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Calls For Global Debt Jubilee Grow Louder As ‘Anything Goes’ Policy Mania Takes Over
Calls For Global Debt Jubilee Grow Louder As ‘Anything Goes’ Policy Mania Takes Over
About 140 global organizations and charities are calling for a worldwide Debt Jubilee to avoid some of the world’s poorest countries from collapsing into chaos amid the COVID-19 crisis, reported BBC News.
The British-based Jubilee Debt Campaign is leading the movement ahead of the G20 meeting this week.
“Developing countries are being hit by an unprecedented economic shock, and at the same time face an urgent health emergency,” said Sarah-Jayne Clifton, director of the Jubilee Debt Campaign.
“The suspension on debt payments called for by the IMF and World Bank saves money now, but kicks the can down the road and avoids actually dealing with the problem of spiraling debts.“
Clifton is urging for the immediate cancellation of 69 of the world’s poorest countries’ debt payments this year, which would free up at least $25 billion for the countries in 2020, and up to $50 billion if the jubilee was extended to the end of 2021.
“This is the fastest way to keep money in countries to use in responding to Covid-19, and to ensure public money is not wasted bailing out the profits of rich private speculators,” added Clifton.
The latest call for a Debt Jubilee should come as no surprise to ZeroHedge readers.
Over the last several decades, governments across the world have added insurmountable debts, leadingBill Buckler via The Privateer to say back in 2012 that the world has dived down a deep hole and into a trap that has “ensnared Japan more than two decades ago.”
…click on the above link to read the rest of the article…
IMF Prepares $1 Trillion Bazooka
IMF Prepares $1 Trillion Bazooka
The IMF has just fired off a trillion-dollar “bazooka” of its own Monday morning.
In a blog post published minutes ago, IMF Director Kristalina Georgieva issued three “policy prescriptions” that she said should define a “coordinated response” from the developed economies in Europe and the US. In addition to declaring that the IMF has $1 trillion in loan capacity ready to put to work to salve the economic damage caused by the outbreak, Georgieva encouraged governments to spend more, and asked the Fed to consider bulking up its dollar FX swap lines to emerging-market central banks. She also noted that the $42 billion that investors have pulled from EM markets is one of the biggest outflows in history, and will certainly ratchet up financial stressors.
Read the full post below:
* * *
Today, the IMF published a set of policy recommendations that can help guide countries in the difficult days ahead.
What more needs to be done?
Three action areas for the global economy:
First, fiscal.
Additional fiscal stimulus will be necessary to prevent long-lasting economic damage.
Fiscal measures already announced are being deployed on a range of policies that immediately prioritize health spending and those in need. We know that comprehensive containment measures—combined with early monitoring—will slow the rate of infection and the spread of the virus.
Governments should continue and expand these efforts to reach the most-affected people and businesses—with policies including increased paid sick leave and targeted tax relief.
Beyond these positive individual country actions, as the virus spreads, the case for a coordinated and synchronized global fiscal stimulus is becoming stronger by the hour.
During the Global Financial Crisis (GFC), for example, fiscal stimulus by the G20 amounted to about 2 percent of GDP, or over $900 billion in today’s money, in 2009 alone. So, there is a lot more work to do.
Second, monetary policy.
…click on the above link to read the rest of the article…
Are the World Elite Using a Rise in Nationalism to Reassert Globalisation?
Are the World Elite Using a Rise in Nationalism to Reassert Globalisation?
Putting yourself in the mind of someone who commits an act of illegality is perhaps the only way we can begin to understand the motivation behind the transgression. A common reflex reaction to the most heinous of crimes is to simply call for the perpetrator to be removed from society and put in prison. Out of sight, out of mind. Whilst this is not an unreasonable expectation, it does not get to the root of why he or she became a criminal.
We can take a similar stance when it comes to globalism. If a self appointed elite who permeate institutions like the Bank for International Settlements and the IMF share a desire to concentrate world power through a centralised network of global governance, rather than simply rebel against this vision is it not equally as important to try and understand the vision from the perspective of those who created it? I would argue that to comprehend the minds of global planners it is necessary to mentally place yourself into their way of thinking.
A couple of years ago I published an article called, Order Out of Chaos: A Look at the Trilateral Commission, where I examined some of the key motivations behind this particular institution’s goals. I quoted past members of the Commission openly rejecting national sovereignty and championing the interdependence of nations. One of those quotes was from Sadako Ogata, a former member of the Trilateral Commission’s Executive Committee, who at an event to mark 25 years of the institution remarked how ‘international interdependence requires new and more intensive forms of international cooperation to counteract economic and political nationalism‘.
…click on the above link to read the rest of the article…
IMF Slashes Global GDP Forecast For 6th Consecutive Time, Warns “Climate Change” Will Hit Economy
IMF Slashes Global GDP Forecast For 6th Consecutive Time, Warns “Climate Change” Will Hit Economy
After the IMF cut its global economic outlook for 2019 to 2.9% in October, the lowest since the financial crisis, and warned that global trade growth would be “close to a standstill”, moments ago the IMF once again downgraded its forecast for global GDP for 2020 and 2021, its sixth straight reduction, although in a sliver of optimism, global GDP in 2020 is now expected to post a modest rebound from 2.9% to 3.3%, (down from 3.4% in October) and to 3.4% in 2021 (down from 3.6%) as the IMF says “there are now tentative signs that global growth may be stabilizing, though at subdued levels.”
According to the IMF, the downward revision primarily reflects negative surprises to economic activity in a few emerging market economies, most notably India, where 2020 GDP is now expected to rise just 5.8% down from 7.0%, which means that in 2020 China will regain the title of the world’s fastest growing economy. In a few cases, this reassessment also reflects the impact of increased social unrest.
Emerging market debacle aside, the IMF said that on the positive side, market sentiment “has been boosted by tentative signs that manufacturing activity and global trade are bottoming out, a broad-based shift toward accommodative monetary policy, intermittent favorable news on US-China trade negotiations, and diminished fears of a no-deal Brexit, leading to some retreat from the risk-off environment that had set in at the time of the October WEO.”
However, and this will be of particular interest to traders, even the IMF admitted that “few signs of turning points are yet visible in global macroeconomic data.”
And so, in addition to the collapse in India, the IMF also sees continued slowdown in the US and Europe in 2020, both of which were cut by 0.1% to 2.0% and 1.3%, while China saw a modest increase by 0.2% to 6.0%, which however drops to 5.8% in 2021.
IMF Chief Warns Global Economy Faces New “Great Depression”
IMF Chief Warns Global Economy Faces New “Great Depression”
How’s this for some New Years optimism?
The new head of the IMF, who took over from Christine Lagarde in November, warned that the global economy could soon find itself mired in a great depression.
During a speech at the Peterson Institute, IMF Chairwoman Kristalina Georgieva compared the contemporary global to the “roaring 20s” of the 20th century, a decade of cultural and financial excess that culminated in the great market crash of 1929.
According to the Guardian, this research suggests that a similar trend is already under way, and though the collapse might not be around the corner, when it comes, it will be impossible to avoid.
While the inequality gap between countries has closed over the last two decades, the gap within most developed countries has widened, leaving millions more vulnerable to a global downturn than they otherwise would have been.
In particular, she singled out the UK for criticism: “In the UK, for example, the top 10% now control nearly as much wealth as the bottom 50%. This situation is mirrored across much of the OECD (Organisation for Economic Co-operation and Development), where income and wealth inequality have reached, or are near, record highs.”
She also warned about the potential for climate change to become a bigger obstacle for humanity, while increased trade protectionism instills more volatility in markets.
She added: “In some ways, this troubling trend is reminiscent of the early part of the 20th century – when the twin forces of technology and integration led to the first gilded age, the roaring 20s, and, ultimately, financial disaster.”
She warned that fresh issues such as the climate emergency and increased trade protectionism meant the next 10 years were likely to be characterised by social unrest and financial market volatility.
…click on the above link to read the rest of the article…
Ukraine’s IMF Gold and the Gold Carry Trade
Ukraine’s IMF Gold and the Gold Carry Trade
Important Tools for the Monetary Cartel
Let’s first consider a typical International Monetary Fund (IMF) loan to a sovereign in trouble, and then examine a typical gold carry trade transaction to support a sovereign arms deal. The intent is to demonstrate the importance of physical sovereign gold holdings in all forms of international trade.
Semi-failed and failed states can only exist by dealing in hard assets of real intrinsic value just as Syria, Venezuela, Iran, and Ukraine have done… and the most liquid of those hard assets is their physical gold.
Central Banks always work with the Security State apparatus when dealing with failed states and recall that the US Central Intelligence Agency funded al Qaeda and funded the war in Syria for example. Just about anything can be made to happen with funding when that funding is based on real resources. One of the most important of those resources is physical gold.
IMF Cartel Example: Ukraine
The IMF’s 2014 aid to Ukraine is based on a unique history however all IMF ‘aid’ packages are in some sense unique. Since we are highlighting the largely hitherto concealed importance of real physical gold in geo-political calculations and operations, Ukraine provides a relevant and timely example of how the banking Cartel operates with gold and may highlight that importance.
According to the 2018 Independent Transparency Index, Ukraine ranks as one of the most corrupt nations in the world. Ukraine ranks 120th out of 180 countries where the 180th – Somalia – is the most corrupt. But all nations need funding whether corrupt or not, and Ukraine defaulted on its IMF debt in 2001 and then again in 2009 when distribution of an existing IMF loan to Ukraine was frozen.
…click on the above link to read the rest of the article…
The Allure and Limits of Monetized Fiscal Deficits
The Allure and Limits of Monetized Fiscal Deficits
With the global economy experiencing a synchronized slowdown, any number of tail risks could bring on an outright recession. When that happens, policymakers will almost certainly pursue some form of central-bank-financed stimulus, regardless of whether the situation calls for it.
NEW YORK – A cloud of gloom hovered over the International Monetary Fund’s annual meeting this month. With the global economy experiencing a synchronized slowdown, any number of tail risks could bring on an outright recession. Among other things, investors and economic policymakers must worry about a renewed escalation in the Sino-American trade and technology war. A military conflict between the United States and Iran would be felt globally. The same could be true of “hard” Brexit by the United Kingdom or a collision between the IMF and Argentina’s incoming Peronist government.
Still, some of these risks could become less likely over time. The US and China have reached a tentative agreement on a “phase one” partial trade deal, and the US has suspended tariffs that were due to come into effect on October 15. If the negotiations continue, damaging tariffs on Chinese consumer goods scheduled for December 15 could also be postponed or suspended. The US has also so far refrained from responding directly to Iran’s alleged downing of a US drone and attack on Saudi oil facilities in recent months. US President Donald Trump doubtless is aware that a spike in oil prices stemming from a military conflict would seriously damage his re-election prospects next November.
The United Kingdom and the European Union have reached a tentative agreement for a “soft” Brexit, and the UK Parliament has taken steps at least to prevent a no-deal departure from the EU. But the saga will continue, most likely with another extension of the Brexit deadline and a general election at some point.
…click on the above link to read the rest of the article…
Innovation BIS 2025: A Stepping Stone Towards an Economic ‘New World Order’
Innovation BIS 2025: A Stepping Stone Towards an Economic ‘New World Order’
The IMF’s annual meetings held in Washington DC last week demonstrated that when the institution issues new economic projections or warnings of a downturn, the mainstream press are not averse to giving them prominent coverage. After the Fund was founded in 1944 (off the back of World War Two), it became part of what internationalists call the ‘rules based global order‘. For 75 years, the IMF has been regarded by the political establishment and banking elites as a lynch pin of the world financial system.
Contrary to what some may believe, the IMF was not the first global monetary institution. That accolade belongs to the Swiss based Bank for International Settlements, which predates the IMF by fourteen years. Its creation in 1930 was, according to the BIS, primarily to settle reparation payments ‘imposed on Germany following the First World War‘. Without WWI – a major crisis event – there would have been no mandate for the BIS to exist. Much as there would have been no mandate for the IMF to exist were it not for the spectre of WWII.
As well as settling German reparation payments, the BIS was also recognised from the outset as a forum for central bankers – the first of its kind – where they could speak candidly and direct the course of global monetary policy.
The board of directors at the BIS is taken up predominantly by the heads of the leading central banks in the world. Right now the governor of the German Bundesbank Jens Weidmann is chairman of the board. As public servants they gather in Basel every eight weeks or so for a series of bimonthly meetings, the discussions from which ordinary citizens are not privy to.
…click on the above link to read the rest of the article…
“Close To A Standstill”: IMF Warns Global Growth Will Be Cut To Lowest Since Lehman
“Close To A Standstill”: IMF Warns Global Growth Will Be Cut To Lowest Since Lehman
Don’t expect any good news next week when the IMF holds its annual meeting and releases its latest World Economic Outlook report due on October 15.
According to the IMF’s new head, Bulgarian Kristalina Georgieva, the monetary fund will again cut its growth forecast for both 2019 and 2020; as a reminder back in July, the IMF again cut its projection for 2019 GDP growth to 3.2% this year and 3.5% next year, its fourth downgrade since last October, and the lowest since the financial crisis amid ever-escalating trade war. In fact, according to Georgieva, who apparently was brought in to take the blame for Lagarde’s disastrous legacy, global trade growth “is close to a standstill”, which last time we checked was 0%.
It means we are about about to have a new entry in the “worst since Lehman” category.
By now it is no secret to anyone that everyone – global institutions, economists and investors – have blamed the U.S.-China tariff war as the main reason for slowing global growth (and catalyst behind upcoming QE). The trade tensions have partly caused manufacturing to tumble and weakened investment, creating a “serious risk” of spillover to other areas of the economy like services and consumption, Georgieva said on Tuesday according to Bloomberg.
“The global economy is now in a synchronized slowdown,” she said, noting that the fund estimates that 90% of of the world is seeing slower growth. This is a huge change to the global economy from two years ago, when growth was accelerating across three-quarters of the globe in a synchronized upswing.
…click on the above link to read the rest of the article…
The Club & Why the Majority Must be Always Wrong
The Club & Why the Majority Must be Always Wrong
QUESTION: Mr. Armstrong; I did my own research on the 1998 Russian collapse. All the big names lost billions. Even the New York Times reported that George Soros lost $2 billion. You were the only one who made money so it made sense that you were named hedge fund manager of the year in 1998. My question is this. Since all the big names were involved in the Russia trade which took down Long-Term Capital Management, is this why you call them the “club” for they all do seem to be involved in the same trade?
DU
ANSWER: Correct. This is also why they try to prevent people from listening to me. They are convinced that the reason they lost was that I was too influential and had too many institutions listening to me. That absurdity is what they ran to the government with, so I was then accused of “manipulating” the world economy. They all lost after I warned them and refused to join in their takeover of Russia I believe I was given the nod by the Clintons. They told me they had the IMF in their back pocket and they would continue to fund Russia. I warned them that the IMF got their funding from governments and they were not going to back it.
The Russian financial crisis hit Russia on the 17th of August 1998. Our World Economic Conference was held in London that June. Our forecast was then published by the London Financial Times on the front page of the second section.
They did not give up. After they got the Federal Reserve to bail them out, they then focused on setting up Yeltsin and got him to divert $7 billion in IMF loans. Even CNN reported the money was stolen from the IMF.
CNN Theft of IMF Money – Sep. 1, 1999
…click on the above link to read the rest of the article…
Argentina Imposes Currency Controls
Argentina Imposes Currency Controls
Late on Friday, when we noted that according to Argentina’s next president, Alberto Fernandez, the country’s upcoming bond default, its 9th since declaring Independence, was the IMF’s fault as much as that of outgoing president Mauricio Macri, we pointed out that Buenos Aires has a more pressing problem: running out of money.
Specifically, we noted that “the central bank has spent close to $1.5 billion to meet rising demand for dollars since mid-August, or about 10% of its net foreign-currency reserves. Worse, according to calculations by First Geneva Capital Partners, Argentina will drain its net foreign currency reserves within the month if it continues spending dollars at the current rate.” “So”, we concluded, “Buenos Aires has a choice: watch as its currency becomes the next Bolivar, or run out of dollars in days.”
Two days later Buenos Aires, still not quite sure which path to pursue, did the only thing it could do to avoid a full-blown financial collapse: impose capital controls, which “oddly enough” appears to be a now standard development almost every time the IMF comes in to “rescue” an insolvent nation. Incidentally, without those generous (and record) IMF loans, Argentina would have run out of reserves by now.
As Reuters reports, citing a decree published in an official bulletin on Sunday, the Argentine government authorized the central bank to restrict currency purchases. The decree includes major exporters, which will need permission from the central bank to access the FX market to purchase foreign currency and make transfers abroad. The central bank will also set a deadline for exporters to repatriate foreign currency.
Things went from terrible to even worse last week, when Argentina defaulted on creditors to local short-term debt on Wednesday, at which point Argentina also said it will ask holders of $50 billion of longer-term debt to accept a “voluntary reprofiling.” It also plans to renegotiate payments on nearly $50 billion it has borrowed from the International Monetary Fund.
…click on the above link to read the rest of the article…
Argentina Is Officially In Default Again: S&P Downgrades Credit Rating To SD
Argentina Is Officially In Default Again: S&P Downgrades Credit Rating To SD
The IMF just broke its own record of incompetence: less than a year after its record, $57 billion bailout of Argentina was finalized, S&P just downgraded the country from B- to Selective Default – the equivalent to a default rating – following the government’s “reprofiling” of its debt on August 28, when it unilaterally extended the maturity of all short-term paper due to the continued inability to place short-term paper with private-sector market participants. Some $101 billion in debt is affected.
However, the selective default state will last for just one day, as only a few hours later, S&P will upgrade Argentina from SF to CCC-. As S&P explains, “under our distressed exchange criteria, and in particular for ‘B-‘ rated entities, the extension of the maturities of the short-term debt with no compensation constitutes a default. As the new terms became effective immediately, the default has also been cured. Therefore, we plan to raise the long-term ratings to ‘CCC-‘ and the short-term ratings to ‘C’ on Aug. 30, in line with our policies.”
Here is the full summary of today’s action, per S&P:
- Following the continued inability to place short-term paper with private-sector market participants, the Argentine government unilaterally extended the maturity of all short-term paper on Aug. 28. This constitutes default under our criteria, and we are lowering the local and foreign currency sovereign credit ratings to ‘SD’ and the short-term issue ratings to ‘D’.
- The administration is also sending legislation to Congress seeking support from the Argentine political class to engage in a re-profiling of the remaining debt, so we are lowering our long-term foreign and local currency issue ratings to ‘CCC-‘ on heightened risk of a default under our criteria.
…click on the above link to read the rest of the article…
Argentina Proposes IMF-Humiliating ‘Debt Re-Profile’ As It Soft-Defaults For 9th Time Since Independence
Argentina Proposes IMF-Humiliating ‘Debt Re-Profile’ As It Soft-Defaults For 9th Time Since Independence
Less than a week after we suggested The IMF is in for humiliation over the collapse of Argentina – just months after its unprecedented $56 billion liquidity crisis bailout – it appears the South American nation is set to default for the ninth time since its independence in 1816.
Amid a 20% crash in the peso and a collapse in government bonds, which pushed the implied risk of default above 80%, IMF delegates arrived in Argentina on Saturday and, as Bloomberg reports, immediately began meetings with policy makers, facing a deja vu choice from two decades ago: risk making the turmoil even worse by withholding a $5.3 billion installment due next month – or cough it up, and risk even more losses with the IMF bailout program on the verge of collapse.
“The IMF has put a lot in – not just money, but prestige,” said Hector Torres, a former executive director at the Fund who represented South American countries.
“The fact that the arrangement is not performing well right now is an embarrassment,” he said. And the September installment is “going to be a difficult call.”
Then earlier today, things got worse as Argentina bond spreads widened to the most in 14 years after opposition leader Alberto Fernandez ripped the debt-laden country’s accord with the International Monetary Fund. Fernandez said much of the IMF loan had been wasted on financing capital flight out of the country.
In a statement following a meeting with IMF officials, Fernandez said he agreed with the objectives of the IMF deal, but added that the IMF and the current government generated the current crisis and are now responsible for reversing the “social catastrophe.”
Why Mark Carney Thinks The Dollar Can No Longer Be The World’s Reserve Currency
Why Mark Carney Thinks The Dollar Can No Longer Be The World’s Reserve Currency
While Jerome Powell’s highly anticipated Jackson Hole speech was, in the words of Brean Capital’s Russ Certo “underwhelming and anti-climatic”, one couldn’t say the same for the shocking luncheon speech by Bank of England’s outgoing governor, Mark Carney, titled “The Growing Challenges for Monetary Policy in the current International Monetary and Financial System“, where he dedicated no less than 23 pages to a stunning – for a central banker – cause: to describe why the dollar’s “destabilizing” reserve status role in the world economy has to end, and why central banks need to join together to create their own replacement reserve currency, one potentially tied to Facebook’s new “stablecoin” Libra, although in reality any “Synthetic Hegemonic Currency” as Carney defined it would do.
But first, a quick tangent: the reason we say Carney’s speech was shocking is not for what it proposes – after all, we have long argued that a world in which the dollar’s reserve currency status would be stripped away by the establishment and granted to some alternative – whether gold, or a basket of currencies like the IMF’s SDR, or a cryptocurrency like bitcoin – is coming in posts such as:
- “Game Changer” – Is Libra The Trojan Horse For An SDR-Backed Redesign Of The Global Financial System?
- Did The IMF Reveal That Cryptocurrency Is The New World Order End-Game?
- Bank Of England Boss: China’s Renminbi Will Rival The Dollar As Global Reserve Currency
The argument behind all these articles is simple and two-fold: i) in a fiat world, one can only devalue relative to some other currency, yet we have now reached a point where (as Pimco suggested two years ago when it said the Fed should buy gold to devalue the dollar against it) every currency needs to devalue relative to some hard index outside of the monetary system…
…click on the above link to read the rest of the article…
Blain’s Morning Porridge – Aug 13 – Argentina, Legarde and Europe
Blain’s Morning Porridge – Aug 13 – Argentina, Legarde and Europe
“I’m going down to Yasgur’s farm, gonna join me a rock and roll band.…”
Global Credibility Under Pressure – We’ve been Tangoed!
This morning’s headlines are screaming how Argentina and President Mauricio Macri have precipitated yet another crisis upon the stressed geopolitical battlefront… Relax. We are more than used to dealing with Argentina defaults… But, its far more complex than that. The latest Argentina Dance Macabre is all about Global Credibility. It’s another Massive Fail!
What does it say about the credibility of Global Institutions and Policy when Argentina’s whole market collapsed following a primary for an election in December? Ex-IMF president, and soon to be head of the ECB, Christine Lagarde personally staked her support for President Mauricio Macri’s pro-market government when she steamrollered through the IMF’s biggest ever bailout of $56 billion for Argentina last year.
It now looks an extremely poor call on Lagarde’s part. Macri won a mere 32% of the vote, while former president Cristina Fernandez de Kirchner won 47%. Don’t Cry for Me Argentina indeed… Domestic Argentine Politics have left the IMF looking stupid.
There are three major issues to consider here:
First there is the absolute predictability of what’s just happened in Argentina:
In return for the 2018 Bailout, the IMF demanded its usual pound of flesh policies: Austerity, Austerity and Austerity, spiced with inflation-targeted monetary policy, fiscal tightening, currency controls, and the keys to the Peso printing presses. Give Lagarde some credit – she did give lip service to the people with a smattering of minor austerity mitigants in terms of gender equality and social provision. But, essentially the IMF’s answer to yet another predictable Argentinian crisis was more of the same programme. You know the definition of madness…
…click on the above link to read the rest of the article…
