International Monetary Fund: ‘Time is Running Out’

September 26, 2011 by · Leave a Comment
Filed under: Global News 

IMF sees this next round of de-leveraging as a not so positive thing.   I see it as a very positive thing.  We have way too much debt in the system, well beyond anything meaningful restructuring would do.   Yes, default has pains associated with it but in the long run this is what “is” going to happen to get balance back into the financial system and the economy on a whole.  We can not socialize these losses on national balance sheets.

The problem is that these liabilities are so large that they actually do seriously impair a countries federal balance sheet vis a vie their central bank.  We need to just own up the problem and force these bad actors no matter who they are and how big they are to shallow these losses and write them off.   If they do some systemically important function, we create a unit to keep that portion going but the share and bond holders need to take these losses.  I have nothing against banks, when they do their function prudently, they are a great asset.  This is just what the right move is for the majority.

If we do not take this course of action then we are going to suffer a fate that has much higher unemployment and prices in it.    Is that what you want, sound off?

Fox Business (Adam Samson) – The stumbling global economic recovery and deepening euro zone sovereign debt crisis pose a heightened risk to financial markets in advanced economies, the International Monetary Fund said Wednesday, calling for swift government action.

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IMF’s Strauss-Kahn Seeks Recovery First “Then” Deal With Inflation

September 28, 2009 by · Leave a Comment
Filed under: Economic News 

Here you have it, I have been saying we are going to have a bout of inflation in a period of high unemployment and stagnating incomes.  Here is the quote from the International Monetary Fund’s (IMF) Managing Director, “Going out of the crisis will have consequences, we need to discuss an exit strategy,  But we need to secure the recovery before we address the problem” of inflation“.  To follow up, former Federal Reserve Chairman Alan Greenspan in a video conference made this statement as well, “In the next two to three years, we are going to have serious problems“.

With that being said, it fits with what statements have been made here against all these bailouts that were in effect “kicking the can” down the street and in my opinion, making the problem even worse that have not create large liabilities for the U.S. Government that  has affect our credit in the international community.  This weekend I wrote my “Theory of Deinflation” that addresses some of these issues in a manner to try and explain what is happening now and what we will see in the future.  (The Theory will be expanded as more thought is put into the subject).

Bloomberg, Kiev – Former U.S. Federal Reserve Chairman Alan Greenspan expressed concern over inflation, while Dominique Strauss-Kahn, the International Monetary Fund’s managing director, speaking to the Yalta European Conference in southern Ukraine, suggested first securing an economic recovery.
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Recession likely to be longer according to International Monetary Fund

April 16, 2009 by · Leave a Comment
Filed under: Opinion 

I agree with their assessment.  The more will bailout the bad actors in this situation the longer it will be until trust is restored in our markets and that is the single most important step in getting banks to restore a normal level of credit in our markets.  Hopefully our representatives will realize this and do what is right.  Criminal charges are in order as well, you don’t pull something of this scale without breaking some laws.  There is no easy answer to this crisis but this is when we can shine and do the right thing.

News (Reuters):

The current global recession is likely to be unusually long and severe and the recovery sluggish since it sprang from a financial crisis, the International Monetary Fund said on Thursday.

The IMF called for aggressive and coordinated monetary and fiscal policies, and said restoring confidence in the financial sector was important for economic policies to work and for a recovery to take hold.

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China calls for new global currency to replace dollar

March 24, 2009 by · Leave a Comment
Filed under: Currency News 

The calls for a replacement to the dollar is getting more pronounced everyday.  China has really pushed for the IMF to use SDRs (Special Drawings Rights) as the super-sovereign currency used between governements.  I am not in favor of giving any international agency this type of power.  When you concentrate power, it makes it much easier to abuse.  

I understand why the call for these changes are coming, being that we are the de facto reserve currency, our domestic monetary polices are devaluing the dollar.  We should not look to bailout and look more to preserve our currency on the world market and let the market take care of the mal-investment.

News (AP):

China is calling for a new global currency controlled by the International Monetary Fund, stepping up pressure ahead of a London summit of global leaders for changes to a financial system dominated by the U.S. dollar and Western governments.

The comments, in an essay by the Chinese central bank governor released late Monday, reflect Beijing’s growing assertiveness in economic affairs. China is expected to press for developing countries to have a bigger say in finance when leaders of the Group of 20 major economies meet April 2 in London to discuss the global crisis.

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IMF poised to print billions of dollars in ‘global quantitative easing’

March 18, 2009 by · Leave a Comment
Filed under: Currency News 

This is a interesting article, what I want to know is how the IMF is getting the ability to issue currency like a central bank?  As stated in the article, they will be issuing SDR’s (Special Drawing Rights).  Here is a fun quote: “The principle behind it is that everyone would get bonus dollars and instead of the Federal Reserve having to print them, everyone gets them.” and to take the cake “The objective is to create a windfall of cash. However if everybody goes out and spends the money it could be very inflationary.”  No need to be worried about secret plans via the “Shadow Banking System” when they are all being publicly displayed.

News:

The International Monetary Fund is poised to embark on what analysts have described as “global quantitative easing” by printing billions of dollars worth of a global “super-currency” in an unprecedented new effort to address the economic crisis.

Alistair Darling and senior figures in the US Treasury have been encouraging the Fund to issue hundreds of billions of dollars worth of so-called Special Drawing Rights in the coming months as part of its campaign to prevent the recession from turning into a global depression.

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