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

[jpatter666]

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

Really? Okay, let's compare records. Here's ours:

• November 1998: Warns on Internet Bubble
• August 1999: No Y2K Disaster
• November 1999: How the Internet Bubble Will End
• March 2000: Internet Bubble Top
• April 2000: A Bear Market is Born
• January 2001: Post-Bubble Recession
• September 2001: Gold Price Bottom at US$270
• August 2002: Warns of Housing Bubble
• January 2004: How Housing Bubble will End
• January 2005: Housing Bubble Correction
• June 2005: Housing Bubble Top, crash to follow that leads to severe recession
  
• October 2006: Severe recession starts Q4 2007
  
• December 27, 2007: Start of Debt Deflation Bear Market, 40% decline to follow
  
• June 16, 2008: Top of commercial real estate market, crash to follow
  
• September 15, 2008: Fed Funds spread signals crash
• March 27, 2009: Debt Deflation Bear Market: First Bounce

Please post zerohedge's. Thanks.

Eh...not so sure I'd include the First Bounce one. Other than the "bounce" statement, lots of it still has yet to come about.

"In a recession, a recovery in personal consumption, incomes, and retail sales signals the start of recovery. The virtuous cycle of credit growth--and its corollary, debt growth—combine with rising incomes as the rate of unemployment growth slows. Credit expansion leads the economy out of the cycle, followed by incomes. That is what many stock market participants think they are seeing now, as previous experience has trained them to see. But they are wrong. "

They sure have been right so far.

"This rally does not reflect an improvement in the underlying economy but the response of market participants to short term government policy in the context of a widespread misperception of the current depression as a recession. "

"Even after the DJIA approaches our target of 5000, we have no idea how long it will remain trading in a low range. The duration of the downturn depends on the political response to global economic contraction. The flawed philosophy and ideology of curing the debt deflation illness with further exposure to the debt disease, as the U.S. attempted in the 1930s and Japan has tried since the early 1990s, do not encourage optimism but point to a prolonged and painful period of global economic contraction."

iTulip has definitely been more right than wrong, but we blew in SPADES the rebound....(sigh). It's something I've noticed -- we often underestimate how bad (or good) things might get. Probably a consequence of the massive dysfunction in economic markets.

[FRED]

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

Hey Pot meet kettle!

Really? Okay, let's compare records. Here's ours:

• November 1998: Warns on Internet Bubble
• August 1999: No Y2K Disaster
• November 1999: How the Internet Bubble Will End
• March 2000: Internet Bubble Top
• April 2000: A Bear Market is Born
• January 2001: Post-Bubble Recession
• September 2001: Gold Price Bottom at US$270
• August 2002: Warns of Housing Bubble
• January 2004: How Housing Bubble will End
• January 2005: Housing Bubble Correction
• June 2005: Housing Bubble Top, crash to follow that leads to severe recession
  
• October 2006: Severe recession starts Q4 2007
  
• December 27, 2007: Start of Debt Deflation Bear Market, 40% decline to follow
  
• June 16, 2008: Top of commercial real estate market, crash to follow
  
• September 15, 2008: Fed Funds spread signals crash
• March 27, 2009: Debt Deflation Bear Market: First Bounce

Please post zerohedge's. Thanks.

[ThePythonicCow]

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

Yes, internationally we will all move to the SDR. However, I think the dollar will just be a part of it, on par with the other currencies. All those countries with huge dollar reserves will be forced to buy American products. It will be the greatest boom in exports our country has ever seen. We will be rich!

Good point.

On the other side of that point, I expect some of the excess dollar reserves laying about the world will get spent or become worth less before this plays out. China's real estate bubble will not last out this storm.

But yeah, hopefully I left off telling this story at the bottom, and once the dollar is no longer "special", it will make it easier for us to (1) earn lower wages on the world scale ;) and (2) sell more stuff to the world .

We've got a little work :eek: to first, to do get there from here.

[Crazyfingers]

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

This is why I moved it.

Zerohedge's batting average is falling like a rock.

Hey Pot meet kettle!

[FRED]

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

Tyler Durden



sensational headline
sensational conclusions

what did Zero Hedge say when this was first announced over a year ago?

This isn't new news and wasn't just announced.

When in doubt, got to the source. Draw your own conclusions.

http://www.imf.org/external/np/exr/facts/gabnab.htm

On April 2, 2009, the Group of Twenty industrialized and emerging market economies (G 20) agreed to increase the resources available to the IMF by up to $500 billion (which would triple the total pre-crisis lending resources of about $250 billion) to support growth in emerging market and developing countries. This broad goal was endorsed by the International Monetary and Financial Committee in its April 25, 2009 communiqué.

This is why I moved it.

Zerohedge's batting average is falling like a rock.

[aaron]

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

On your last point "Why would an ordinary ...", I don't expect a world currency to replace local currencies, but rather a world currency to form the world's "reserve currency" displacing the Dollar from its privileged reserve status. Nations would hold reserves of this special currency, against which they issued their own local currencies.

For one thing, as docile as Americans are, I would expect them to revolt if someone tried to replace the Dollar with some SDR thing. The Almighty Buck has become more revered than the American flag to many Americans.

My current guess is that gold would be one of the tools used to bring respect to SDR's as the world's meta (reserve) currency, but that SDR's would not be exchangeable for the gold held by us serfs. SDR's and IMF gold would be strictly an inter-national construct.

The essential impact on America would be that it's central bank (the Fed) lost its current ability to monetize anything to which it can assign some mark-to-magic value. Bernanke's printing press would have an IMF controlled governor installed on it. Imports would cost Americans nominally higher values ($10/gal gas, say), but Americans would have fewer jobs and less money (deflation). America would undergo an IMF-style austerity program, with steep taxes, nationalized and expensive utilities and services, and reduced social payments (lower Medicare, means tested or privatized and annuitized Social Security.) Bank regulation and monitoring of customer activity would be strong, even oppressive. This is all a rather depressing scenario.

Per my above timeline, this happens after "Bretton Woods III" removes the Dollars reserve status and mutually restructures the debt of many nations. That in turn cannot happen until Americans feel some more fear or pain, and the U.S. Federal debt gets jacked up beyond all sane levels.

Yeah -- probably not the iTulip forecast. But this thread has already been exiled to Rant & Rave , likely because of my crazy forecasts. There's no sense in my going "metalman" now .

What can you currently buy with Yen? Japanese stuff.
Euro? European stuff
Yuan? Chinese stuff.
U.S. Dollars --> Everybody else's stuff.

Yes, internationally we will all move to the SDR. However, I think the dollar will just be a part of it, on par with the other currencies. All those countries with huge dollar reserves will be forced to buy American products. It will be the greatest boom in exports our country has ever seen. We will be rich!

[ThePythonicCow]

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

This needs some correction iTulip-style. At certain point "the fourth currency" will come into play, at least temporarily. It will help the merry gang of the world govt's to find some common ground. Most likely, it will be some SDR supported by gold but still dominated by $US.

That moment will also be the most likely point of gold confiscation/overtaxation. Gold will again become a part of international financial system. Why would an ordinary citizen need some special international currency that does not pay dividends and is not accepted by local banks? :rolleyes:

On your last point "Why would an ordinary ...", I don't expect a world currency to replace local currencies, but rather a world currency to form the world's "reserve currency" displacing the Dollar from its privileged reserve status. Nations would hold reserves of this special currency, against which they issued their own local currencies.

For one thing, as docile as Americans are, I would expect them to revolt if someone tried to replace the Dollar with some SDR thing. The Almighty Buck has become more revered than the American flag to many Americans.

My current guess is that gold would be one of the tools used to bring respect to SDR's as the world's meta (reserve) currency, but that SDR's would not be exchangeable for the gold held by us serfs. SDR's and IMF gold would be strictly an inter-national construct.

The essential impact on America would be that it's central bank (the Fed) lost its current ability to monetize anything to which it can assign some mark-to-magic value. Bernanke's printing press would have an IMF controlled governor installed on it. Imports would cost Americans nominally higher values ($10/gal gas, say), but Americans would have fewer jobs and less money (deflation). America would undergo an IMF-style austerity program, with steep taxes, nationalized and expensive utilities and services, and reduced social payments (lower Medicare, means tested or privatized and annuitized Social Security.) Bank regulation and monitoring of customer activity would be strong, even oppressive. This is all a rather depressing scenario.

Per my above timeline, this happens after "Bretton Woods III" removes the Dollars reserve status and mutually restructures the debt of many nations. That in turn cannot happen until Americans feel some more fear or pain, and the U.S. Federal debt gets jacked up beyond all sane levels.

Yeah -- probably not the iTulip forecast. But this thread has already been exiled to Rant & Rave , likely because of my crazy forecasts. There's no sense in my going "metalman" now .

[medved]

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

I actually tend to agree with your steps ... perhaps I was just thinking on a different time scale and didn't say so.

Combining your comments and mine, I get forecast these phases, in time order:

• dump stocks, pile into Treasuries
• that reverses yet again, into more aggressive inflation
• SHTF, nations at each others throat
• America's debt too big and its willing lenders too few to ignore any more
• Bretton Woods III, with dollar subordinate to G20/IMS/BIS construct
• Now that dollar is once again "grounded" (in paper, not gold, but still) then inflation reverses to deflation and a major depression.

Of course, the chances that history will do as I predict are about zilch .

This needs some correction iTulip-style. At certain point "the fourth currency" will come into play, at least temporarily. It will help the merry gang of the world govt's to find some common ground. Most likely, it will be some SDR supported by gold but still dominated by $US.

That moment will also be the most likely point of gold confiscation/overtaxation. Gold will again become a part of international financial system. Why would an ordinary citizen need some special international currency that does not pay dividends and is not accepted by local banks? :rolleyes:

[ThePythonicCow]

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

This reminds me the happy talk about replacing the $US we heard some 10 years before. Euro, anybody? . When TSHTF, all this yapping about cooperation will stop. China will be just as happy to finance Britain as Germany is happy to help Greece.

After TSHTF BRICs will be at each other throats in no time, Japan and Europe will follow US. The biggest bully always wins.

IMHO, the next step in the crisis will be an echo of the previous one. Everybody will pile into USTs. Of course, they will be damaged by inflation, but not by default like the weakest link du jour. If anything this might be one of the reasons to go long UST as a medium-term speculative move.

IMHO, the general cluelessness of the market means the current "recovery" will be followed by dumping the stocks and piling into USTs again.

I actually tend to agree with your steps ... perhaps I was just thinking on a different time scale and didn't say so.

Combining your comments and mine, I get forecast these phases, in time order:

• dump stocks, pile into Treasuries
• that reverses yet again, into more aggressive inflation
• SHTF, nations at each others throat
• America's debt too big and its willing lenders too few to ignore any more
• Bretton Woods III, with dollar subordinate to G20/IMS/BIS construct
• Now that dollar is once again "grounded" (in paper, not gold, but still) then inflation reverses to deflation and a major depression.

Of course, the chances that history will do as I predict are about zilch .

[medved]

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

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.

This reminds me the happy talk about replacing the $US we heard some 10 years before. Euro, anybody? . When TSHTF, all this yapping about cooperation will stop. China will be just as happy to finance Britain as Germany is happy to help Greece.

After TSHTF BRICs will be at each other throats in no time, Japan and Europe will follow US. The biggest bully always wins.

IMHO, the next step in the crisis will be an echo of the previous one. Everybody will pile into USTs. Of course, they will be damaged by inflation, but not by default like the weakest link du jour. If anything this might be one of the reasons to go long UST as a medium-term speculative move.

IMHO, the general cluelessness of the market means the current "recovery" will be followed by dumping the stocks and piling into USTs again.

[ThePythonicCow]

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

what did Zero Hedge say when this was first announced over a year ago?

This isn't new news and wasn't just announced.

Perhaps you're confusing different events, babbittd.

Following the IMF Factsheet you linked and the IMF Press Release that Zero Hedge linked, I see that the following events happened:

• On April 2, 2009, the Group of Twenty industrialized and emerging market economies (G 20) agreed to increase the resources available to the IMF by up to $500 billion ...
• This broad goal was endorsed by the International Monetary and Financial Committee in its April 25, 2009 communiqué.
• On September 25, 2009 the G-20 announced it had delivered on its promise to contribute over $500 billion to a renewed and expanded NAB.
• (April 12, 2010) The Executive Board of the International Monetary Fund (IMF) today approved a ten-fold expansion of the Fund’s New Arrangements to Borrow (NAB) and the transformation of the Fund’s premier standing credit arrangement into a more flexible and effective tool of crisis management.

So it seems that the G20 proposes and the IMF disposes, and that it takes a year for this to play out:

• April 2009 - G20 to IMF - Consider taking another $500B
• April 2009 - IMF to G20 - Ok, we're willing
• Sept 2009 - G20 to IMF - Here it is
• April 2010 - IMF to G20 - Got it and we're setup to use it now.

I anticipate that this portends increasingly important roles for the G20 and IMF/BIS in the world economic, financial, banking and monetary systems.

[Slimprofits]

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

Tyler Durden

If memory serves us right, the Fund's current resources give it acces to about a third of a trillion, so as of today the IMF has recourse funding to just under a trillion. Something big must be coming.

sensational headline
sensational conclusions

what did Zero Hedge say when this was first announced over a year ago?

This isn't new news and wasn't just announced.

When in doubt, got to the source. Draw your own conclusions.

http://www.imf.org/external/np/exr/facts/gabnab.htm

On April 2, 2009, the Group of Twenty industrialized and emerging market economies (G 20) agreed to increase the resources available to the IMF by up to $500 billion (which would triple the total pre-crisis lending resources of about $250 billion) to support growth in emerging market and developing countries. This broad goal was endorsed by the International Monetary and Financial Committee in its April 25, 2009 communiqué.

[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.

[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?

[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.