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Congress Blocks Indiscriminate Imf Aid For Europe

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http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100005734/congress-blocks-indiscriminate-imf-aid-for-europe/

Europe may have to clean up its own mess after all. The US Senate has voted 94:0 to block use of taxpayers’ money for IMF rescues that make no economic sense or bail-outs for countries like Greece that far are beyond the point of no return.

“This amendment will help prevent American taxpayer dollars from underwriting dysfunctional governments abroad,” said Texas Senator John Cornyn, the chief sponsor. “American taxpayers have seen more bailouts than they can stomach, and the last thing they should have to worry about are their hard-earned tax dollars being used to rescue a foreign government. Greece is not by any stretch of the imagination too big to fail.”

Co-sponsor David Vitter from Louisiana said America had run out of money. “Our country already owes trillions of dollars in debt. We simply can’t afford to take on other countries’ debt in addition to our own.”

It is unclear where this leaves the EU’s $1 trillion “shock and uh” package. Urlich Leuchtmann from Commerzbank said the IMF share of $320bn was the only genuine money on the table, the rest being largely euro smoke and mirrors, or plain bluff.

The measure is an amendment to the US financial overhaul law. Backed by both parties, it can hardly be ignored by the Obama administration whatever Tim Geithner may or may not want to do. The bill has to go the conference for reconciliation with the House, but the point is made.

It instructs the US representative at the IMF to determine whether a country with a public debt above 100 per cent of GDP can be expected to repay IMF loans. If this cannot be certified, the US must oppose the rescue package.

This is obviously aimed at Greece, which will have a debt of 130 per cent by the end of this year. The debt will rise to 150 per cent by the end of its the rescue/death package, leaving Greece in a worse position than before.

The IMF share of the Greek bail-out is 30 times quota, multiples more than any other rescue in the history of the Fund. There is a very strong suspicion in Washington that the IMF is being misused by French chief Dominique Strauss-Kahn French presidential candidate in waiting – to support ideological purposes regardless of economic logic or sanity. This can (and in my view most likely will) destroy the credibility of the Fund itself unless the US and Asians can wrench the institution back from the Europeans.

The US is the IMF’s biggest shareholder and can veto aid packages, though it has never done so because the Fund has never been so stupid as to defy the world’s dominant financial and strategic power.

In this case it fair to assume that China shares many of the Senate’s concerns.

O dear, looks like this is going to get very interesting especially if the US takes the view of it's Senate!

However it appears giving the money to banksta's is clearly OK.

Not good news for the UK if we need IMF help.

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http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100005734/congress-blocks-indiscriminate-imf-aid-for-europe/

O dear, looks like this is going to get very interesting especially if the US takes the view of it's Senate!

However it appears giving the money to banksta's is clearly OK.

Not good news for the UK if we need IMF help.

I recall a recent thread that said the Europe had told us not to go crying to them if things get rough too.

Looks like we are Billy No Mates and the outlook is less than rosy.

p-o-p

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I recall a recent thread that said the Europe had told us not to go crying to them if things get rough too.

Looks like we are Billy No Mates and the outlook is less than rosy.

p-o-p

I imagine major holders of US Treasuries wouldn't be vetoed. ;)

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I recall a recent thread that said the Europe had told us not to go crying to them if things get rough too.

Looks like we are Billy No Mates and the outlook is less than rosy.

p-o-p

All we need to do now is block legislation on hedge funds and other vulture banking organisations and it won't just be a question of no support from Europe they will lock out all and sundry to get back at the first users of debt that have created havoc to their political and economic experiment.

Still this country can exist on financial engineering. Thing is there is not going to be demand for engineering dead duck economies where this is heading.

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The US makes up 17.09% of the IMF. We make up 4.94%.

Their share of the IMF bailout is EUR 54.7 bn. Their senators voted 94-0 against it.

Our share of the IMF bailout is EUR 15.8 bn. Will there be any debate in Westminster about our ability to afford to risk this much money on the mess in Europe?

This is an example where I think that direct democracy rather than representative democracy makes sense.

I cannot understand why one nation with an annual deficit of about 12% of GDP should contribute to the bailout of another nation with an annual deficit of around 12% of GDP. Surely we would be better off keeping the money for ourselves.

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http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100005734/congress-blocks-indiscriminate-imf-aid-for-europe/

O dear, looks like this is going to get very interesting especially if the US takes the view of it's Senate!

However it appears giving the money to banksta's is clearly OK.

Not good news for the UK if we need IMF help.

Dont forget the "special relationship"...that would be much the same "special relationship" where big bubba ties his cell mate to his bed and rogers him senseless.

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It's not all doom and gloom though. All that money that we thought we had wasted on the ID card project wasn't.

It can't take much of a tweak to to replace "Identity" with "Ration".

p-o-p

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The US makes up 17.09% of the IMF. We make up 4.94%.

Their share of the IMF bailout is EUR 54.7 bn. Their senators voted 94-0 against it.

Our share of the IMF bailout is EUR 15.8 bn. Will there be any debate in Westminster about our ability to afford to risk this much money on the mess in Europe?

This is an example where I think that direct democracy rather than representative democracy makes sense.

I cannot understand why one nation with an annual deficit of about 12% of GDP should contribute to the bailout of another nation with an annual deficit of around 12% of GDP. Surely we would be better off keeping the money for ourselves.

Do you seriously think it would have gone through if GS, JP Morgan etc... where on the hook for billions with Greek bonds?

Direct democracy only happens when you haven't got VI's interfering with the senators who vote.

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This is a global financial crisis, when will people realise that the IMF are themselves in no position to help anyone?

Knock on the door cap in hand if you want, but there'll be no answer.

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Looks like it’s the nuclear nations that will have a future.

Population cull okay so long as it’s not the old block? All other countries to return to farming and tourism after total collapse? How much more occupation to smooth things through the transition?

Earlier I was thinking that Orwell had got it very wrong and that the collective state looked doomed, maybe he just interpreted it wrong!

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Then again the Hedge Fund/Wall Street lobby may be behind this, cloaked in popularism. A win-win situation for Congress.

Who stands to benefit most, if the IMF doesn't fund Europe?

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This is a global financial crisis, when will people realise that the IMF are themselves in no position to help anyone?

Crisis, what crisis? It's the cashing-in phase of the bankster's global megafraud scheme that has been going on for a few years now!

See this other thread here how they grab our money (the Greece bailout is peanuts compared to this fraud):

http://www.housepricecrash.co.uk/forum/index.php?showtopic=143227

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I am really amazed that markets have ignored this completely to-day.

I expected it to be bigger news than it appears to have been so far.

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http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100005734/congress-blocks-indiscriminate-imf-aid-for-europe/

O dear, looks like this is going to get very interesting especially if the US takes the view of it's Senate!

However it appears giving the money to banksta's is clearly OK.

Not good news for the UK if we need IMF help.

Oh dear.

Looks like somebody else will have to create the Euro bail-out money out of thin air.

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Good ideas don't always catch on straight away

Well markets seem to have caught onto the idea that this is not a good thing with a bit of a lag.

The Dow is now down 80 rather than up 80.

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I am really amazed that markets have ignored this completely to-day.

I expected it to be bigger news than it appears to have been so far.

+1

Isn't this a bit like the banks not loaning to each other at the beginning of stage 1 of the GFC, only now, there is no one left to lend to anyone. Seriously, this is the scarriest news I have heard in ages. Aren't all the Wall Street boys using the Euro fund now to sell their dodgy debts to? I suspect that in a week or two's time the plug will be pulled and Greece will be dumped from the Euro. The big players will have sorted all their positions out and it will be the pension funds etc that get totally shafted.

I was in Whitechapel today, a 5 minute walk from the square mile. There are a lot of poor people in Whitechapel...it's not far from the city. Once the cuts start biting, benefits stop getting paid etc, I see things turning very nasty in london.

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The EUR is now trading at 1.2210. Sterling is at 1.4333. The Yen is at 92.37. Ouch.

The FX market is giving us much more dire signals than the equity markets with the Dow only down about 115.

My main barometer is Euro Yen. At 112.78, it is flashing major warning signals. Look out below.

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+1

Isn't this a bit like the banks not loaning to each other at the beginning of stage 1 of the GFC, only now, there is no one left to lend to anyone. Seriously, this is the scarriest news I have heard in ages. Aren't all the Wall Street boys using the Euro fund now to sell their dodgy debts to? I suspect that in a week or two's time the plug will be pulled and Greece will be dumped from the Euro. The big players will have sorted all their positions out and it will be the pension funds etc that get totally shafted.

I was in Whitechapel today, a 5 minute walk from the square mile. There are a lot of poor people in Whitechapel...it's not far from the city. Once the cuts start biting, benefits stop getting paid etc, I see things turning very nasty in london.

There has been a quote from someone who went broke in the 1930s doing the rounds on this site recently. When asked how he went bankrupt, he replied by saying slowly at first and then very quickly.

The societal unrest following the realisation that we are broke will probably follow a similar pattern : slowly at first and then really quickly.

We have been trained to buy dips in the last 30 years because of market behaviour. I suspect that we are entering into a new regime where this behaviour will destroy wealth and expose people like Warren B who will prove to have been a bit smarter than others but to have only been at the right place at the right time rather than truly gifted.

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Interestingly the French don't seem to mention the Americans but do point out the Germans have decided not to cough up either.

http://www.lefigaro.fr/conjoncture/2010/05/18/04016-20100518ARTFIG00626-sauvetage-de-l-euro-berlin-reserve-son-aide.php

It seems the suggestion is aid will be assessed on a country by country basis and will require a "yes" vote from the Bundestag itself each time.

kewl.

Edited by indirectapproach

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