IMF Seeking a $500 Billion Bailout
April 28, 2009 · Posted in General Economics
As it is running out of money, IMF head says it will sell bonds to raise funds:
The International Monetary Fund will sell bonds as a way to raise funds to lend to struggling nations, the head of the organization said Saturday, in a victory for developing countries.
Treasury Secretary Timothy Geithner on Saturday urged world finance officials to pony up more funds to meet the $500 billion goal. Progress towards that target “must be an important outcome of these meetings,” he said.
President Barack Obama is seeking congressional approval for up to $100 billion, matching commitments for the same amount made by Japan and the European Union. Canada and Switzerland have pledged $10 billion and Norway about $4.5 billion. But the full $500 billion hasn’t yet been raised.
The additional funds reflect the growing importance of the IMF in dealing with the global downturn, the worst the world economy has experienced in six decades. Just a year ago, the 185-member organization was seen as increasingly irrelevant as many developing country economies boomed.
The IMF “needs a more representative, responsive and accountable governance structure,” he said. “This is essential to strengthening the IMF’s legitimacy.”
Make no mistake. What the poor nations of the world need is the exact opposite. The IMF should be abolished, plain and simple. What has it done to fight world poverty since its inception in 1944? Has it not caused way more havoc than anything else throughout history? We don’t need a national central bank, and we most definitely don’t need a world central bank.
Obviously there is a concerted move toward a more and more powerful IMF. I wrote about this recently in Talks About Global Currency Gain Traction:
If you look at the description of SDRs (http://en.wikipedia.org/wiki/Special_Drawing_Rights), they already possess a lot of the features that the European Currency Unit had in Europe as a prelude to the Euro.
I expect that if there is to be a concerted move toward a world currency, it will coincide with more and more talk about SDRs in the news and in the government propaganda all around the world.
Naturally, talk about the supposed importance of the IMF is increasing along with global currency proposals.
This is the first time ever the IMF is selling bonds. There is a striking parallel between this and what Fed recently did. Please Consider Update on Treasury’s Supplementary Financing Account:
Thus the Fed resorted to the Supplementary Financing Program, a 3rd, nontraditional, way of obtaining financing. The precise characterization of this move has to be nothing but this: That the Treasury borrowed very short term money on the open market, thus withdrawing it, and then invested this money in the Fed, similar to someone investing in stocks of a business.
A global currency would aggravate all the disastrous effects of national central banking enormously. There can’t be any doubt that the idea is nontheless becoming more and more palatable to world leaders. No matter how distant its potential fruition, individuals worldwide need to make sure these harmful aspirations are nibbed in the bud and reject the idea unconditionally.
What we need is the exact opposite. The global monetary system needs to become less centralized so as to increase and enhance regulation. We do need more regulation, not more government decrees, monopolies, and power that lead to less regulation. A global central bank would be just that. There simply is no better regulation of the global money and credit markets than Gold’s Honest Discipline. The history of money has shown us this time and again.