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The Real IMF Assault

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Posted on May 20, 2011
AP / Shannon Stapleton, pool

Focus on DSK: Dominique Strauss-Kahn, former head of the International Monetary Fund, is seen through a video camera viewfinder at his arraignment Monday in Manhattan Criminal Court.

By Nomi Prins

(Page 2)

Last November, at the European Banking Congress and Central Bank Conference in Frankfurt, Germany, it was DSK (in a pot-calling-kettle-black sort of way) who pointed out the dangers of our own debt being so high and the necessity that the Fed bolster the dollar. That didn’t exactly endear him to Fed Chairman Ben Bernanke, who spent his speech defending QE2 and blaming dollar problems on a slowly recovering global economy, while avoiding mention of the debt-bank connection.

Avoidance, it turns out, is a useful strategy. Last week, Bernanke urged Congress to approve another debt cap increase. The Fed has amassed $2.5 trillion of debt on its books (including $1.5 trillion in treasurys shell-gamed from the Treasury Department and nearly $1 trillion of mortgage-related securities it won’t sell for fear of hurting the values of similar securities on the banks’ books). It’s being used for nothing helpful to the general economy. A simple transfer of any of it would solve the debt cap problem in a nanosecond. Going a step further, an exchange of any of the $1.4 trillion of excess bank reserves receiving interest from the Fed would do the same.

Our public debt ballooned under Timothy Geithner by more than $4 trillion. But rather than even considering taking some back from the Fed’s balance sheet, Treasury Secretary Geithner threatened to halt civil service retirement and disability payments to free up borrowing capacity, repeating almost verbatim similar threats made by John Snow, George W. Bush’s treasury secretary at the end of 2004.

This is exactly the kind of thing going on in Europe, with a mild twist. If we can’t raise enough debt for banks, we’ll take it from citizens. Even though creating debt (massive debt) for this reason has not helped the general economy, nor will it.

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Meanwhile, the global “remedy” for depressed economies and debt-bloated banking sectors remains to do more of the same and pretend it will lead to a different outcome. Sadly, there is no way this strategy will result in more stable economies. What we can expect instead is a further slide into global economic depression.


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By mc.murphy, May 23, 2011 at 8:35 pm Link to this comment

By Cliff Carson, May 23 at 7:33 pm

Would you do me the favor and post on any comment thread at:

http://mosquitocloud.net/

‘preciate, thanks

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By Cliff Carson, May 23, 2011 at 7:33 pm Link to this comment

I saw Perkins on C-Span several years ago and his talk about his book “Confessions of an Economic Hit-Man”.  That book inspired me to read more about what I call the International Financial Cabal.

Nomi Prins wrote a good article but didn’t delve into the real threat that the IFC is.  The IMF is nothing more than a Sub of the IFC.  Nearly all of the World’s money is controlled by the IFC Bank - Bank of International Transfers (BIS) owned by about 50 of the World’s Richest and most powerful families with the Rothschild family being the majority holder and the defacto head of this group.

Joseph Stiglitz used to be on the inside before he was kick out and for what he thinks about the World Bank and the International Monetary Fund I provide this link to just exactly who and what is World Band and the IMF.  And of course their “Goal”.

The Libyan rebels have allowed this group to set up a “Central Bank” in Benghazi.  I have thought that they instigated the rebellion in Libya because Qaddafi was trying to set up a United States of Africa and a united currency for Africa and all Islamic Nations.

Guess I won’t give the link - when I tried to post the link here, I got a notice that the link was banned.

Here is an excerpt about the African Monetary System I wrote of above, I won’t use a link, it might be banned also.

“Today, Qadhafi is seen by Africans on the continent and throughout the diaspora as a leading Afrocentric Pan-Africanist, articulating a vision for a United States of Africa – with one government, one currency and one army.
One of Muammar Qadhafi’s most controversial and difficult moves has been his determined drive to unite Africa with a shared vision for the true independence and liberation of the entire continent. He has contributed a great deal of his time, energy and large sums of money to this project, and like Kwame Nkrumah, he has paid a high price.

Answering Qadhafi’s call, Libya deposited $32 billion into a $42 billion fund for the creation of a national African Central Bank (HQ to be in Nigeria), African Monetary Fund (HQ to be in Cameron) and African Investment Bank (HQ to be in Libya), to fund health, education and communications infrastructure projects across Africa. This money, along with 45 billion Euros and even yet more billions of dollars, was confiscated by the U.S. and European countries during the past month, to prevent the 2011 launch of Africa’s own non-private supra-national monetary system.

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By truedigger3, May 23, 2011 at 8:01 am Link to this comment

Re: By Lafayette, May 23 at 3:25 am

Lafayatte wrote:
“.... for fifteen years the Chinese have been silently but relentlessly stealing our lunch by underpricing American labor at un- and semi-skilled production levels. Fortunately, they don’t speak well English, or they would have become the back-office to the English-speaking world.”
——————————————————————————-

Lafayette,
For fifteen years, the US corporations were dismantelling their manufacturing operations here in the US, and shipping the factories to China to take advantage of the extremely low wages and almost nonexistent environmental, working conditions and workers rights regulations. It is free for all against the working people in China that is being enforced by brutal authorities that is enforcing slave like working environment for these Chinese helpless workers.
Do you want the US workers to accept and work under such almost slavery conditions??!!
Not only un- and semi-skilled work is going offshore but also many skilled and professional jobe are shipped by US corportations to outside the courntry. Chief among these jobs are engineering and computer programming jobs.
Any professional and semi-professional jobs that can be performed using digital information, can be shipped outside the country. For example, accounting , legal reports and interpreting X-rays photographs etc etc.
In India they speak very good Englis, it is their national language and India is becoming the back office for many US corporations.
A second look has to be given to that “globalization fiasco” and dramtic changes have to be implimented, otherwise the US middle class will disappear in the very near future and the country will be compromised of a very thin fabulously rich class over a population of struggling and poor class.

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By Lafayette, May 23, 2011 at 3:25 am Link to this comment

FALSE PROMISES

Sam: Americans are wimps.

Not far off. We’ve become wimps; grown fat, dumb and complacent. How?

Too much of the Good Life that has suddenly come to a screeching halt. Now even the middle-class in once-thought “solid jobs” have to be cautious about how they spend.

We were lulled into believing false promises of a Market Economy that would provide everything at the right price such that our slightest whimsy would be satisfied.

And for fifteen years the Chinese have been silently but relentlessly stealing our lunch by underpricing American labor at un- and semi-skilled production levels. Fortunately, they don’t speak well English, or they would have become the back-office to the English-speaking world.

UNLEARNED HISTORY LESSON

What we seem not to have learned is that this recession will be slow and excruciating - because those jobs at the un- and semi-skilled levels, by and large, are not coming back to America. So, what to do?

Well, we could adhere to the current Replicant Nostrum that “austerity” is going to bring back growth by, as the Economist Paul Krugman calls it, the “Confidence Fairy”. Bringing down expenditures will supposedly give confidence to the private sector to go out and spend us out of the recession.

Any dork should know, or get to a nunnery if they don’t, that the private sector marches to a different drummer. It will only respond to Consumer Disposable Income that starts buying more goods/services. And, sorry to say, most of those goods will be supplied by the Chinese, exactly as in the past.

So, we close the door on Chinese Goods? Which places us back in the 1920s when exactly the same restrictive Import Policy led to a worldwide deceleration of trade (as our major trading partners adopted the same policy). Which hurt our exports and thus contributed to further job-losses.

MY POINT: The recessional mess

The only way out of this Recessional Mess, which the Replicants so blindly drove us into, is to spend our way out of it - and the deficit be damned.

In economics, for every dollar that the government spends, that dollar multiplies as it works its way through the economy. And each time that dollar multiplies it will generate tax revenue that helps Uncle Sam pay his debt. (How? Here is how.)

Once the private sector sees Americans spending solidly but not unwisely, it will start hiring more workforce to meet the upsurge in demand.

But only then and not before ...

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By Samson, May 23, 2011 at 1:35 am Link to this comment

When will American workers strike against the same
‘austerity measures’, which are presented hear as a
need to ‘balance the budget’ or ‘control the deficit’?

Americans are wimps.

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THX 1133 is not in the movie...'s avatar

By THX 1133 is not in the movie..., May 22, 2011 at 9:18 pm Link to this comment

Fat Freddy, May 21 at 3:03 pm Link to this comment
TRAPPED INSIDE AN ECONOMIC PRISON

Nigel Farage MEP (UKIP)
=======================
Great vid. Nigel seems one of the few who grasps the
dirty little secrets. Thanks FF. Cheers

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By Bilejones, May 22, 2011 at 4:28 pm Link to this comment
(Unregistered commenter)

It’s telling that he didn’t get bail until he’d resigned.

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By THX 1133 is not in the movie..., May 22, 2011 at 4:24 pm Link to this comment

diamond, May 22 at 3:51 pm Link to this comment
“Capitalism’ is not the problem?” Of course it’s the
problem. At least the global, rabid, predatory
colonial, militaristic version that America is
ramming down everyone’s throats all over the world
is.
=================================
Couldn’t agree more. Iceland is proving to be a new
model and example of NOT dancing to the IMF Tango.
They elected to go for the short term pain over the
long term addiction and dependence.
If I hadn’t already moved to Asia I’d be giving
Iceland a serious consideration; their future is
looking very bright indeed. Cheers.

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By mc.murphy, May 22, 2011 at 4:22 pm Link to this comment

“By Lafayette, May 22 at 12:46 am
THE MENTAL ROT

FF: I don’t think the problem is capitalism.

My sentiments precisely. “

I gather you’ve seen that image of the little fish being gobbled by the larger fish, ad infinitum… that’s capitalism, and we all know where it ends.

The current iteration is socialized capitalism, which simply distorts, accelerates and magnifies the inherent flaws in capitalism, is perhaps no more than capitalism’s natural tendency to pervert and accrue all power to itself-so there your apologia may well be just wishful thinking on your part. Infinite growth in a finite world is simply untenable.

http://mosquitocloud.net/its-capitalism-stupid/

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By diamond, May 22, 2011 at 3:51 pm Link to this comment

“Capitalism’ is not the problem?” Of course it’s the problem. At least the global, rabid, predatory colonial, militaristic version that America is ramming down everyone’s throats all over the world is. And people are waking up. All over the world people are marching in the streets because they know they’re being shafted at the whim of the IMF and the World Bank, the shock troops of economic rationalism and the morals-free economic teachings of the University of Chicago. People have had enough of being shoved around like pieces on a chessboard: as if they don’t matter. Because it’s become more and more obvious to them that the people who supposedly govern in their name are doing no such thing. They are governing in the name of corporate greed, war, delusion, ideology, cruelty, deceit, religious intolerance and racism. You only have to look at what has happened to the people of Japan because their leaders chose to lie to them about the dangers posed by building 55 nuclear reactors in one of the world’s biggest quake zones.

And now that the greedy pigs that run the global economy have stolen all the food from the trough, the people they robbed are expected to make up the difference by being shafted yet again and having their pay, working conditions and their pensions cut while the greedy pigs go on cramming food down their throats without pause. It’s a disgrace, and if nothing is done to curb economic rationalism and globalization, which are nothing more than excuses for America’s economic and military domination of the entire world, a hard rain really is going to fall. And it’s going to fall on these leaders who don’t lead and who take their orders from unelected global gangsters. They will share the fate of Gaddafi and Mubarak if they don’t come to their senses and start governing for the people who pay their salaries instead of treating them like serfs.

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By Lafayette, May 22, 2011 at 12:46 am Link to this comment

THE MENTAL ROT

FF: I don’t think the problem is capitalism.

My sentiments precisely. Capitalism is too rooted in human activity and economic development to be abandoned as the source of all evil.

What is evil is the manner in which we allow unbridled capitalism - by means of the uniquely American notion that there should be no constraints on human endeavor and particularly entrepreneurship.

Because (supposedly) it is by entrepreneurship that we build new industries with new products/services and thus new jobs - from which flows all the economic Milk & Honey. (I.e., the fundamentals of of our “pursuit of happiness”.) All of which is too great an over-simplification to be believable.

A look at the Gini Coefficient (where higher means worse, lower means better) shows how, in the US at least, the Milk & Honey is shared in an almost totally unfair fashion.

Further studies (look here) show that only 20% of Americans obtain 85% of the Total Net Worth (Total Wealth minus Debt), whilst the remaining 15% is shared by the rest of us poor slobs.

Which suggests only one fact: American Capitalism has gone awfully awry.

MY POINT: How to fix it

Let’s look again at the Gini Coefficient. What stands most out about the European Nations, which have coefficients some ten to fifteen points lower than Uncle Sam, is that they tax heavily both Income and Capital Gains.

So, why does not America do the same? Because we, the sheeple have elected a political class that has bought hook, line and sinker the notion that “enterprise must be rewarded without limit”. Right or Left, they are all mesmerized by wealth and the accumulation of riches.

It has become the mental rot eating away at our nation. Why?

GOOD QUESTION

Because our society has a unifocal cultural attribute, which is Money. It defines our “pursuit of happiness” and, recently, our decent into the hell of economic misery for many.

What is it that mothers used to tell their children? “Money cannot buy you happiness!”

We forgot that one, didn’t we ...

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By mc.murphy, May 21, 2011 at 4:00 pm Link to this comment

Fat Freddy, May 21 at 3:03 pm

It’s not unlikely that you will get much hand wringing and grief for linking to
Nigel Farage. But, but,.... he’s UKIP!

Well, I’ll take truth wherever I find it, and Nigel speaks truth to unaccountable
oligarchic and tyrannical tendencies nacent in the corrupt, ECB run monetary
European Union.

Thanks for the linky.

http://mosquitocloud.net/

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By Fat Freddy, May 21, 2011 at 3:03 pm Link to this comment

TRAPPED INSIDE AN ECONOMIC PRISON

Nigel Farage MEP (UKIP)

http://www.youtube.com/watch?v=2YcgACl1Sr8

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By mc.murphy, May 21, 2011 at 1:39 pm Link to this comment

johnnyfarout, May 21 at 12:42 pm

Hey, I like Greg Palast, I like Chossudovsky, but I have a mind of my own, and I
don’t buy everything anyone is selling just because because I usually agree with
them.

In the meantime, Greece is likely going to blow up.

“Here’s a thought: Was it a coincidence that both the IMF and the ECB
threatened Greece at approximately the same time? And this just before further
“crisis” talks commenced. We would tend to believe that the soft restructuring
has already been worked out (though the markets may not like it, or even
tolerate it).

The larger problem that the Eurocrats are having has to do with what we’ve
mentioned previously: the “immovable rigor” of the EU’s position has now run
directly into the reality of Greek bankruptcy. And since the bankruptcy was not
negotiable, it was the Eurocrats who ended up giving way. But since the initial
bailout was illegal and the subsequent soft restructuring even moreso, the
rhetoric preceding the climb down must be appropriately cataclysmic.”  — 
http://www.thedailybell.com/2349/Greece-Gets-Pounded-Before-Further-
Bailout.html

http://mosquitocloud.net/

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By mc.murphy, May 21, 2011 at 1:30 pm Link to this comment

johnnyfarout, May 21 at 12:42 pm

If you don’t like Overton’s window, you may get a hold of Occam’s razor…

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By johnnyfarout, May 21, 2011 at 12:42 pm Link to this comment

mc.murphy
What is “Overton’s” window? Is that the transom Glenn Beck looks at everything through? It’s a mountain top?! A lot of ironies in the fire is all I’m saying. I agree he’s a big dick, but he’s been in rodeos before and knows his way around the stables…so to speak. You think he took his shot in the dark and hit his own foot. Perhaps. Aristocrats have been known to fall out windows and fall off horses. Perhaps at the last palace spectacle of governance and fun for these guys, every body was walking around making that hand across the throat gesture with tongue hanging out behind his back. The Americans were going to get him…wink wink.
http://www.gregpalast.com/strauss-kahn-screws-africa/

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By mc.murphy, May 21, 2011 at 11:58 am Link to this comment

johnnyfarout, May 21 at 11:09 am

Come on; DKS was as much the IMF’s man, as Obama is a Wall Street creature.
They made noises and gestures to create opinions and disarm the opponents.
—that’s all.

as much as I like Chossudovsky; not everything is a conspiracy, and sometimes
thinking that way prevents us from checking in through Overton’s window.

DKS was a chief conspirator in his political destruction, as much as Spitzer was
in his, if for no other reason than not guarding against your weaknesses at
those high levels of Palace intrigue, renders you an idiot and deserving of the
fall.

“As a conspiracy it doesn’t look as though there’s much in the way of lift to
keep it in the air in any sort of convincing shape. Strauss-Kahn belonged to the
familiar phalanx of political powerful men confident that they can get away with
hitting on women, confident that either the women they’ve attacked won’t be
believed or won’t dare to try to expose them. The collapse of Gov.
Schwarzenegger’s marriage, amid disclosure of sensationally tacky behavior on
Arnold’s part,  after years of allegations about his assaults, isn’t helpful to
Strauss-Kahn either.”  -  Alexander Cockburn

http://www.counterpunch.org/cockburn05202011.html

http://mosquitocloud.net/

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By mc.murphy, May 21, 2011 at 11:40 am Link to this comment

VillageElder, May 20 at 6:32

“Thank you Ayn Rand”

I understand the the spirit in which you make this snarky statement, but it is wide off the mark in the
following respect.

Randianism is most often associated with libertarians and in this silly season especially with Paul Rand.
Now there is plenty on the economic side to argue against, from the left, with American Libertarians.
The FED, IMF, World Bank, and NAFTA are not amongst them. It’s far more a problem of Clintonitis than
Randianism.

In that respect, if we shake off the Bernaysian influences on our fragile minds, Being 100% against
Empire’s wars, and the antics of the Uniparty’s economic strictures, Paul Rand is a veritable Leftist ...

http://mosquitocloud.net/

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By johnnyfarout, May 21, 2011 at 11:09 am Link to this comment

As elisalouisa, I also see a knocking down from such high station this man of international status. Not that I have sympathy for the machinations and styles of conflict in the ruling class’s world, but it is hard not to question these racy circumstances, where an immigrant’s hard life is contrasted against such privilege and towering wealth. Here is one of the gentle removal techniques the powerful and secure use against one another. Be a power broker from European monetarist factions, and when you show up in New York, a citadel of American finance and hegemony… out then materializes the long uniformed arm of American power to punish the European faction with an international scandal worthy of 007’s Hollywood antics. If anything, DSK seems to have misjudged his opponents. Little did he suspect that they would grab him in his rented boudoir and concoct the raciest story of the day! The cabal of powerful American lords can now order him, in medieval fashion, brought from the dank and foul prison their unionized minions threw him. We can just hear them say, “Bring out that nasty Bilderberger Baron in his clanking and filthy silver chains we bound him, and let us see the offending member that ravished the innocence of the poor, hardworking, downtrodden African maiden!” Then all snicker up their silk sleeves and wink one to another, as they order up a suitable replacement.
http://www.globalresearch.ca/index.php?context=va&aid=24866

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By G.D. Wymer, May 21, 2011 at 10:56 am Link to this comment
(Unregistered commenter)

Entropy2 states the real nature of the beast most accurately. Thank you! If there
is anything that we can call pure capitalism it would be effective only on a very
small scale in communities where the accumulation of capital does not fall
under the control of a few, the almost necessarily emergent plutocracy.

Adam Smith certainly was not a capitalist, a free marketer, nor a supporter of
laissez-faire as it is misunderstood and described today by either the right or
the left in U.S. politics and economic discussion. There exists no such things.
The IMF and the U.S. are intimately connected in global financial policies
affecting the central banks in all nations in which the status quo can be
maintained.

Once the supporting political and banking infrastructures have been built and
enough capital consolidated in a few banks or financial institutions and when
the most significant growth in any economic system operating within those
structures occurs in the financial sector in which a meta-economy is created to
serve the few who are able to control those investment vehicles (CDO’s, credit
default swaps, etc. in this most recent example), then the prospect of allowing
those institutions to fail becomes politically and economically dangerous for
those who control both the political and financial institutions.

Thus, an explanation of such a crisis and a justification for the system that
created it must be proffered to the public in order to maintain societal
acceptance of that system and its institutions. In the United States especially,
where there are only two significant political parties, it becomes essential that
both parties support the narrative and mythology of the “free market” even if it
means redefining for the public the terms and fundamentals of that idealized
system.

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By truedigger3, May 21, 2011 at 10:09 am Link to this comment

Re: By elisalouisa, May 21 at 8:07 am

elisalouisa wrote:
“....., could this be a set up where DSK’s weakness was used by his enemies to their advantage?
The timing and the instant press coverage are among the details that leave one to wonder.”
——————————————————————————-
elisalouisa,
I don’t think so. The long track record of DSK , up to few weeks ago, whether in France as a finance minister or internationally in the IMF,  speaks volumes of his adversarial positions against the workers and the common people and his love for privatizing publicly owned companies.
It was will known that he will run for presidential elections, can you believe that, as a Socialist Democrat ,  next year and he was talking the general sweet talk, without any definite plans or intentions for action. It is all for bullshiting the voters. Doesn’t that remind you with our Obama?.
Also, DSK has a KNOWN track record with similar incidents with women not all are hotel maids and one is a reporter. In such type of crime, many women don’t come forward, so I suspect there are many UKNOWN incidents that will be known in the near future.
The videos, and they say there is DNA material being analysed and the solid and consistent way the woman told the incident all support her allegations which resulted in a grand jury indictment.

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By Fat Freddy, May 21, 2011 at 9:37 am Link to this comment

entropy2

Agreed. There’s principles of Socialism and 16th century Mercantilism at play here. Both have their fare share of economic fallacy. Unfortunately, 99.9% of people haven’t the first clue of what real economics is. I think Samuel E Konkin III said it best:

Economics is a dismal science. Those understanding certain economic concepts profit flamboyantly. Economics is a tool corporations and governments use to control society. Those understanding economic concepts have toppled governments that refuse to face the very same concepts. Economics is a meaningless college exercise. Speculators understanding economics make millions of dollars and save others from fianancial ruin. Here is our problem: all of the above statements are true.

  If that makes you think there’s an inconsistency in the use of Economics, you are correct. With a lower-case “e”, economics is the study of relations between people involving [the exchange of] goods and services. With a capital “E”, Economics is an institution financed mostly by government and its tax-privileged foundations. With foundation money, this institution controls – however imperfectly – those who would learn and teach economics at government schools and private institutions.

http://www.nostate.com/wordpress/wp-content/uploads/2009/07/An_Agorist_Primer_by_SEK3.pdf

Intro to lower-case “e” economics, here:

http://mises.org/austecon.asp

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By truedigger3, May 21, 2011 at 9:17 am Link to this comment

Lafayette wrote addressing me:

“The IMF is NOT responsible for America’s Toxic Waste and Great Recession. And though its remedies cause suffering in some nations - like Greece presently - the IMF never went were it was not asked for assistance. It was the solution of last resort.

The author of this article is casting loony-Left aspersionS upon the IMF. She has no grounds to do so, based upon the charter of that organization.”
——————————————————————————

Lafayette,
I DID NOT say the IMF IS responsible for America’s Toxic waste and great recesssion. Yout were defending the bail-out and I was saying you can save the banks without bailing out and rewardingthe the banksters looters thieves who caused this disater deliberately to enrich themselves and got away with their loot without a scratch!

The writer of article is right about the sinister role of the IMF in the European disaters. The IMf kne w, and didn’t warn that, that there were real-estate bubble disasters that were being caused in some European countries, and were being inflated and encouraged by reckless very easy lending practices from the big European banks.
When the bubble burst, the IMF insisted that it will only give loans to these countries if the big banks get every cent of their money back, without any restructuring of the debt ane writing some of it out.
The big banks were rewarded for their recklesssness or malice and the common people were left to pay back these loans although they had nothing to do causing these bubbles that was caused by greedy and corrupt big banks and local real-estate developers.

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By truedigger3, May 21, 2011 at 9:01 am Link to this comment

Re: By Lafayette, May 21 at 5:49 am


Lafayette wrote addressing me:

“The IMF is NOT responsible for America’s Toxic Waste and Great Recession. And though its remedies cause suffering in some nations - like Greece presently - the IMF never went were it was not asked for assistance. It was the solution of last resort.

The author of this article is casting loony-Left aspersionS upon the IMF. She has no grounds to do so, based upon the charter of that organization.”
——————————————————————————

Lafayette,
I DID NOT say the IMF IS responsible for America’s Toxic waste and great recesssion. You were defending the bail-outs and I was saying you can save the banks without bailing out and rewarding the the banksters looters thieves who caused this disater deliberately to enrich themselves and got away with their loot without a scratch!

The writer of article is right about the sinister role of the IMF in the European disaters. The IMF knew, and didn’t warn that, that there were real-estate bubble disasters that were being caused in some European countries, and were being inflated and encouraged by reckless very easy lending practices from the big European banks.
When the bubble burst, the IMF insisted that it will only give loans to these countries if the big banks get every cent of their money back, without any restructuring of the debt ane writing some of it out. The IMF didn’t care less about the terrible effect of that on the economy of these countries and the their common people.
The big banks were rewarded for their recklesssness or malice and the common people were left to pay back these loans although they had nothing to do withcausing these bubbles that was caused by greedy and corrupt big banks and real-estate speculators.

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By elisalouisa, May 21, 2011 at 8:07 am Link to this comment

So, all you interesting and very knowledgeable Truthdiggers, could this be a set up where DSK’s weakness was used by his enemies to their advantage?

The timing and the instant press coverage are among the details that leave one to wonder.

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By entropy2, May 21, 2011 at 8:04 am Link to this comment

@Fat Freddy - The statist left will never acknowledge that capitalism, in its current form, could not exist without extreme state support, intervention and coercion of the masses. Central banking, state-maintained and public-funded infrastructure, security and education, artificial monopolies of intellectual property, regulatory barriers to small-scale competition, as well as direct subsidies to corporate behemoths, all have been enacted and maintained by the state for the benefit of the plutocracy (populist PR pap from both the statist left and right notwithstanding).

It’s much easier for the left to buy into the statist right’s definition of this mess as the “free market” than to understand that the corporate state is socialism…centralized control of the means of production under the aegis of the state.

But, ultimately, neither the statist left or right want true power to be held by the individuals who make up the great unwashed. The right doesn’t want to lose its supply of exploitable units and the left doesn’t really believe that the unwashed can be trusted with freedom over their own lives.

So they work in a symbiotic relationship under a false dichotomy in order to maintain their elite status.

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By Lafayette, May 21, 2011 at 6:34 am Link to this comment

Typo: I have suggested many a time that the solution to Exaggerated Riches is exaggeratedly low income and capital gains taxes.

Should read: I have suggested many a time that the reason for Exaggerated Riches is exaggeratedly low income and capital gains taxes.

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By doublestandards/glasshouses, May 21, 2011 at 6:26 am Link to this comment
(Unregistered commenter)

http://www.bbc.co.uk/news/world-us-canada-13358745

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By Fat Freddy, May 21, 2011 at 6:17 am Link to this comment

Zimbabwe To Trade Diamonds For Gold As It Prepares To Launch Gold-Backed Currency


Let the bombing by the IMF, NATO commence.

http://www.zerohedge.com/article/zimbabwe-trade-diamonds-gold-it-prepares-launch-gold-backed-currency

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By Fat Freddy, May 21, 2011 at 6:12 am Link to this comment

Big B

Let me be more specific. Central banking is not a function of free market capitalism.

A central bank, as Smith notes, is not a product of natural development. It originates through government favors and bears special privileges and responsibilities. Typically, it serves as banker for the government and for the ordinary banks and monopolizes or dominates the issue of paper money. From this privilege derive the secondary functions and characteristics of a modern central bank: it guards the bulk of its country’s gold reserve, and its notes and deposits form a large portion of the cash reserves of ordinary banks. It is constrained under a gold standard, though less tightly than competing banks would be, by the obligation to keep its notes redeemable. When unable to meet this obligation, it typically suspends payments and goes off the gold standard, while its notes acquire forced currency. (One excuse for such actions is that reserves held with it can be guaranteed safe only if its notes remain in circulation even with their redemption suspended.) Control over the volume of its own note and deposit issue gives the central bank power over the size or scale of the country’s money and banking system and over the general credit situation.

The special privileges and dominant position of a central bank thrust responsibilities onto it that dilute or override its profit orientation. This is true of fully evolved central banks like today’s Bank of England and the Federal Reserve System in the United States. As “lender of last resort,” the central bank is supposed to come to the rescue of the ordinary banks during shortages of reserve funds and scramblings for currency, lending them its own freshly issued bank notes. Disregarding narrow profit considerations, it is supposed to use its influence over money, credit, and interest rates to serve public objectives such as, before 1914, keeping the country’s currency firmly on the gold standard and, nowadays, resisting inflation while promoting production and employment (to the extent that those objectives are feasible and compatible).

Vera Smith wrote The Rationale of Central Banking and the Free Banking Alternative as a doctoral dissertation at the University of London School of Economics under the supervision of Friedrich A. Hayek.

http://www.econlib.org/library/LFBooks/SmithV/smvRCB0.html

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By Fat Freddy, May 21, 2011 at 5:51 am Link to this comment

?

I don’t think the problem is capitalism. I think it’s a specific kind of capitalism. We’ve created a mutant, viral form of capitalism, and this mutant form of capitalism, which I think is a predatory form of capitalism, has created an extremely unstable, unsustainable, unjust, and very dangerous world.

- John Perkins

http://www.zerohedge.com/article/extended-confessions-economic-hit-man

http://www.youtube.com/watch?v=eKi3UKPKBwg

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By Lafayette, May 21, 2011 at 5:49 am Link to this comment

THE SOLUTION OF LAST RESORT

TG3: Does saving the banking system mean saving its top excutives with their tens of billions of bonuses and huge salaries.
Saving the banking system does not mean saving the thieves who baknrupted it and looted it.

You may be right in the above statement. But, sorry, as true as your claims may be, they are not germane to the debate regarding the IMF.

The IMF is NOT responsible for America’s Toxic Waste and Great Recession. And though its remedies cause suffering in some nations - like Greece presently - the IMF never went were it was not asked for assistance. It was the solution of last resort.

The author of this article is casting loony-Left aspersionS upon the IMF. She has no grounds to do so, based upon the charter of that organization.

(If we want to blame the IMF for something it should be condoning the internal licentiousness on behalf of far too many of its male staff.)

ABOUT EXAGGERATED WEALTH

As far as your claims above, I have suggested many a time that the solution to Exaggerated Riches is exaggeratedly low income and capital gains taxes. With tax regimes at near confiscatory levels (above 10/20 megabucks a year), we shall seea great deal less of their incestuous financial behaviour, particularly in Investment Banking.

I am hoping sincerely that Shniederman hoists a good many of them on their petard. I agree with you, their ill-got gains are immoral given the pain and angst that far, far too many Americans (and others around the world) are feeling because of their devious schemes.

MY POINT

Let’s not get mad, let’s get even. Let’s get them where it hurts the most, in their wallet.

Let’s change this political class who have abided Exaggerated Riches by one that is willing to pass legislation that raises considerably Income and Capital Gains Taxes - to pay for a Progressive Agenda as well as pay of the National Debt.

The added revenues from these measures would help finance a Progressive Agenda -one that paved the way back to full-employment and an America better able to meet the challenges of this century, which are great.

It’s time we woke up to the evolutions our country is going through, because they necessitate fundamental reforms in many areas.

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By Fat Freddy, May 21, 2011 at 5:49 am Link to this comment

Big B

Who said libertarians believe in “unregulated capitalism”? Libertarians adhere to strict ethical guidelines based on the “Non-Aggression-Principle”. We also endorse a “non-interventionist” foreign policy. You need to get your facts straight.

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By Big B, May 21, 2011 at 5:16 am Link to this comment

Fat Freddy

Well, are you a libertarian or not? These banksters at the IMF and federal reserve are just practicing unregulated capitalism in its purest form. They won game. They now get to change the rules so that no one else can compete. The big eat the little until there are only a few (or one) big left. That’s how capitalism works. That’s how it has always worked.

What are you, a fucking commie?

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By Trucker Mark, May 21, 2011 at 2:19 am Link to this comment
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My own theory of the reasons behind DSK’s rapid departure from the IMF and the French Presidential race is based more on his outspoken criticism of the Dollar and his repeated recent calls for the establishment of a new world reserve trading currency.  His Socialist Party membership, the economic direction that might have led France, and the potential amount of profit cost by having a Socialist in power in France are convenient secondary birds that have been potentially killed with a single stone.

Did anyone besides me see how fast Geitner was demanding a new IMF chief?  It was only five days (three business days) between DSK’s arrest at Kennedy Airport and Geitner spouting-off about replacing him.  I’m suspecting some sort of conspiracy theory myself in regard to DSK.  The question is who or what entity stood to gain the most from not having DSK as the IMF Chair, or whether his Socialist beliefs and his potential for winning the French Presidency were enough of a reason to try to set him up. 

Did anyone notice that the temporary replacement for DSK at the IMF is a former J.P. Morgan vice-chair, who is certainly not a Socialist?  Anyone hear any recent call to strip the US of our world reserve trading currency status in the last couple of weeks or so?  Hmm, our Dollar sure is up a fair amount against many (but not all) world currencies in the last couple of weeks too. 

Nomi Prins has a very interesting argument for the downfall of DSK and who or which entities might be behind such a conspiracy.  Not all Socialist nations are foundering, witness Brazil and Venezuela, but I do know that in both cases, wealthy capitalists and their banking empires have taken the political and economic change pretty hard too.

I might suspect that a conspiracy against DSK and his outspoken direction for IMF policies and a new world reserve currency might very well have come from within the US or US-led world bankster community, hoping to avert a major Socialist change of direction as well as to quiet calls for a new world reserve currency. 

If the US Dollar were to lose world reserve trading currency status, every additional Dollar printed that was not supported by economic growth would just directly devalue our Dollar instead of our being able to spread the devaluation throughout the world trading community, which would have devastating economic consequences for the average American citizen, as well as many of our wealthy banksters, capitalists, and industrialists too.

I also have serious questions about the Fed, especially from where that $12 trillion that was lent off-budget, at well below market interest rates, to major world banks during the early stages of the 2008 collapse even came from, as well as questions related to some accounting as to any return of the borrowed funds too. 

My guess is that Bernanke talked Congress out of auditing the Fed because they and the rest of the world banking community weren’t going to like what they found-out, and my guess is that quite possibly our own bankster community is what entity is among the leading potential suspects responsible for the overnight demise of DSK and his anti-capitalist and non US Dollar-centric policies, while French supporters of President Sarkozy come in a distant second in my opinion.

My guess is that there was just too much money and potential profit involved not to attempt to silence an outspoken politically-connected critic of US Dollar and bankster economic policies.

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By truedigger3, May 21, 2011 at 2:15 am Link to this comment

Re: By Lafayette, May 20 at 11:52 pm,

Lafayette,

Does saving the banking system mean saving its top excutives with their tens of billions of bonuses and huge salaries.
Saving the banking system does not mean saving the thieves who baknrupted it and looted it.
Didn’t these banksters looters know they were bundling fraudlent mortgage securities. Didn’t these banksters looters themselves, encouraged and helped spread of these fraudlent mortgage practices.
Why soving the financial crisis is done on the back of the poor and working class, while the banksters looters escape with their bonuses, fat salaries and stock options untouched.
Why not nationalize the privately owned Federal Reserve Bank, which is owned by the banks that the Fed suppose to regulate and watch???!!.
Does the extremely profitable oil companies, and many corporations that are sitting on trillions of dollars of cash deserve more billions of dollars of subsidies and tax cuts and rebates from the federal government and the bankrupt states.
Why the super-wealthy is still getting more tax cuts.??

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By truedigger3, May 21, 2011 at 1:36 am Link to this comment

This is an excellent informative article.

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By Lafayette, May 20, 2011 at 11:52 pm Link to this comment

AN OUNCE OF PREVENTION

NP: The threat in 2008? A worse crisis will occur if the financial system isn’t saved. The related threat surrounding the debt cap debate today? A worse crisis will occur if we default on the debt we created to save the financial system.

This article is full of tendentious accusation and sarcasm - as the above. NP needs a course in EC101.

Who goes to a bank and negotiates a substantial loan without the bank obtaining a Credit Report and looking at their financial situation? Both give the bank some very evident proof of one’s financial situation.

What should the bank do, if it realizes that you are living a lifestyle quite beyond your means. It can refuse your loan. Frankly, as an individual, that is precisely what they would do - they show you the door.

But the IMF cannot do that. It must find ways to allow the loan in order to overcome an Emergency Situation, for which they were called - and is its chartered mission.

Remember, the funds given to the IMF by subscriber countries belongs to national treasuries sourced by taxpayer contributions. In our instance, they are taxpayer dollars that are lent to countries to prevent loan defaults. The IMF is accountable to its member countries when it comes to making Nonperforming Loans.

Shouldn’t you (a taxpayer) be a bit concerned about how that money is employed? Do you want good money thrown after bad money? Time and time again, the IMF (in most instances) has been called into just such situations.

That is the case of Greece, Ireland and Portugal were successive governments, both on the Left and Right, have been profligate - in order to maintain politicians in power. The politicians call upon the IMF to install draconian measures that they themselves do not have the courage to employ.

Greece is a particular case. It has a very week industrial structure and depends greatly upon tourism for foreign revenues.

In the present economic crisis, ongoing in Europe for far longer than in the US, the situation became finally catastrophic. Because the Greeks felt, hiding behind the euro, that they could get away with their fiscal profligacy.

As for jobs …  yeah, we’ll get back to you on that.

Why is finance so important a part of our economic fabric? Because, we, the consumer, like credit. It leverages our Disposable Income allowing us to make purchases that we desire and could not otherwise transact. It is a direct shortcut to living beyond our means and it works far too well. How’s that?

It becomes an intrinsic part of our GDP-formation. Without it, GDP is less and so are jobs are fewer or less well paid. Employment is necessary for one and only one purpose: To Supply consumers the goods/services that they Demand. Credit helps the economy maintain that Demand. Without Credit, demand plunges and, as we have seen, unemployment rises.

So, saving the asses of the collective Finance Industry was a sine qua non for both Dubya and BO & Co who was faced by the very same necessity.

Which means, yes, that they adhere to some very austere spending targets. Meaning that profligacy, employed to “make work” to keep unemployment low for electoral purposes, ends with a screeching halt.

Why is it that the three countries in dire need of IMF funds (Greece, Ireland and Portugal) are all small countries who do not have the economic strength to manage their debt? That is, reduced Demand does not allow them to balance budgets.

MY POINT

Let’s remember that, when it comes to national accounts, an ounce of prevention is worth a ton of cure.

NP thinks that jobs grow on trees and all that is necessary is for the the IMF to spread some manure around tree trunks. That’s not the way it works, NP, who should know better.

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By VillageElder, May 20, 2011 at 6:32 pm Link to this comment

This article is a wonderfully succinct description of the damage done by the IMF.  Currently we in the USA are experiencing the beginnings of the disasters brought about by the Chicago School.  Thank you Ayn Rand.

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By Fat Freddy, May 20, 2011 at 2:56 pm Link to this comment

Don’t forget, a loss is only a loss when you sell it. You can thank the Financial Accounting Standards Board (FASB) for that. Well, sort of. In the wake of all of Lehman’s little tricks with the off-balance seet reporting of their repos (repossession agreements), FASB decided to implement new standards for OBS transactions. Off-balance sheet transactions are very helpful for business, but unfortunately, some financial institutions used it to hide losses. FASB implemented rules 166 and 167. However, banks like JP Morgan seemed to be the biggest perpetrator of OBS manipulations to their balance sheets. So, of course, the US Congress strong-armed FASB to grant deferments to the new rules to specific banks, (if you guessed TBTF you would be right), and while they were at it, suspended rule 157 - that dreaded mark-to-market rule. The banks are still insolvent. Soon, everyone will know it. But by then, it will be too late. They don’t call him “Zimbabwe Ben” for nothing.

AS far as IMF/BIS shenanigans…take a look into why we are bombing Libya. Before the bombing, Libya was only one of 5 central banks that were not part of the IMF/BIS system. Cuba, N. Korea, Iran and Sudan are the others.

http://www.examiner.com/finance-examiner-in-national/america-s-true-reason-for-attacking-libya-becomes-clear-with-new-central-bank

Then there’s the Ivory Coast. You see who the French and UN/IMF supported in that struggle, right?

You just can’t make this shit up.

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