Tuesday, April 14, 2009

Raising the bar on spin.

Poland asks for $20.5 billion credit line from IMF

Dominique Strauss-Kahn, the IMF's managing director, welcomed Poland's announcement. "I am very pleased by this positive response from Poland to the invitation I extended to strongly performing economies to use this new instrument to bolster international confidence," he said in a statement.

Posted by devo @ 03:53 PM (1341 views)
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10 thoughts on “Raising the bar on spin.

  • The IMF simply acts on behalf of western banks that made predatory loans to eastern Europe. The IMF loans enable the countries to keep current on the payback of the loans. Similar to the US govt bailout of AIG to enable it to pay Gold-in-Sacks on the insurance policies the former sold to the latter.

    The countries needed the loans in the first place because of (a) theft by their oligarchies (b) the loans were to create real estate bubbles (mortgages denominated in foreign, stronger currencies) rather than to develop industrial potential and (c) the loans are part of the planned shrinkage of these economies – the conditions of IMF loans include wage cuts/ unemployment, lower living standards, cuts in social services including education, leading to emigration. The shrinkage of home demand supposedly enables the countries to earn foreign currencies from their exports. The real estate bubbles also enabled them for a while to meet part of the cost of their dependence on foreign creditors and suppliers. The other way is to enable them to pay back the loans by getting them to sell public assets at firesale prices.

    Note that the biggest debtor of them all doesn’t have to go to the IMF for loans. Instead of cutbacks and austerity the US gets Keynesian reflation.

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  • Alaninstockport says:

    Mandelson said that we wouldn’t be at the top of the list for going to the IMF for a bailout… well that’s Mexico and Poland ahead of us so far, wonder if we’re going to be the next “strongly performing economy” to go cap in hand?

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  • little professor says:

    Well said icarus. The IMF is simply a method of enslaving generations of population to paying of debt, mortgaging, privatizing and selling off the countries assets in order to pay the robber lenders. This (long) Market Oracle article goes into great detail about this process.

    http://marketoracle.co.uk/Article9986.html

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  • general congreve says:

    Yep, well said Icarus.

    The IMF bailout of Eastern Europe has helped save over-exposed Western European Banks, especially the Austrian banks who are owed the equivalent of 100% of Austrian GDP by Eastern European Debtor nations, from forthcoming massive default on these debts. Not only would default have been catasphrophic for those heavily exposed Western European banks, but it would no doubt blow the world financial markets apart due to the trillions of over-leveraged derivative insurance liabilities that would be exposed from further bank collapses.

    It is a cheaper fix to throw billions at these debtor nations to avoid them defaulting on their debts, than try to plug a trillions-wide hole in the global financial markets caused by an implosion in the derivatives bubble, one that would surely sink the insolvent western banking oligarchy and US world dominance to boot.

    However, you cannot solve debt with more debt. How much longer before the debtor nations are back with the begging bowl? Fire sales of their assets to the west to pay their debts may be one way out for them, but will the people of these nations really stand for their countries being sold out? I think not. Instead be prepared for a much more civil unrest in debtor nations, the overthrow of governments that try to sell out, refusal to service debt by new ‘popular’ administrations and the nationalisation of assets to protect wealth from the clutches of the corrupt western usurers.

    This whole mess will take a little longer to unravel, but I believe the end is in sight for many western governments and their banking oligarchies. They are doing everything in their power to ‘save the world’ (save themselves), but it can’t continue forever, common sense can tell anyone that, just look at the trillions of fictional paper money be thrown around like confetti. It defies logic.

    The more effort (trillions) that is made by the west to stop debt/fiat monster they have created, the bigger the bang is going to be when it all comes tumbling down. And the bigger the upside for those adequately prepared.

    Gordon or Gold?

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  • Thanks LP. Great article. General C – Good points. I think the author of the article LP flagged up would argue that the debts will never be paid but if debtor nations can keep repayments current the system survives.

    US indebtedness to OPEC, China, Japan etc. funds not only the purchases of Chinese goods in Wal Mart but also the US military, which is there to quell ‘rogue states’ and rogue social movements of the type general c describes. How that plays out is anybody’s guess, but the oligarchies in those creditor countries no doubt see the US military power as a kind of guarantee of their own position in their respective political heirarchies. Quid pro quo.

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  • general congreve says:

    @4 ‘ I think the author of the article LP flagged up would argue that the debts will never be paid but if debtor nations can keep repayments current the system survives.’

    And that is the problem. The debt is no longer servicable. Default on this debt will bring the western banking ponzi scheme down and western governments are trying to avoid this at any cost. Hence the IMF bailout.

    It’s very true that the west are in debt to the East way over their heads. There has been a massive transfer of wealth from west to east in recent times, but the west is desperately trying to keep it’s place at the head of the global table with its financial manouverings.

    Every world player knows the truth, but they are going along with the West’s ruse because of vested interests. China are in a symbiotic relationship with the US, as they are sitting on 2 trillion dollars worth of US Bonds (IOU’s). They could flood the market with US bonds and hit the US hard, but they’d be doing themselves a colossal dis-service financially. So they are playing the game, slowly trying to convert their bond liabilities into hard cash before they lose too much value. Once they are free of the threat of massive wealth loss through continued dollar devaluation (as a result of the US trying to print their way out of debt – a losing game), the game will probably be up for the US.

    As for China et al backing the US as someone who can protect their interests, I have to disagree. I believe they see them as far more of a threat than a guardian. The US may be bankrupt and heading for the ropes economically, but they have unparalled military might. Even China dares not upset the US too much and is treading very carefully. They do not want to get on the wrong side of the US. I for one could easily see the despair caused by the forthcoming US collapse being politically engineered to start a big war to restore US global fortunes.

    I wouldn’t put it past the american public to throw all their toys out of the pram and back a new war, against those framed as responsible by the politicans, when faced with total economic devastation. After all, they gave full backing to their politicians to invade two countries in return for losing a couple of skyscrapers, so who knows what could happen with the US in economic ruins but still possessing the most powerful military machine that has ever existed?

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  • general congreve says:

    @4. Sorry Icarus, just realised I misread your comment about the US being a guarantor to oligarchies in debtor nations. Fully agree with you on that.

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  • General Congreve says:

    @6 Meant to say creditor nations. I’m really not on the ball today!

    Gordon or Gold?

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  • general congreve says:

    @6 Meant to say creditor nations. I’m really not on the ball today!

    Gordon or Gold?

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  • Did anyone else catch crash Gordon at question time this week? Conservative question: will the prime minister apologize for selling half the country’s gold at the bottom of the Market? Answer: all the banks were doing it!!! And we bought euros with the proceeds. Basically Crash is admitting to being a follower and not a leader and of being proud his government has mis-managed the economy to such an extent to allow sterling to drop almost 30% against the euro in 12 months, and now claiming it was all a fantastic bit of strategic planning. The man is an egotistical moron.

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