense that simply fixing the thing behind the name will deliver us.
A tad more complicated.
The biggest enemy we got - by far - and you may know - is the soul behind that face we see in the mirror everyday. That's the guy that let it happen and that guy may engage in informative, yet ineffective, rhetorical catharsis and then really believe it is making a difference.
Hope is a wonderful thing - a waste of time - but, nonetheless, wonderful. Like a needle in the vein!
Time for the dollar to drop below it's low. Bernanke and the Federal Reserve is quickly turning the US into a PIIG member. The ultimate debtor. Bernake and the Federal Reserve will print into the abiss just before their 100th anversary. Bernanke wants to fail before Japan.
Since states have been using their pension funds as ATMs to meet their
daily debt obligations, a day of reckoning is just around the corner when
pensioners will find no check in the mail. When that day arrives, the occupy
Wallstreet crowd will be dwarfed by the angry mobs in and around state
capital buildings throughout the country, and there will be nothing peaceful
about them and their demands. At that point, IMHO , the Fed may reconsider
its policy of not buying state bonds.
I guess when you monetize it matters not what you use as collateral. State bonds will do just nicely.
My prediction that we muddle through and end up with $15 dollar happy meals and a third world diet for the bottom half may be optimistic if that came about.
Greenspan said he could guarantee a certain amount of dollars in 2030 or a certain value for the dollar, but not both.
The IMF is a parastitic organization,and it needs to be "disappeared".
Ever wonder how your IMF money will be used…?
Here’s Johann Hari on The IMF itself should be on trial... “it has raped with impunity for years” :
Sometimes, the most revealing aspect of the shrieking babble of the 24/7 news agenda is the silence. Often the most important facts are hiding beneath the noise, unmentioned and undiscussed…the big news… is what the IMF has done to innocent people in the recent past. That is what it will do again, unless we transform it beyond all recognition. But that is left in the silence.
To understand this story, you have to reel back to the birth of the IMF. In 1944, the countries that were poised to win the Second World War gathered in a hotel in rural New Hampshire to divvy up the spoils. With a few honourable exceptions, like the great British economist John Maynard Keynes, the negotiators were determined to do one thing. They wanted to build a global financial system that ensured they received the lion's share of the planet's money and resources. They set up a series of institutions designed for that purpose – and so the IMF was delivered into the world.
The IMF’s official job sounds simple and attractive. It is supposedly there to ensure poor countries don’t fall into debt, and if they do, to lift them out with loans and economic expertise. It is presented as the poor world’s best friend and guardian. But beyond the rhetoric, the IMF was designed to be dominated by a handful of rich countries – and, more specifically, by their bankers and financial speculators. The IMF works in their interests, every step of the way.
Let’s look at how this plays out on the ground. In the 1990s, the small country of Malawi in south-eastern Africa was facing severe economic problems after enduring one of the worst HIV-AIDS epidemics in the world and surviving a horrific dictatorship. They had to ask the IMF for help. If the IMF has acted in its official role, it would have given loans and guided the country to develop in the same way that Britain and the US and every other successful country had developed – by protecting its infant industries, subsidizing its farmers, and investing in the education and health of its people.
That’s what an institution that was concerned with ordinary people – and accountable to them – would look like. But the IMF did something very different. They said they would only give assistance if Malawi agreed to the ‘structural adjustments’ the IMF demanded. They ordered Malawi to sell off almost everything the state owned to private companies and speculators, and to slash spending on the population. They demanded they stop subsidizing fertilizer, even though it was the only thing that made it possible for farmers – most of the population – to grow anything in the country’s feeble and depleted soil. They told them to prioritize giving money to international bankers over giving money to the Malawian people.
So when in 2001 the IMF found out the Malawian government had built up large stockpiles of grain in case there was a crop failure, they ordered them to sell it off to private companies at once. They told Malawi to get their priorities straight by using the proceeds to pay off a loan from a large bank the IMF had told them to take out in the first place, at a 56 per cent annual rate of interest. The Malawian president protested and said this was dangerous. But he had little choice. The grain was sold. The banks were paid.
The next year, the crops failed. The Malawian government had almost nothing to hand out. The starving population was reduced to eating the bark off the trees, and any rats they could capture. The BBC described it as Malawi’s “worst ever famine.” There had been a much worse crop failure in 1991-2, but there was no famine because then the government had grain stocks to distribute. So at least a thousand innocent people starved to death.
At the height of the starvation, the IMF suspended $47m in aid, because the government had ‘slowed’ in implementing the marketeering ‘reforms’ that had led to the disaster. ActionAid, the leading provider of help on the ground, conducted an autopsy into the famine. They concluded that the IMF “bears responsibility for the disaster.”
Then, in the starved wreckage, Malawi did something poor countries are not supposed to do. They told the IMF to get out. Suddenly free to answer to their own people rather than foreign bankers, Malawi disregarded all the IMF’s ‘advice’, and brought back subsidies for the fertilizer, along with a range of other services to ordinary people. Within two years, the country was transformed from being a beggar to being so abundant they were supplying food aid to Uganda and Zimbabwe.
The Malawian famine should have been a distant warning cry for you and me. Subordinating the interests of ordinary people to bankers and speculators caused starvation there. Within a few years, it had crashed the global economy for us all.
In the history of the IMF, this story isn’t an exception: it is the rule. The organization takes over poor countries, promising it has medicine that will cure them – and then pours poison down their throats. Whenever I travel across the poor parts of the world I see the scars from IMF ‘structural adjustments’ everywhere, from Peru to Ethiopia. Whole countries have collapsed after being IMF-ed up – most famously Argentina and Thailand in the 1990s.
Look at some of the organization’s greatest hits. In Kenya, the IMF insisted the government introduce fees to see the doctor – so the number of women seeking help or advice on STDs fell by 65 per cent, in one of the countries worst affected by AIDS in the world.
In Ghana, the IMF insisted the government introduce fees for going to school – and the number of rural families who could afford to send their kids crashed by two-thirds. In Zambia, the IMF insisted they slash health spending – and the number of babies who died doubled. Amazingly enough, it turns out that shoveling your country’s money to foreign bankers, rather than your own people, isn’t a great development strategy.
The Nobel Prize winning economist Joseph Stiglitz worked closely with the IMF for over a decade, until he quit and became a whistle-blower. He told me a few years ago: “When the IMF arrives in a country, they are interested in only one thing. How do we make sure the banks and financial institutions are paid?... It is the IMF that keeps the [financial] speculators in business. They’re not interested in development, or what helps a country to get out of poverty.”
Some people call the IMF “inconsistent”, because the institution supports huge state-funded bank bailouts in the rich world, while demanding an end to almost all state funding in the poor world. But that’s only an inconsistency if you are thinking about the realm of intellectual ideas, rather than raw economic interests. In every situation, the IMF does what will get more money to bankers and speculators. If rich governments will hand banks money for nothing in “bailouts”, great. If poor countries can be forced to hand banks money in extortionate “repayments”, great. It’s absolutely consistent.
Some people claim that Strauss-Kahn was a “reformer” who changed the IMF after he took over in 2009. Certainly, there was a shift in rhetoric – but detailed study by Dr Daniela Gabor of the University of the West of England has shown that the substance is business-as-usual.
Look, for example, at Hungary. After the 2008 crash, the IMF lauded them for keeping to their original deficit target by slashing public services. The horrified Hungarian people responded by kicking the government out, and choosing a party that promised to make the banks pay for the crisis they had created. They introduced a 0.7 per cent levy on the banks (four times higher than anywhere else). The IMF went crazy. They said this was “highly distortive” for banking activity – unlike the bailouts, of course – and shrieked that it would cause the banks to flee from the country.
The IMF shut down their entire Hungary program to intimidate them. But the collapse predicted by the IMF didn’t happen. Hungary kept on pursuing sensible moderate measures, instead of punishing the population. They imposed taxes on the hugely profitable sectors of retail, energy and telecoms, and took funds from private pensions to pay the deficit. The IMF shrieked at every step, and demanded cuts for ordinary Hungarians instead. It was the same old agenda, with the same old threats. Strauss-Kahn did the same in almost all the poor countries where the IMF operated, from El Salvador to Pakistan to Ethiopia, where big cuts in subsidies for ordinary people have been imposed. Plenty have been intimidated into harming their own interests. The US-based think tank the Center for Economic and Policy Research found 31 of 41 IMF agreements require ‘pro-cyclical’ macroeconomic policies – pushing them further into recession. …
[I]f we took the idea of human equality seriously, and remembered all the people who have been impoverished, starved and killed by this institution, we would be discussing the establishment of a Truth and Reconciliation Commission – and how to disband the IMF entirely and start again.
http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-its-not-just-dominique-strausskahn-the-imf-itself-should-be-on-trial-2292270.html
End the Fed.
Gold would be higher if da Fed was going to increase funding of the IMF. Me thinks...
The Fed is prepared to expend substantial resources to make sure gold does not go too much higher.
Select the links below to see if your guy voted against you to have you detained. The majority of these would love to see you go bye bye if you do not like the new status quo that will be imposed on us all. They know what is fixing to happen, so they are just getting ready.
There is only a hand full worth keeping in office.
I had this laid out nicely. but when I save it gets all jumbled, sorry about that.
Click on links 00210, 00211 and 00218 to see their votes Y/N.
Votes Y/N 00218 01-Dec S. 1867 On Passage of the Bill Passed S. 1867 As Amended; An original bill to authorize appropriations for fiscal year 2012 for military activities of the Department of Defense, for military construction, and for defense activities of the Department of Energy, to prescribe military personnel strengths for such fiscal year, and for other purposes.00211 29-Nov S. 1867 On the Amendment S.Amdt. 1064 Rejected Paul Amdt. No. 1064; To repeal the Authorization for the Use of Military Force Against Iraq Resolution of 2002. 00210 29-Nov S. 1867 On the Amendment S.Amdt. 1107 Rejected Udall (CO) Amdt. No. 1107; To revise the provisions relating to detainee matters. Sen Rand Paul on the floor. http://www.youtube.com/watch?v=wbvift3Kb34
only a few TRILLION short!
Who's your Daddy,USA....
Looks like Daddy,is giving sugar to other families kiddies.....
Daddy's Fucking Around......
You kids get No new clothes...
Decimal places are so transitory.
Laws and regulations are for the "little people", the "unwashed masses", the "99%", etc., etc., etc....
SP500 bull vs bear battle maintains bearish bias after Friday price action and more downside expected.
My long term indicators have continued to warn of US Dollar strength and EURO weakness and these signals have increased since 2009. The overdue dollar rally should be substantial.
http://stockmarket618.wordpress.com
i got your long your long term indicators hanging
should you vote GOP on the HOPE (funny word) they will stop the Fed from using taxpayer dollars to bail out the Eurozone???? and where are the Pauls in all this?
Finally someone with a thought and a job......The RP's are just waiting as the rest of the fools just keep droping out.........
Why bother backing a fiat currency with gold when you can use the ultimate commodity, "flesh and blood"...congratulations citizens of the world the price on your head is about to go up.
Where do I vote No Confidence in planet earth?
If the Fed bails out Europe in any major and obvious manner, Ron Paul may get his wish. Congress will be none too happy.
Normal BS... what more would we expect
http://confoundedinterest.wordpress.com/
FUCK THE FED.
FUCK BERNANCKE
FUCK GEITHNER
NOT NECESSARILY IN THAT ORDER.
THEN KILL THE FED.........AND YOU KNOW THE REST.
I like the practical, step by step, cheat a little here, lie a little there --- reason for the economic problems
rather than a grand conspiracy. You know the highway to hell is wide and paved with good intentions.
And the gate is wide, and many enter through it.
Once the practicality of finacing expenses or inflating away expenses rather than paying for them with taxes was rediscovered by this generation, then our politicians did what the royalty did previously --- they did the practical thing.
And of course it was a solution that insured their success.
The Constitution is what we need to be re-explained to America, and its predessor the Declaration.
You know, when an officer of the Armed forces is sworn in --- he swears to uphold the constitution.
There are a lot of little gotchas that still remain from the old days
This is precisely the reason I told you guys when news first hit of the Refucklicans trying to pass a measure to stop the bailout of Europe through the IMF. I told you guys they only found the spine to do this because it was already known that the measure would fail, therefore, for PR pruporses and for their campains, they were safe in sticking their necks out on this issue.
This is also, precisely, the reason why the bankers, at the behest of their whores in Congress, rammed down the Federal Reserve Acr of 1913, so the bank has control, not the Congress, which had until that time, the Constitutional duty to control America's money.
These worthless Republicans knew this going into it. They knew that if this thing passed that Europe would collapse sooner than it already would and they would get the blame for it.
But they also knew that the Fed would simply bypass them because that power wes given to them to do that by the Congress of 1913.
Fuck 'em all.
We need Ron Paul.