IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

[ThePythonicCow]

Reported by ZeroHedge this evening:

And all the pundits thought that the IMF would be on the hook for just €10 billion... The IMF has just announced that it is expanding its New Arrangement to Borrow (NAB) multilateral facility from its existing $50 billion by a whopping $500 billion (SDR333.5 billion), to $550 billion. The current lending participant group of 26 entities will be increased by 13 new members all of whom will contribute token amount of capital to the NAB. The one country most on the hook in the new and revised NAB - the United States of America, will provide over $105 billion in total commitments, or 20% of the total facility. The US is currently on the hook for just $10 billion, meaning its participation in global bail outs just increased by $95 billion. And the bulk of these bailouts will certainly be located across the Atlantic. What is most troublesome is the massive expansion of the NAR. If the IMF believes that over half a trillion in short-term funding is needed imminently, is all hell about to break loose.

More at: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion For "Contribution To Global Financial Stability".

Notice at the link that the BRIC nations have now joined those "funding" the IMF, with China third only to Japan and the U.S. in amount of support.

I remain convinced that:

• The current big bubble is U.S. Treasuries.
• The next big bubble is IMF paper.

I also expect that the transition from the Treasury bubble to the IMF bubble will coincide with a loss of reserve status for the U.S. Dollar and with some stressful event(s) on the American home front, in order to drive us into going along with this through fear. America will get a taste of an IMF austerity program before this is over.

The Treasury bubble has been abuilding over the last 30 years, underlying various shorter lived bubbles. The IMF bubble could be similarly long lived.

[medved]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

I remain convinced that:

* The current big bubble is U.S. Treasuries.
* The next big bubble is IMF paper.

I also expect that the transition from the Treasury bubble to the IMF bubble will coincide with a loss of reserve status for the U.S. Dollar and with some stressful event(s) on the American home front, in order to drive us into going along with this through fear. America will get a taste of an IMF austerity program before this is over.

The Treasury bubble has been building over the last 30 years, underlying various shorter lived bubbles. The IMF bubble could be similarly long lived.

I doubt, IMF is any match for the US. In the case of a crisis nothing outside of sheer geopolitical/military power can underline any credit system. Why is IMF better than EU? Only because the US is a part of it.

If the Treasury bubble bursts, we will have no credit system whatsoever. Inflation will be obvious and strong enough for the interest rates to go very high. Only US supported by its confiscatory and military power will be able to borrow any money in this “credit market”. Besides, US gov’t will decide who gets paid and how much (some banks, industries and states will be more equal than others).

Of course, payment in the fourth currency will be accepted by anybody.

In other words the credit system as we know it will cease to exist.

[ThePythonicCow]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

I doubt, IMF is any match for the US. ...
If the Treasury bubble bursts, we will have no credit system whatsoever.

If you look at the numbers in that article, the U.S. is just 19% of the total funding of the IMF. Japan is about another 18%. The BRIC nations are another 16% or so, up from 0% last week.

But I don't think it's primarily about nations anymore. It's about global financiers and their masters, running power and money. The nations become the participants, not the masters. My money (literally) is on the Treasury bubble bursting and another "credit" system, IMF/BIS centered, balancing the "credit arrangements" described in this article with larger IMF loans to the nation du jour in financial trouble, in exchange for that nations commitment to an austerity program. This increase in IMF funding from $50 to $550 Billion, and the inclusion now of all the major nations, is an indicator of the trend. An energy or carbon based global tax system will join this, if "they" can find a way. Presently, Americans are not even close to submitting to such insults, but "they" are working that "problem."

I will grant you however that I've been more "dark" sites than metalman would consider healthy, and that your view is the more reasonable and conventional view.

[ThePythonicCow]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

Of course, payment in the fourth currency will be accepted by anybody.

I doubt that's the end-state, at least not anytime in the next several decades. Be careful. Gold may peak as it did (in U.S. Dollars anyway) in the early 1980's. If I see the smoke start to clear on a new world monetary system, I expect to sell my gold (as soon as I can figure out what get instead.) Even that might be closing the barn door after my golden horse has been <s>stolen</s> sharply devalued, if the new regime includes some onetime hit on gold holdings, but that's a risk I'll likely take.

I'm betting (albeit hedged) that the global financiers and their masters have enough mojo to roll this paper game one more time at least (yea, though we may walk through the valley of the shadow of death to get there.)

[jtabeb]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

I expect to sell my gold (as soon as I can figure out what get instead.) Even that might be closing the barn door after my golden horse has been <S>stolen</S> sharply devalued, if the new regime includes some onetime hit on gold holdings, but that's a risk I'll likely take.

I'm betting (albeit hedged) that the global financiers and their masters have enough mojo to roll this paper game one more time at least (yea, though we may walk through the valley of the shadow of death to get there.)

Have a little faith Cow, not much, but a little faith.
(Besides, how many times do you get to see the global monetary system remade) Ooops! Sorry, this will be the third time since 1971! (Bad example, but have a little faith anyway, Life is like a box of gold and silver, you never know what it's gonna be worth, but you CAN GUESS):rolleyes:

[don]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

The 'recovery' of the IMF has truly been breathtaking. Just a few months ago no country in the world was on the hook to the IMF, first time in decades. That problem was quickly addressed.

Reminds me of the 'peace dividend' conundrum that was also laid to rest. Remember the pained expression on Daddy Bush's face when he publicly 'supported' the expected drastic cuts in defense spending. That was handed off to Slick Willie and off it went.

[Chomsky]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

Is Zerohedge ever right about anything?

[gnk]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

Jim Rickards described this evolution of the IMF on a King World News interview last January 9th:

http://www.kingworldnews.com/kingwor..._Rickards.html

(about halfway thru - 24 minute mark on...)

I think he is dead-on right. This is to eventually replace the global dollar paper standard in the case of collapse.

[ThePythonicCow]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

Have a little faith Cow, not much, but a little faith.

My first thought on reading that was "faith in what?".

Obviously I had not partaken of my morning coffee first.

Asking jtabeb what financial instrument to have faith in is like asking the Pope what spiritual entity to have faith in .

[metalman]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

Is Zerohedge ever right about anything?

built their rep by breaking the high-speed trading story... wrong ever since.

[sishya]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

Jim Rickards described this evolution of the IMF on a King World News interview last January 9th:

http://www.kingworldnews.com/kingwor..._Rickards.html

(about halfway thru - 24 minute mark on...)

I think he is dead-on right. This is to eventually replace the global dollar paper standard in the case of collapse.

Excellent Interview. I think ITuliper's should hear this audio Interview.
SDR is the way things are moving : dollar collapse leading to SDR. But how can they prevent it from moving to Gold rather than SDR.

I read somewhere "cathay pacific" giving SDR as "Liability for damage to Luggage"

http://downloads.cathaypacific.com/c...ofcarriage.pdf

"16.3.3 With respect to claims to which the Warsaw Convention applies, our liability in the case of Damage to checked Baggage shall be limited to 17 SDRs per kilogram and in the case of Damage to Unchecked Baggage 332 SDRs per passenger, or any higher sum agreed to by us pursuant to Article 9.7.1."

What Bullshit is this cathay pacific doing ? The Conspiracy theorists and "Bible Revelation believers" are looking smarter.

[Fiat Currency]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

The Conspiracy theorists and "Bible Revelation believers" are looking smarter.

This was written in 2001 ... ;) SDR Allocations and the Gold Price

[gnk]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

Excellent Interview. I think ITuliper's should hear this audio Interview.
SDR is the way things are moving : dollar collapse leading to SDR. But how can they prevent it from moving to Gold rather than SDR.

It is a great interview and I, too urge iTulipers to listen to it. Rickards also mentions - and I'm not sure if it's in this interview or another one, that when/if the dollar collpases, the price of gold will also be affected by a monetary vector - that is, gold will be money. In that scenario, he gives a price range of $4K - 11K an ounce. He arrives at those figures by simply dividing the money supply with the gold supply. The reason he gives a range is that he uses several monetary measurements as well as Central bank gold verse total gold numbers.

For those that don't know - Rickards was involved in the Iran hostage negotiations, and also was General Counsel at LTCM and was lead negotiator during that financial meltdown. So he's seen action firsthand.

[gnk]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

Why was this thread moved? I understand that the title is somehwat sensationalistic, but the fact that the IMF has expanded both membership and reserves (and significantly so) is monumental. This is likely a development agreed to by the G20 - a rather historic move in global cooperation and international trade and finance.

So why was it moved?

[ThePythonicCow]

Re: IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion

Why was this thread moved?

I have no "inside" knowledge (no private communications from FRED or EJ) on this, but I'm comfortable assuming this thread was moved because my interpretations were rant & rave conspiracy material. This site, like any coherent site on the web, has some views and variations thereon which are within its "world view" as possibilities, and casts some other views as "beyond the pale."

A well run site with a consistent and affective management can be no other way.

That's fine by me. We each draw our own lines as to what's possible and what's ridiculous. I am grateful for the management of iTulip allowing weird crap (in their reasonable view) a place, so long as it meets whatever other criteria (such as of decorum) they might require.

My own views of what's likely and what's ridiculous have changed so radically and so many times over the years that a tolerance for my own past views pretty much imposes on myself a tolerance for similar such views in others.