IMF presses Euro countries to hand over Sovereignty

November 9, 2012 Leave a comment

By LUIS MIRANDA | THE REAL AGENDA | NOVEMBER 9, 2012

The International Monetary Fund (IMF) has urged countries that are under pressure from markets and high financing costs, including Spain, to seek the help of the European bailout funds to enable the debt purchase program created by the European Central Bank (ECB) to be initiated.

“Countries should implement plans to adjust and, if necessary, seek appropriate support from the EFSF / ESM. This would allow the ECB to intervene using the recently established program,” said an IMF document prepared for the meeting of Finance ministers and central bank governors of the G20 for the past 4 and 5 November.

In this regard, the organization stresses that although the ECB’s decision has removed some of the main risks for the eurozone, political and economic factors can cause these countries to not seek help from European partners and the ECB at the right time.

The institution led by Christine Lagarde said that although progress has been made, the resolution of the eurozone crisis will require “timely and decisive” policy implementation.

The IMF warns that access to finance at a reasonable cost is “essential to enable successful economies to adjust. While the economies of the periphery must continue to adjust their fiscal balances at a rate that they can afford in the current fragile environment, they should also adopt the right policies.” The document warned that changes that do not include a so-called rescue may not be sufficient to fully recover the confidence of the markets, especially risk implementation.

So, the supposed solution provided by the bankers is not only not effective, but also a double whammy. On top of keeping countries in debt, the bankers also want to deepen the crisis by issuing more debt so that more risk can be created and nothing will ever change. That is why the banks want to take complete control, micromanaging every single country’s fiscal and monetary policies, so that they can risk as much as they want with other people’s money without having to be accountable to anyone.

The IMF disingenuously stresses that measures adopted because of the crisis should be accompanied by a roadmap towards creating a banking union and greater fiscal integration to strengthen the monetary union. That is exactly the mechanism that would, once and for all, given them the complete control of all financial decisions in Europe. They also intend to export this to the rest of the world once the EU nations are fully absorbed.

In the opinion of the IMF, the union should be based on a unique mechanism of supervision — controlled by the banks who created the crisis –, a resolution mechanism at the level of the Euro zone, with support from all members and a scheme where all countries pitch in to have a deposit guarantee scheme for the entire currency union. That money will also be spent at the banker’s discretion and countries or banking institutions will be ‘rescued’ only if they agree to all terms in the contracts.

The IMF also stresses that continued implementation of financial, fiscal and structural reforms is “essential”, while acknowledging that several years will pass before all policies are fully implemented. This means that bankers, at least for now, do not intend to collapse the European financial system at once, as long as they can continue to postpone it by creating more debt and adding sovereign nations to their portfolio of debt slaves.

The bankers have smartly warned about using austerity as a way to curb out of control spending, and instead advocate for perpetual indebtedness. That is because this is the most efficient mechanism for them to get to control nations directly from the inside. The truth is however, that the IMF is one of the main pushers of austerity as a first step in the acquisition of indebted nations. Once government bureaucrats are no longer able to cut anything else, the bankers pose as saviors by lending fake money so the countries can begin another cycle of debt-based ‘development’.

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Greek government imposes more Austerity

November 8, 2012 Leave a comment

By LUIS MIRANDA | THE REAL AGENDA | NOVEMBER 8, 2012

The same worn out ineffective policies that have done nothing to help Greece come out of the dire situation it has been for years have found more support at the highest levels of the Greek government. Congress in that country had the guts to adopt more of the same hunger causing measures that took Greece from being in a bad recession to a complete and open economic depression.

The Greek government managed to give new impetus to the austerity policies demanded by the EU and the International Monetary Fund but that were again rejected on the streets and partially in Parliament, where the new austerity measures were approved with a very small majority. For Greece, however, this late awakening by some of its congressional leaders, may be too little, too late.

On Wednesday the Greek Parliament approved the latest round of austerity measures with 153 votes in favor, 128 against and 18 abstentions. One congressman was absent during the voting.

The so-called coalition government led by banker accomplice and Prime Minister Andonis Samaras, gained control of 175 of the 300 seats in Congress which facilitated the approval of the measures, despite the last-minute challenges issued by some opposition leaders.

The new austerity package includes, among other goodies, the dismissal of about 25,000 government employees by the end of 2013, reduced pensions and health co-payment.

“We voted to remain within Europe or return to the drachma, international isolation, social insurrection and civil war,” Samaras said in Parliament during the debate period previous to the approval of the list of demands written by bankers in Brussels.

“Some of the measures included in the bill that we voted today should have been adopted years ago. Others, such as wage and pension cuts are unfair and that is something we should not hide,” confessed Samaras. During the debate, which was hoarse and thick with shouts and interruptions, the opposition branded the new austerity package as “unconstitutional” in both its content and the procedure for approval.

As in many other countries, the artificial sense of emergency, gave Congress little or no time to actually read the 279 pages of the proposal that did not get to Parliament until late Monday. The same has been done in countries like the United States, when George W. Bush and the American Congress approved the TARP legislation and when they decided to bailout banks and General Motors.

Congressman Dimitris Papadimulis, warned after the vote that the new measures “will hurt seriously the Greek society and the economy” and called on the population to “prevent it” fighting against a government which he said had experienced significant losses. The rejection of the new austerity measures, both before and after the approval was clearly felt on the streets of Athens, as people participated of a general strike of 48 hours.

Before the vote was taken, anywhere between 100,000 and 200,000 people showed up to Syntagma Square, just outside Congress to demand the rejection of the legislation. Although the protests remained largely peaceful, the approval of more austerity resulted in riots between protesters and police. The disturbances spread along the avenues and squares nearby, where protesters resorted to burning garbage containers and destroy barricades placed along the streets.

Police actions against the protesters rendered at least 70 people arrested. Most of the Greeks who tried to put some pressure on Congress to reject the new austerity policies remained outside Parliament premises while they shouted and demanded that their voice be heard. As in all other occasions, the Greek leadership did exactly the opposite; they listened to the bankers and not their people.

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Brussels sees darker times for Spain and Europe

November 6, 2012 Leave a comment

By LUIS MIRANDA | THE REAL AGENDA | NOVEMBER 6, 2012

Brussels sees no green grass across the fence when it comes to an economic recovery. The economic forecasts for 2013, which will be made public on Friday, will describe a dark and rainy future for Spain and most likely the rest of Europe.

Forecasts are just that, good or bad omens based on leading indicators. But it remains to be seen whether or not they are right. But if the predictions issued by Brussels become reality, that reality will mean serious trouble for Spain and the rest of Europe. The European Commission anticipates that the GDP falls 1.6% this year and 1.5% in 2013.

Spanish government forecasts were more hopeful before the statement from the EU with phrases such as ”We emerge from the crisis” and “there are hopeful signs”. These phrases were issued by the Minister for Employment, Fatima Banez, who had said that Spain would see a contraction of 1.5% for this year and a decrease of 0, 5% for 2013.

Next to the real exit from the crisis, the troubling data made public by Brussels is the government’s deficit. The massive austerity measures adopted by Spain only helped reduce the deficit by a meager 0.2 %. The painful measures that combined tax increases with deep cuts in expenses related to social programs did not work; just as it was intended to. The deficit will end the year at 8%, according to the Commission, but this number does not take into account the effect of recapitalization of banks. Expect the Spanish deficit to be much larger.

For 2013, the fiscal gap is 6%, and 5.8% by 2014. These numbers again do not include the bailouts of the banking system and the possible bailout of Spain as a whole. As predicted months ago, Spain will not be able to lower its deficit to 3 % of the GDP, which is the target requested by Brussels. That leaves three possibilities. The first is to extend the deadlines to meet targets, which has been demanded by the International Monetary Fund (IMF) in Brussels. This alternative is now getting stronger and is supported by several countries that are hanging from the debt cliff.

The second is to ask Spain for additional efforts. That is, more austerity and spending cuts, which as it has been seen in Greece, would result in no solution whatsoever. Most economists expect that agreements reached during future meetings will include a combination of both austerity and an extension for Spain and the other countries to reach their deficit goals.

Spain’s Economy Minister Luis de Guindos, expected a deficit of 7.3% this year, 4.5% next year and 2.8% in 2014, far below the projections made by analysts and official data from both Brussels as the International Monetary Fund (IMF) for next year and the next.

The Commission did not comment yesterday on the data. Clearly on all forecasts, Brussels and the Spanish government, weigh several unknowns, especially those relating to the effect of the increase in VAT (a real social experiment, with the country in recession) and the tax amnesty.

However, the Vice President and Competition Commissioner Joaquin Almunia, gave some clues in Madrid yesterday about the situation: government budgets for 2013 and associated economic forecasts show the efforts being made by both sides – income and expenses — but the accompanying macroeconomic picture is “far from the consensus.”

Almunia also hinted that Brussels has the feeling that Spain has denied the complete evidence, the depth of the crisis and the need to act thoroughly. “The delayed reaction is too often associated with Spain,” he said. Speaking at the New Economy Forum, he called “giving in to defeatism” and explained that the crisis “has a solution, tha will be overcome and is beginning to be overcome.”

“Trees should not impede us all to see the forest,” said Almunia. But the trees are just too tall. Brussels projections that approximate the most to those of the Spanish government are related to public debt. And even in that section the figures speak for themselves: the debt will end this year at 83.7%, the next at 89.5% and will be at 93.9% of GDP by 2014.

One thing is for sure: there is no sign that shows when the debt will stop growing. Meanwhile, Europe continues to advance an agenda that keeps on using the same old recipe of more austerity, while government expenses continue to grow. As we have explained here in multiple occasions, both Spain and Europe are — intentionally — going through a vicious cycle that will not result in the reduction of the deficit or the rescue of the economies that are heavily burdened by debt.

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China: The New Bin Laden

May 11, 2011

Paul Craig Roberts
May 12, 2011

George Orwell, the pen name by which Eric Blair is known, had the gift of prophecy, or else blind luck. In 1949 in his novel, 1984, he described the Amerika of today and, I fear, also his native Great Britain, which is no longer great and follows Washington, licking the jackboot and submitting to Washington’s hegemony over England and Europe and exhausting itself financially and morally in order to support Amerikan hegemony over the rest of the world.

In Orwell’s prophecy, Big Brother’s government rules over unquestioning people, incapable of independent thought, who are constantly spied upon. In 1949 there was no Internet, Facebook, twitter, GPS, etc. Big Brother’s spying was done through cameras and microphones in public areas, as in England today, and through television equipped with surveillance devices in homes. As everyone thought what the government intended for them to think, it was easy to identify the few who had suspicions.

Fear and war were used to keep everyone in line, but not even Orwell anticipated Homeland Security feeling up the genitals of air travelers and shopping center customers. Every day in people’s lives, there came over the TV the Two Minutes of Hate. An image of Emmanuel Goldstein, a propaganda creation of the Ministry of Truth, who is designated as Oceania’s Number One Enemy, appeared on the screen. Goldstein was the non-existent “enemy of the state” whose non-existent organization, “The Brotherhood,” was Oceania’s terrorist enemy. The Goldstein Threat justified the “Homeland Security” that violated all known Rights of Englishmen and kept Oceania’s subjects “safe.”

Since 9/11, with some diversions into Sheik Mohammed and Mohamed Atta, the two rivals to bin Laden as the “Mastermind of 9/11,” Osama bin Laden has played the 21st century roll of Emmanuel Goldstein. Now that the Obama Regime has announced the murder of the modern-day Goldstein, a new demon must be constructed before Oceania’s wars run out of justifications.

Hillary Clinton, the low-grade moron who is US Secretary of State, is busy at work making China the new enemy of Oceania. China is Amerika’s largest creditor, but this did not inhibit the idiot Hilary from, this week in front of high Chinese officials, denouncing China for “human rights violations” and for the absence of democracy.

While Hilary was enjoying her rant and displaying unspeakable Amerkan hypocrisy, Homeland Security thugs had organized local police and sheriffs in a small town that is the home of Western Illinois University and set upon peaceful students who were enjoying their annual street party. There was no rioting, no property damage, but the riot police or Homeland Security SWAT teams showed up with sound cannons, gassed the students and beat them. http://www.youtube.com/watch?v=ufKv-5t0t4E

Indeed, if anyone pays any attention to what is happening in Amerika today, a militarized police and Homeland Security are destroying constitutional rights of peaceful assembly, protest, and free speech.

For practical purposes, the U.S. Constitution no longer exists. The police can beat, taser, abuse, and falsely arrest American citizens and experience no adverse consequences.

The executive branch of the federal government, to whom we used to look to protect us from abuses at the state and local level, acquired the right under the Bush regime to ignore both US and international law, along with the US Constitution and the constitutional powers of Congress and the judiciary. As long as there is a “state of war,” such as the open-ended “war on terror,” the executive branch is higher than the law and is unaccountable to law. Amerika is not a democracy, but a country ruled by an executive branch Caesar.

Hillary, of course, like the rest of the U.S. Government, is scared by the recent International Monetary Fund (IMF) report that China will be the most powerful economy in five years.

Just as the military/security complex pressured President John F. Kennedy to start a war with the Soviet Union over the Cuban missile crisis while the US still had the nuclear advantage, Hillary is now moving China into the role of Emmanuel Goldstein. Hate has to be mobilized, before Washington can move the ignorant patriotic masses to war.

How can Oceania continue if the declared enemy, Osama bin Laden, is dead. Big Brother must immediately invent another “enemy of the people.”

But Hillary, being a total idiot, has chosen a country that has other than military weapons. While the Amerikans support “dissidents” in China, who are sufficiently stupid to believe that democracy exists in Amerika, the insulted Chinese government sits on $2 trillion in US dollar-denominated assets that can be dumped, thus destroying the US dollar’s exchange value and the dollar as reserve currency, the main source of US power.

Hillary, in an unprecedented act of hypocrisy, denounced China for “human rights violations.” This from a country that has violated the human rights of millions of victims in our own time in Iraq, Afghanistan, Pakistan, Yemen, Libya, Somalia, Abu Ghraib, Guantanamo, secret CIA prisons dotted all over the planet, in US courts of law, and in the arrests and seizure of documents of American war protestors. There is no worst violator of human rights on the planet than the US government, and the world knows it.

The hubris and arrogance of US policymakers, and the lies that they inculcate in the American public, have exposed Washington to war with the most populous country on earth, a country that has a military alliance with Russia, which has sufficient nuclear weapons to wipe out all life on earth. The scared idiots in Washington are desperate to set up China as the new Osama bin Laden, the figure of two minutes of hate every news hour, so that the World’s Only Superpower can take out the Chinese before they surpass the US as the Number One Power.

No country on earth has a less responsible government and a less accountable government than the Americans. However, Americans will defend their own oppression, and that of the world, to the bitter end.

Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously an editor for the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.

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IMF calls for Alternative Reserve Currency, Again

February 11, 2011

CNNMoney
February 11, 2011

The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world’s reserve currency.

The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system.

SDRs represent potential claims on the currencies of IMF members. They were created by the IMF in 1969 and can be converted into whatever currency a borrower requires at exchange rates based on a weighted basket of international currencies. The IMF typically lends countries funds denominated in SDRs

While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar.

Dominique Strauss-Kahn, managing director of the IMF, acknowledged there are some “technical hurdles” involved with SDRs, but he believes they could help correct global imbalances and shore up the global financial system.

“Over time, there may also be a role for the SDR to contribute to a more stable international monetary system,” he said.

The goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to swings in the domestic economy and changes in U.S. policy.

In addition to serving as a reserve currency, the IMF also proposed creating SDR-denominated bonds, which could reduce central banks’ dependence on U.S. Treasuries. The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs.

Oil prices usually go up when the dollar depreciates. Supporters say using SDRs to price oil on the global market could help prevent spikes in energy prices that often occur when the dollar weakens significantly.

The dollar alternatives

Fred Bergsten, director of the Peterson Institute for International Economics, said at a conference in Washington that IMF member nations should agree to create $2 trillion worth of SDRs over the next few years.

SDRs, he said, “will further diversify the system.”

Dollar firms after starting 2011 weak

The dollar has been drifting lower so far this year as the global economy improves and investors regain their appetite for more risky assets such as stocks and commodities.

After rising above 81 in early January, the dollar index, which measures the U.S. currency against a basket of other international currencies, eased below 77 earlier this week.

However, the dollar was higher Thursday against the euro, pound and yen as disappointing corporate results weighed on stock prices following several days of gains on Wall Street. The rally in the commodities market also cooled, with the price of oil and metals backing off recent highs.

In addition, renewed concerns about the debt problems facing troubled European economies put pressure on the euro and supported the dollar. The yield on Portugal’s benchmark bond rose to a record high Wednesday, and borrowing costs for Ireland, Spain and Greece remain elevated.

“The market is shedding risk, with equities and commodities weakening and the U.S. dollar broadly stronger” said Camilla Sutton, currency strategist at Scotia Capital.

Traders were also digesting comments from Federal Reserve chairman Ben Bernanke, who told Congress Wednesday that despite a strengthening economic recovery, the unemployment rate remains high while inflation is “still quite low.”

Those remarks reaffirmed the view that “the Fed would be very slow to tighten policy given its dual mandate of price stability and employment,” analysts at Sucden Financial wrote in a research report.

Bernanke also urged lawmakers to come up with a “credible plan” to bring down “unsustainable” federal budget deficits.

“We expect that the outlook for the U.S. fiscal position will weigh heavily on the U.S. dollar in the quarters ahead,” said Sutton. In the near-term, however, she said “a strengthening growth profile” could help provide “a temporary period of dollar strength.”

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