Home » Posts tagged 'World Bank' (Page 4)

Tag Archives: World Bank

The annual governors’ meeting of the International Monetary Fund and the World Bank opened on October 5 in Peru’s capital city. In the meeting, an estimated 800 representatives from 188 countries were negotiating the shape of the world’s soon-to-be renovated finance infrastructure.

While the international media focused on the official meetings, no news outlets outside of Latin America have mentioned the Plataforma Alternativa conference — a parallel three-day meeting organized under the theme “Belying the ‘Peruvian Miracle.’”

More than 1,200 people attended Plataforma Alternativa’s conference. Dozens of young volunteers zoomed through the marbled hallways of Lima’s Hotel Bolívar, which hosted the conference. Participants represented dozens of organizations and countries as diverse as the Netherlands, China, the United States, Belgium, Zimbabwe, Colombia, Indonesia, Spain, Mexico, the Philippines, Germany, Palestine and Argentina.

On Friday, an estimated 5,000 people marched across 70 blocks in Lima, from Plaza San Martín to the first of three police perimeters around the official conference. Groups at the protest included indigenous feminist organizations, the Lima-based Comando Feminista, Bloque Hip Hop, worker unions, the Peruvian Campesino Confederation, and dozens of others.

Peru reportedly mobilized 20,000 police for this event, many of whom were safeguarding key areas around the city for the 12,000 visitors: from the airport to hotel areas.

The counter-conference was free, open to the public, and streamed online. It featured U.S. economist Joseph Stiglitz, a former World Bank chief economist and an outspoken critic of its policies, as its keynote speaker.

“Inequality is a choice — not the result of inevitable economic laws,” Stiglitz said in his speech after reminding the audience that Latin America has the highest rate of wealth disparity among world regions. At the end of September, Oxfam — one of several organizations in charge of the conference — released a report indicating that, at the current pace, one percent of Latin Americans would be wealthier than the remaining 99 percent by 2022.

…click on the above link to read the rest of the article…

Bubbles Always Burst: the Education of an Economist

September 28, 2015

Bubbles Always Burst: the Education of an Economist

I did not set out to be an economist. In college at the University of Chicago I never took a course in economics or went anywhere near its business school. My interest lay in music and the history of culture. When I left for New York City in 1961, it was to work in publishing along these lines. I had worked served as an assistant to Jerry Kaplan at the Free Press in Chicago, and thought of setting out on my own when the Hungarian literary critic George Lukacs assigned me the English-language rights to his writings. Then, in 1962 when Leon Trotsky’s widow, Natalia Sedova died, Max Shachtman, executor of her estate, assigned me the rights to Trotsky’s writings and archive. But I was unable to interest any house in backing their publication. My future turned out not to lie in publishing other peoples’ work.

My life already had changed abruptly in a single evening. My best friend from Chicago had urged that I look up Terence McCarthy, the father of one of his schoolmates. Terence was a former economist for General Electric and also the author of the “Forgash Plan.” Named for Florida Senator Morris Forgash, it proposed a World Bank for Economic Acceleration with an alternative policy to the existing World Bank – lending in domestic currency for land reform and greater self-sufficiency in food instead of plantation export crops.

My first evening’s visit with him transfixed me with two ideas that have become my life’s work. First was his almost poetic description of the flow of funds through the economic system. He explained why most financial crises historically occurred in the autumn when the crops were moved. Shifts in the Midwestern water level or climatic disruptions in other countries caused periodic droughts, which led to crop failures and drains on the banking system, forcing banks to call in their loans.

…click on the above link to read the rest of the article…

Mede-Jean, Not Medellin

September 7, 2015

Mede-Jean, Not Medellin

Driving the back streets of Medellin a few weeks ago I found it interesting to see the various little pockets to the city. In the poor parts of town I noticed on a couple of occasions taxi drives running their vehicles on empty. I’ve seen this before in countries where there is a lack of sufficient working capital to be able to keep the tank full. Disposable income is low or non-existent…

There are, however, pockets where we found the burgeoning middle class which give credence to the statistical numbers. Here there are delightful tree lined neighborhoods, boutique art stores, restaurants, coffee shops and Land Cruisers beginning to cramp up the streets of Medellin. Colombia has indeed a rising and growing middle class, though there still exists a large disparity in wealth.

View over Poblado, Medellin

One measure used by economists to determine this ratio of rich to poor is the Gini coefficient. A Gini score of 0 would mean a perfect distribution of income and expenditure in a society and a number of 100 represents absolute inequality. This has important ramifications as often there exists a higher propensity for civil unrest as the number gets higher. Conversely the lower this number, the more equal and oftentimes stable a country. Colombia, according to the World Bank, sport a score of 53.5, though this is taken from 2012. I suspect this figure is actually lower today – it’s been falling each year since early 2000s.

The trend appears to be going in the right direction…

We’ve had our eye on Colombia for some time. One reason we haven’t jumped in earlier is that we’ve been cognizant that it’s a resource economy and when we first began taking notes we were already a decade into the resource bull market. Not optimum!

…click on the above link to read the rest of the article…

Exorbitant Privilege: “The Dollar is Our Currency but Your Problem”

September 4, 2015

Exorbitant Privilege: “The Dollar is Our Currency but Your Problem”

The Global Monetary Architecture: Change is on the Horizon

There is no better way to descibe the international monetary system today than through the statement made in 1971 by U.S. Treasury Secretary, John Connally. He said to his counterparts during a Rome G-10 meeting in November 1971, shortly after the Nixon administration ended the dollar’s convertibility into gold and shifted the international monetary system into a global floating exchange rate regime that, “The dollar is our currency, but your problem.” This remains the U.S. policy towards the international community even today. On several occasions both the past and present chairpersons of the Fed, Ben Bernanke and Janet Yellen, have indicated it still is the U.S. policy as it concerns the dollar.

vying Two empires vying for supremacy?

Is China saying to the world, but more particularly to the U.S., “The yuan is our currency but your problem”? China’s move to weaken the Yuan against the US dollar is in fact a huge response to America’s resistance to reforming the international monetary framework. It’s telling American policy makers that the longer they delay acting on reforming the international monetary system, the harder and longer they are going to make it for the U.S. to climb out of their trade deficit and depreciate their currency to where they need it to be.

China has been preparing for this moment for several years by accumulating gold through its central bank but also by using banks/corporations and individuals. It has in recent years signed several international agreements to bypass the US dollar in international trade and use preferably the Yuan. It has created an alternative World Bank (Asian Infrastructure Investment Bank) and a gold fund to invest in gold mining in more than 60 countries.

…click on the above link to read the rest of the article…

Trouble South Of The Border

August 27, 2015

Trouble South Of The Border

Mexico’s vulnerabilities pose a huge risk to the U.S.

Too big to fail is a seven-year phenomenon created by the most powerful central banks to bolster the largest, most politically connected US and European banks. More than that, it’s a global concern predicated on that handful of private banks controlling too much market share and elite central banks infusing them with boatloads of cheap capital and other aid. Synthetic bank and market subsidization disguised as ‘monetary policy’ has spawned artificial asset and debt bubbles – everywhere. The most rapacious speculative capital and associated risk flows from these power-players to the least protected, or least regulated, locales.

The World Bank and IMF award brownie points to the nations offering the most ‘financial liberalization’ or open market, privatization and foreign acquisition opportunities. Yet, protections against the inevitable capital outflows that follow are woefully inadequate, particularly for emerging markets.

The financial world has been focused largely on the volatility of countries like China and Greece recently. But Mexico, the third largest US trading partner (after Canada and China), has tremendous exposure to big foreign banks, and the largest concentration of foreign bank ownership of any country in the world (mostly thanks to NAFTA stipulations.)

In addition, the latitude Mexico has provided to the operations of these foreign financial firms means the nation is more exposed to the fallout of another acute financial crisis (not that we’ve escaped the last one).

There is no such thing as isolated “Big Bank” problems. Rather, complex products, risky practices, leverage and co-dependent transactions have contagion ramifications, particularly in emerging markets whose histories are already lined with disproportionate shares of debt, interest rate and currency related travails.

Mexico has benefited to an extent from its proximity to the temporary facade of US financial health buoyed by Fed policy, but as such, it faces grave dangers should any artificial bubble pop, or should the value of the US dollar or US interest rates rise.

…click on the above link to read the rest of the article…

US Military Uses IMF and World Bank to Launder 85% of Its Black Budget

August 14, 2015

US Military Uses IMF and World Bank to Launder 85% of Its Black Budget

Though transparency was a cause he championed when campaigning for the presidency, President Obama has largely avoided making certain defense costs known to the public. However, when it comes to military appropriations for government spy agencies, we know from Freedom of Information Act requests that the so-called “black budget” is an increasingly massive expenditure subsidized by American taxpayers. The CIA and and NSA alone garnered $52.6 billion in funding in 2013 while the Department of Defense black ops budget for secret military projects exceeds this number. It is estimated to be $58.7 billion for the fiscal year 2015.

What is the black budget? Officially, it is the military’s appropriations for “spy satellites, stealth bombers, next-missile-spotting radars, next-gen drones, and ultra-powerful eavesdropping gear.”

However, of greater interest to some may be the clandestine nature and full scope of the black budget, which, according to analyst Catherine Austin Fitts, goes far beyond classified appropriations. Based on her research, some of which can be found in her piece “What’s Up With the Black Budget?,” Fitts concludes that the during the last decade, global financial elites have configured an elaborate system that makes most of the military budget unauditable. This is because the real black budget includes money acquired by intelligence groups via narcotics trafficking, predatory lending, and various kinds of other financial fraud.

The result of this vast, geopolitically-sanctioned money laundering scheme is that Housing and Urban Devopment and other agencies are used for drug trafficking and securities fraud. According to Fitts, the scheme allows for at least 85 percent of the U.S. federal budget to remain unaudited.

Fitts has been researching this issue since 2001, when she began to believe that a financial coup d’etat was underway. Specifically, she suspected that the banks, corporations, and investors acting in each global region were part of a “global heist,” whereby capital was being sucked out of each country. She was right.

…click on the above link to read the rest of the article…

China’s Hard Landing Suddenly Gets a Lot Rougher

August 9, 2015

China’s Hard Landing Suddenly Gets a Lot Rougher

This has become a sign of the times: Foxconn, with 1.3 million employees the world’s largest contract electronics manufacturer, making gadgets for Apple and many others, and with mega-production facilities in China, inked a memorandum of understanding on Saturday under which it would invest $5 billion over the next five years in India!

In part to alleviate the impact of soaring wages in China.

Meanwhile in the city of Dongguan in China, workers at toy manufacturer Ever Force Toys & Electronics were protesting angrily, demanding three months of unpaid wages. The company, which supplied Mattel, had shut down and told workers on August 3 that it was insolvent. The protests ended on Thursday; local officials offered to come up with some of the money owed these 700 folks, and police put down the labor unrest by force.

These manufacturing plant shutdowns and claims of unpaid wages are percolating through the Chinese economy. The Wall Street Journal:

The number of labor protests and strikes tracked on the mainland by China Labour Bulletin, a Hong Kong-based watchdog, more than doubled in the April-June quarter from a year earlier, partly fueled by factory closures and wage arrears in the manufacturing sector. The group logged 568 strikes and worker protests in the second quarter, raising this year’s tally to 1,218 incidents as of June, compared with 1,379 incidents recorded for all of last year.

The manufacturing sector is responsible for much of China’s economic growth. It accounted for 31% of GDP, according to the World Bank. And a good part of this production is exported. But that plan has now been obviated by events.

Exports plunged 8.3% in July from a year ago, disappointing once again the soothsayers surveyed by Reuters that had predicted a 1% drop. Exports to Japan plunged 13%, to Europe 12.3%. And exports to the US, which is supposed to pull the world economy out of its mire, fell 1.3%. So far this year, in yuan terms, exports are down 0.9% from the same period last year. As important as manufacturing is to China, this debacle is not exactly conducive to economic growth.

…click on the above link to read the rest of the article…

The Seventh-Largest Economy in the World Spirals Down

August 7, 2015

The Seventh-Largest Economy in the World Spirals Down

HSBC, which knows a thing or two about the world, and about Brazil, is bailing out of Brazil.

It’s unloading its “entire business in Brazil,” it said this week, including retail banking and insurance. It will hand its long list of wealthy clients and over 21,000 employees to Bradesco, one of the largest private banks in Brazil, for $5.2 billion. Too much? Bradesco’s stock has since plunged over 9%.

Once the deal gets regulatory approval and closes, HSBC is out of Brazil. “The transaction represents a significant step in the execution of the actions announced during the Investor Update on 9 June 2015,” it said. After that update, Reuters had described HSBC’s motivations with these choice words:

For shareholders, betting on Brazil was risky as lenders grapple with tax hikes, weak credit demand, rising defaults, and the impact of what looks likely to be the country’s worst recession in over two decades.

The seventh largest economy in the world in 2014, according to the World Bank, is spiraling down, with private sector output, as Markit put it, falling at the “sharpest pace since March 2009.”

This is how Markit titled its Brazil Services PMI report on Wednesday: “Service sector activity drops at joint-fastest rate in survey history.”

The index hit 39.1 in July (50 is the dividing line between contraction and expansion), the fifth month in a row of contraction, with all sub-sectors in the survey “registering substantial falls in business activity.”

To add to the toxic mix, costs soared, with the rate of increase reaching an 81-month high, third fasted in survey history, due to “inflationary pressures, exchange rate factors, and client fee adjustment.” No green shoots in the immediate future: new orders fell for the fifth month in a row. The “deteriorating operating environment” caused the pace of job losses to accelerate “to a survey record.”

…click on the above link to read the rest of the article…

We Are All (or Should Be) Greeks Now

July 10, 2015

We Are All (or Should Be) Greeks Now

Their ‘No’ vote splashes a spotlight on ugly austerity, and its powerful puppeteers.

The temple of neo-liberalism and its ideology of social suicide in the interests of the banks has been breached. The hysteria in European capitals (particularly Germany) after the resounding “No” vote by the people of Greece is entirely appropriate. For decades now developed country governments and their enforcers, the IMF and the World Bank, have managed to bamboozle people in country after country, convincing them that up is down and black is white — that austerity and recession are nirvana — pie in the sky, bye and bye.

Until now.

The “No” vote — accomplished despite a hysterical campaign of fear by literally the entire Greek and EU media — is like a bright flash of light, however momentary, revealing the true nature of the conditions imposed by international finance and its political puppets in Western capitals. And who better to wield that bright light than Greece’s heretic economist and (now former) finance minister Yanis Varoufakis. An accomplished economist and an even better propagandist, he single-handedly reframed the Greek crisis from one of blaming lazy Greeks to blaming greedy EU banks.

Talk about great theatre: to contrast himself with the endless stream of men in suits from the euro-zone bureaucracy, he gave a news conference the day of the vote wearing a T-shirt. He was rejected by his fellow finance ministers as a negotiator because he, unlike most of them, actually understood economics and was prone to ridiculing their constant repetition of neo-liberal slogans.

The war between democracy and international finance, effectively suppressed for decades by complicit Western politicians and co-conspirators in the corporate media, is now out in the open for all to see. And what we see should have us declare that we are all Greeks now.

…click on the above link to read the rest of the article…

An Economic Hit Man Speaks Out: John Perkins on How Greece Has Fallen Victim to “Economic Hit Men”

July 4, 2015

An Economic Hit Man Speaks Out: John Perkins on How Greece Has Fallen Victim to “Economic Hit Men”

John Perkins, author of Confessions of an Economic Hit Man, discusses how Greece and other eurozone countries have become the new victims of “economic hit men.”

John Perkins is no stranger to making confessions. His well-known book,Confessions of an Economic Hit Man, revealed how international organizations such as the International Monetary Fund (IMF) and the World Bank, while publicly professing to “save” suffering countries and economies, instead pull a bait-and-switch on their governments: promising startling growth, gleaming new infrastructure projects and a future of economic prosperity – all of which would occur if those countries borrow huge loans from those organizations. Far from achieving runaway economic growth and success, however, these countries instead fall victim to a crippling and unsustainable debt burden.

That’s where the “economic hit men” come in: seemingly ordinary men, with ordinary backgrounds, who travel to these countries and impose the harsh austerity policies prescribed by the IMF and World Bank as “solutions” to the economic hardship they are now experiencing. Men like Perkins were trained to squeeze every last drop of wealth and resources from these sputtering economies, and continue to do so to this day. In this interview, which aired on Dialogos Radio, Perkins talks about how Greece and the eurozone have become the new victims of such “economic hit men.”

Michael Nevradakis: In your book, you write about how you were, for many years, a so-called “economic hit man.” Who are these economic hit men, and what do they do?

John Perkins: Essentially, my job was to identify countries that had resources that our corporations want, and that could be things like oil – or it could be markets – it could be transportation systems. There’re so many different things.

…click on the above link to read the rest of the article…

Bond Insurers Crash, Hit by Puerto Rico’s Default Shrapnel

June 30, 2015

Bond Insurers Crash, Hit by Puerto Rico’s Default Shrapnel

On Monday, Puerto Rico’s government released a report that gave the municipal bond market the willies.

Written by former World Bank and IMF economists, it vivisects Puerto Rico’s finances, lays out the basic fact that the nearly $73 billion in bonds that the US commonwealth has outstanding, amounting to nearly 70% of its GDP, are of dubious value, and offers a debt restructuring strategy.

The report is decorated with financial doom and gloom: Outmigration has caused the population to drop nearly 8% since 2006 to 3.5 million today, even while the debt kept ballooning. It contained this choice passage:

The single most telling statistic in Puerto Rico is that only 40% of the adult population – versus 63% on the US mainland – is employed or looking for work; the rest are economically idle or working in the grey economy. In an economy with an abundance of unskilled labor, the reasons boil down to two.

– Employers are disinclined to hire workers because (a) the US federal minimum wage is very high relative to the local average (full-time employment at the minimum wage is equivalent to 77% of per capita income, versus 28% on the mainland) and a more binding constraint on employment (28% of hourly workers in Puerto Rico earn $8.50 or less versus only 3% on the mainland); and (b) local regulations pertaining to overtime, paid vacation, and dismissal are costly and more onerous than on the US mainland.

– Workers are disinclined to take up jobs because the welfare system provides generous benefits that often exceed what minimum wage employment yields; one estimate shows that a household of three eligible for food stamps, AFDC, Medicaid and utilities subsidies could receive $1,743 per month – as compared to a minimum wage earner’s take-home earnings of $1,159. The result of all of the above is massive underutilization of labor, foregone output, and waning competitiveness.

To fix this situation, bondholders are now asked to step up to the plate.

…click on the above link to read the rest of the article…

China and the Gold Bugs

May 18, 2015

China and the Gold Bugs

A Popular Myth

One of the most persistent story lines among gold bugs and market participants who foresee the collapse of the dollar goes something like this:

China and many emerging markets including the other BRICS are looking for a way out of the global fiat currency system. That system is dominated today by the U.S. dollar. This dollar dominance allows the U.S. to force certain kinds of behavior in foreign policy and energy markets.

Countries that don’t comply with U.S. wishes find themselves frozen out of global payment systems and find their banks unable to transact in dollars for needed imports or to get paid for their exports. Russia, Iran, and Syria have all been subjected to this treatment recently.

China does not like this system any more than Russia or Iran but is unwilling to confront the U.S. Head-on. Instead, China is quietly accumulating massive amounts of gold and building alternative financial institutions such as the Asia Infrastructure Investment Bank, AIIB, and the BRICS-sponsored New Development Bank, NDB.

When the time is right, China will suddenly announce its actual gold holdings to the world and simultaneously turn its back on the Bretton Woods institutions such as the IMF and World Bank. China will back its currency with its own gold and use the AIIB and NDB and other institutions to lead a new global financial order.

Russia and others will be invited to join the Chinese in this new international monetary system. As a result, the dollar will collapse, the price of gold will skyrocket, and China will be the new global financial hegemon. The gold bugs will live happily ever after. The only problem with this story is that the most important parts of it are wrong.

…click on the above link to read the rest of the article…

Noam Chomsky: “The Idea Of A Media Which Does Not Repeat US Propaganda Is Intolerable To American Leaders”

April 21, 2015

Noam Chomsky: “The Idea Of A Media Which Does Not Repeat US Propaganda Is Intolerable To American Leaders”

Few individuals polarize the public with their opinions, statements and mere presence, like Noam Chomsky. The 86 year old linguist, philosopher, cognitive scientist, logician, political commentator, social justice activist, and anarcho-syndicalist advocate, has strong opinions (and in some cases, entire schools of thought) on everything from philosophy, to sociology, to linguistics, but he is perhaps best known in recent years for his political activism which has led to death threats due to his staunch and far-reaching criticism of US foreign policy (allegedly the Anti-Defamation League “spied on” Chomsky’s appearances).

His broader outlook is a peculiar version of libertarianism (he describes himself as an anacrho-syndicalist), in which he asserts that authority is inherently illegitimate, and that the burden of proof is on those in authority. If this burden can’t be met, the authority in question should be dismantled. Authority for its own sake is inherently unjustified. He contends that there is little moral difference between chattel slavery and renting one’s self to an owner or “wage slavery.” He holds that workers should own and control their workplace.

He is has also repeatedly stated his opposition to ruling elites, among them institutions like the IMF, World Bank, and GATT.

In other words, the present, in which ruling elites (whether the BIS and “Troika) and ubiquitous US intervention in every possible foreign affair (courtesy of a State Department which, as it has now been revealed, had until recently worked on behalf of the highest foreign bidder) determine the fate of the entire world, should provide Chomsky with endless material for contemplation.

…click on the above link to read the rest of the article…

How America’s Aristocracy Extends Its Global Control

April 21, 2015

How America’s Aristocracy Extends Its Global Control

As has been well documented even by the BBC, in their 1992 classic documentary about the CIA’s (still-ongoing) Gladio Operation, America’s CIA basically took control of the international racist-fascist (i.e., ideologically nazi) movement after World War II, by protecting and hiring Hitler’s Nazis and their key aristocratic eastern European supporters undercover. The Gladio Operation was just one branch of a broader CIA strategy, developed by Allen Dulles and originally carried out by his protégé James Angleton, to use, for the purposes of America’s aristocracy, nazis’ intense racism, by retargeting it away from Jews and toward Russians, so as to weaken first the Soviet Union, and, then, after the end of that, Russia itself. (U.S. President Barack Obama’s involvement with Ukraine is very much a result of this post-WW-II pro-nazi Dulles-Angleton program.)

There were many other branches of this strategy, one being by the World Bank and IMF to introduce capitalism into the former Soviet states in a manner that would privatize their formerly government-owned assets to aristocrats in the West and in the formerly Soviet nations by means of insider fire-sales which enabled these state-assets to be picked up by cooperating local insiders at non-market super-low prices and thereby have these new “oligarchs” (the local copies there of Western capitalism’s own aristocrats) as being secret agents of the U.S. aristocracy, who would thus be extending the American aristocracy’s control eastward. Mark Ames has succinctly recounted this operation, and David McClintick did the major report on it prior to Ames.

…click on the above link to read the rest of the article…

Is The Credibility Bubble Bursting?

April 20, 2015

Is The Credibility Bubble Bursting?

In a fiat currency system, perception is, by definition, everything. Paper money has no intrinsic value. So the people saving it and accepting it in exchange aren’t expressing faith in the money itself but in the competence and honesty — and power — of the institutions managing it. Let that faith erode and those slips of colored paper and ephemeral computer bits revert to their intrinsic value.

And on the credibility front, the trends aren’t encouraging. Consider the coverage of this weekend’s Washington DC meetings of the International Monetary Fund and World Bank, two global financial institutions that the US dominates. From the New York Times:

At global economic gathering, concerns that US is ceding its leadership role

This article is available only to subscribers, but a similar one from India’s Business Standard makes many of the same points:

US primacy seen ebbing at global meet

As world leaders converge here for their semiannual trek to the capital of what is still the world’s most powerful economy, concern is rising in many quarters that the United States is retreating from global economic leadership just when it is needed most.

The spring meetings of the International Monetary Fund and World Bank have filled Washington with motorcades and traffic jams and loaded the schedules of President Obama and Treasury Secretary Jacob J Lew. But they have also highlighted what some in Washington and around the world see as a United States government so bitterly divided that it is on the verge of ceding the global economic stage it built at the end of World War II and has largely directed ever since.

…click on the above link to read the rest of the article…

Tag Archives: World Bank

Content

Post categories

Economic Links

Energy/Resource Links

Environmental Links

Geopolitical Links

Liberty Links

News Links

Other Links

Survival Skills

Post Archives by Category

Post navigation

Latest Posts