IsThe IMF Profoundly In Love With Pandora

Germany so far held its negotiating position with Greece because the German government knows that if it agrees to a sovereign debt cancellation (rather than a ‘haircut’ on privately held debt held which would affect mostly banks, financial institutions and hedge funds as happened in 2012), then more of the PIIGS nations (Portugal Italy, Ireland, Greece, Spain,) will demand the same.

It is the IMF that has finally opened Pandora’s box and let all the troubles previously contained within the European Union’s secretive governance mechanisms escape into the public domain.

While the Greek crisis has been containable, the problem posed by the other PIIGS is on a different scale, it took the EU 5 years to transfer around €200 billion in Greek debt exposure to the public balance sheet but in the end it looks as if Greece’s debt problem has overwhelmed both the EU’s ability to kick the can down the road and the faith of German taxpayers in “ever closer union” has been exhausted.

Should the first victim of the common currency pass through the exit door as early as next week however, nobody in Europe believes that the same exercise can be repeated with Italy, or Spain, or even Portugal. Their economies are too big (and their at-risk loans run to €hundreds of billions). Today, we saw the first public evidence of the schism within the IMF/ECB/EU Commission Troika, when the IMF in a press release explicitly stated that Greece is no longer viable unless there is both additional funding provided to the country, which can only happen if there is another massive debt haircut. Here’s the tasty bit:

” Even with concessional financing through 2018, debt would remain very high for decades and highly vulnerable to shocks. Assuming official (concessional) financing through end–2018, the debt-to-GDP ratio is projected at about 150 percent in 2020, and close to 140 percent in 2022 (see Figure 4ii). Using the thresholds agreed in November 2012, a haircut that yields a reduction in debt of over 30 percent of GDP would be required to meet the November 2012 debt targets. With debt remaining very high, any further deterioration in growth rates or in the medium term primary surplus relative to the revised baseline scenario discussed here would result in significant increases in debt and gross financing needs (see robustness tests in the next section below). This points to the high vulnerability of the debt dynamics.” [ … ] “”these new financing needs render the debt dynamics unsustainable.” (Read what the IMF said in full:)

That is precisely what Tsipras and Varoufakis have been claiming since day one. Unsurprisingly Greek government officials promptly said that the IMF report is in line with the Greek government’s views on debt. What makes the IMF report even more odd is its timing; three days before the Sunday referendum, Tsipras now has prima facie evidence to present to Greek voters as he tells them “see, we were right all along.”

Looking forward to the next Eurozone crisis, what the IMF’s “debt sustainability analysis” has just done is open the door for every single other comparably insolvent peripheral European nation (and it goes way beyond the PIIGS) to knock on the IMF’s door and say: “Mme Lagarde, if Greece is unsustainable, then why aren’t we?”

De – dollarization Moves Ahead – Once Again We Told You So,

by Phil T Looker

Forgive us a little self indulgent gloating, after all it was back in 2005, way ahead of the other contenders, we told you that moves were under way in the east to dump the US dollar as global reserve currency. That was when China, Russia and Iran abandoned the Petrodollar and started to trade in the currency of the vendor nation.

Our mate Ian had spotted the vulnerability of the US dollar and wrote about a move made by the old Iraqi tyrant Saddam Hussein in the 1990s, that showed the way.

How Saddam Hussein May Posthumously Win His War With The USA

Since then, here and on Little Nicky Machiavelli as well as at The Daily Stirrer we have reported the gradual erosion of the US grip on world trade as American international bullying and worries about their debt saw support for the Petrodollar steadily eroded.

And now from The Australian Financial Review via Zero Hedge, we have this:

US Officially Loses Battle Over China-Led Investment Bank

Add the IMF to the (now long) list of those who apparently share the UK’s view that joining the China-led Asian Infrastructure Investment Bank is an “unrivaled opportunity,” as Christine Largarde says her institution not only sees a “massive” opportunity for cooperation with the AIIB but is also “delighted” to explore the possibilities.

International Monetary Fund chief Christine Lagarde has said the IMF would be “delighted” to co-operate with the China-led Asian Infrastructure Investment Bank…

Mrs Lagarde said there was “massive” room for IMF co-operation with the AIIB on infrastructure financing.

Mrs Lagarde, speaking at the opening of the China Development Forum in Beijing, also said she believed that the World Bank would co-operate with the AIIB.

Meanwhile, Switzerland is now on board and India, Indonesia, and New Zealand are reportedly set to follow. As a reminder, the deadline for applications is the end of this month and it appears that the UK’s move to become a founding member has suddenly made the AIIB the coolest club on the block. Australia is expected to tender a “qualified yes” tomorrow.

We have reported the who saga of how Obama tried to bully the world on this, and how one by one, the nations of the world gave him the finger. It’s all in our Currency Wars paged and its related links.

Gotta have a grin at the ineptitude of politicians, haven’t you?

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ELSEWHERE:
De-Dollarization Du Jour: Russia’s Largest Bank Issues Yuan-Denominated Guarantees
Leading the charge to multipolarity and de-dollarization are Russia, resugent despite economic sanctions and the rising superpower in waiting, China. The downgrading of the dollar is clearly demonstrated in the launch of the BRICS bank and the establishment of the AIIB.

EU and US talk of war with Russia
The European People’s Party (EPP) is the largest political group in the European Parliament, and they are unerringly supportive of America’s efforts to start a war with Russia. “The time of talk and persuasion with Russia is over,” MEP and Vice-President of the EPP told a meeting on Tuesday, 21 April, “Now it’s time for a tough policy, and concentration on defence and security …”
This Is Why The US Just Lost Its Superpower Status According To Larry Summers
As more and more countries flock to join the Chinese led Asian Infrastructure Investment Bank after Britain, France Australia, India and other traditional US allies defied Washington to associate themselves with China’s initiative, conservative economic pundit Larry Summers once a contender for the chairmanship of the Federal Reserve delivered a sharp rebuke …

Plans For Money Confiscation – Say Bye Bye To your Savings

We Told You So – but take heart you lefties, the government’s plans to steal your hard earned will give you chance to practice what you’ve always preached about redistribution of wealth.

from forbes.com

The International Monetary Fund (IMF) quietly dropped a bomb in its October Fiscal Monitor Report. Titled “Taxing Times,” the report paints a dire picture for advanced economies with high debt to GDP ratio that fail to aggressively “mobilize domestic revenue.” It goes on to build a case for drastic measures and recommends a series of escalating income and consumption tax increases culminating in the direct confiscation of assets.

Read more: The International Monetary Fund Lays The Groundwork For Global Wealth Confiscation

Oh, I’m almost deafened by the wailing and gnashing of teeth from lefties. Funny how open handed they are with other peoples money. It’s a different matter when their own is threatened.

Meanwhile even Obama’s biggest fans are having their pockets picked.

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Jus Primae Noctis

It came as no surprise to Boggart Blog to hear IMF Chief Dominic Strauss Kahn is on suicide watch in the notoriously tough New York Prison where he is temporarily domiciled.

In is not the same of being arrested for sexual assault that has got to the internaional bureaucrat but the shock of finding out he cannot do what he wants, when he wants, to whom he wants.

Strauss Kahn is one of “our new unhappy lords,” those faceless and almost anonymous elitists who wouls establish a new world order under which national and cultural identities would dissapear. He is one of the leading proponents of a global government and a global financial system.

Such people simply cannot cope with learning the feudal Lord’s right of right of Jus Primae Noctis* has not been recognised since the twelveth century.

*The right of first night – the Lord got to shag every young woman who lived on his estate on the night of her wedding.

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