Posted By The Editor On January 30, 2009 @ 4:03 pm In Mike Robinson
The IMF is out of cash.
That is, according to the governor of Mexico’s Central Bank, Guillermo Ortiz, at this years otherwise absolutely insane Davos economic forum, who said [1], “The IMF does not have enough money for what is coming.”
Turns out, he was right. The Wall Street Urinal reported this morning [2]:
“The International Monetary Fund is finalizing a $100 billion loan from Japan and is considering issuing bonds for the first time in its history, as part of an effort to double the financial resources it has to fight the deepening global recession.”
The IMF has a lending capacity of about $250 billion, and wants to double that. In the past the UK and the USA have vetoed the IMF issuing bonds to raise money. I doubt such a veto will come from the UK this time, since we are so bankrupt we may just need IMF cash in the not too distant future.
The $250 billion figure seems strangely low to me, considering it is usually the IMF that countries run to when they can’t pay their debts.
But it raises an interesting question – if the IMF extends loans to nation states using money it has borrowed from banks, and nation states are using those loans to bail out banks, where is the interest on the loans going?
This could just be the biggest scam in history – banks use the fractional reserve system [3] to issue loans, creating money out of thin air. This previously non-existent money is lent to nation states to fund their bailout packages, where the cash is forwarded back to the banks again to support their balance sheets. In return the banks give the countries involved some worthless “assets.” The tax payer is now liable to the banks for the interest on loans which the banks effectively lent themselves.
Amazing.
Those involved, from Gordon Brown, through every politician who keeps his mouth shut, to every journalist who doesn’t write about it, should be ending their days in prison.
Public Inquiry! Now.
Article printed from The UK Column: http://www.ukcolumn.org
URL to article: http://www.ukcolumn.org/2009/01/30/hustle/
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[2] reported this morning: http://online.wsj.com/article/SB123324916724529207.html
[3] fractional reserve system: http://www.lewrockwell.com/rothbard/frb.html
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