Originally Published in the March-April 2000 Issue of UN Watch!
Ever since Shakespeare, people have been cautioned against the "Ides of March." However, March 10 brought a very strong stock market with the Nasdaq crossing over 5000 and the Dow trying to find itself. Within a month to six weeks, all of that would change. However, April 14, 15, 16, and 17 was a particularly interesting time and one which this newsletter will examine. On April 14, both stock exchanges finished down substantially. The Nasdaq dropped 355 points while the Dow dropped 618 points. After one month, what began as a ten percent correction, according to the Wizards on Wall Street, ended up in a 1700 point correction, reducing the value of the Nasdaq by 30%, equal to the 1800 point drop which occurred in the Dow in August 1998. At the same time the market was dropping, the IMF/World Bank was meeting for their spring session, the Group of Seven central bank and finance ministers were meeting to discuss the state of the world economy, and protestors from around the United States gathered in Washington, D. C. to demand debt reduction for the highly indebted poor countries. Lastly, hanging over the IMF/World Bank meeting was the House sponsored report examining the practices and results of 56 years of IMF/ World Bank activities. Are all of these activities separate or is there another message which is being sent to Congress?
THE BRETTON WOODS INSTITUTIONS
One year before the United Nations Charter was signed, over seven hundred delegates from forty-four countries met to construct a world monetary system which would be used to govern the world after the war. Sponsored by the United Nations, the Monetary and Financial Conference, now known as "Bretton Woods" (because of where it met in New Hampshire) had two objectives: (1) "to reduce obstacles of international trade," and (2) "to bring about the harmonization of national policies of member states." Most people would not question the word "harmonization" but in light of all that has taken place on the international level to bring us into world government, we need to understand that it means what it says--the bringing together of all the countries of the world into one.
Two key players at that historic conference were John Maynard Keynes, the British socialist who boasted that what was set up in Bretton Woods was "the exact opposite of the gold standard," and Harry Dexter White, who was Assistant Secretary of the Treasury. White was later named by Whittaker Chambers and Helen Bentley as a covert agent for the Soviets. All of this should serve as a key indicator as to the real intent and nature of these organizations.
Harry Dexter White drew up the plans for the International Bank for Reconstruction and Development (IBRD), now known as the World Bank and soon to be renamed the "World Development Agency". Its stated purpose was to help Europe and other war- torn countries rebuild after the war. In 1947, the World Bank turned to "developmental" loans to help countries rebuild economically.
Since then they have added privatization. The indebtedness of a country only lends to its vulnerability. Unfortunately the combination of developmental loans which have turned into "white elephants", privatization, and the debt as a result of the developmental loan have all contributed to the very precarious position of the "highly indebted poor countries" known as "HIPCs."
Sadly enough, it appears that the Bretton Woods Institutions are socialistically designed to transfer wealth from the countries of the world to chosen pockets. Although it appears that the IMF/World Bank are comprised of all the countries of the world, each having one vote on global matters, there also appears to be a more sinister side to their power. The recently completed House report on these institutions over the last 56 years reveals that the countries which followed the IMF/World Bank advice are now deeply in debt. Unfortunately, the House report calls for additional stringent measures which will only increase the current burdens of these countries, leading to the eventual transfer their natural resources to the IMF and World Bank.
The Reason for Indebtedness-- Developing the World
As a result of their goal to "develop" the world, the World Bank went into a country to do a "financial plan." After consulting with the country's leaders, they would counsel them to build rubber plants, dams, or hydro-electric power plants in order to enhance the income of the country, enabling them to pay the debt off and have a profit. Many third world countries followed the Bank's advice because they thought they were the best in the world.
Interestingly enough, ten to fifteen years ago one of the contracting companies offering advice and bidding on contracts was the former consulting company of the bank's current president, James A. Wolfensohn. Before he became president, he sold his firm to an investment house for a very fine profit. To put Wolfensohn's company in the proper framework, I should mention that former Federal Reserve Chairman, Paul Volcker was Chairman of the Board! Should I point out that Wolfensohn is "double dipping"? First as a contractor, and now as an employee, complete with retirement benefits!
However, the story of the third world countries making money does not end well. As Bruce Rich wrote in Mortgaging the Earth, it has instead, led to great indebtedness. Although Mr. Rich discusses the problems which many countries are now straddled with, we will examine Thailand.
At the prodding of the World Bank, Thailand agreed to allow the World Bank help them build hydro-electric power plants to create electricity to sell to other countries. As part of their plan, the World Bank insisted that Thailand create "EGAT" which is an "autonomous, independent power agency" which became a condition for future loans (helpful for skimming off the top). In order to build the ten hydro electro power plants, thousands of farmers who farmed near the water ways and oceans were displaced and sent to resettlement camps with the promise that they would be given other land to farm. To this day, these people have not been paid nor have they been given new land to farm, they remain in over-crowded resettlement camps. The result? The displacement of thousands of farmers who could eke out a living and the indebtedness of a country which is being robbed it of its ability to provide for its citizens.
When Rich wrote his book in 1994, Thailand had 26 large irrigation and hydroelectric dams which had been built with the support of the World Bank and "other international donors" not named. Only one of these hydroelectric dams has achieved or exceeded its projected power benefits during the past decade. Two others [were] operating at 66.47% and 48.61% respectively." (Rich, 12) Thailand had 101 World Bank loans totaling $4.374B with no income from these projects to support its debt. While Thailand is not a HIPC at this time, they did experience part of the Asian crisis. They are for sure, a very poor country.
Highly Indebted Poor Countries
The countries described as highly indebted poor countries obtained this label in 1996 as a result of their deep indebtedness. That year the IMF and the World Bank launched the HIPC Initiative which was endorsed by some 180 governments as an effective approach to help poor, severely indebted countries reduce debt as part of an overall poverty reduction strategy (WB News Release No. 2000/203/S). In 1999, the program was expanded to provide deeper, broader, and faster debt relief to some three dozen countries. It should be noted that with every "new" initiative comes another layer of bureaucracy accompanied by two layers of rules and regulations which the HIPCs have to meet, thus digging the hole so ever deeply that at some point, the country will not be able to surface. HIPC "debt relief" (if you can call it that) is only given to countries who follow a prescribed World Bank formula which will "reinvent the country" into the image which the World Bank has defined to meet their definition of "democracy." To make sure, the new and future mission of the Bank will be to provide "technical and scientific knowledge" to help countries create legal systems which support the Bank's definition of property rights and fair judicial processes.
Highly indebted poor countries include: Africa (32 countries) - Angola, Benin, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo, Democratic Republic of Congo, Cote d'Ivoire, Ethiopia, Ghana, Guinea, Guinea-Bissau, Kenya, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Sierra Leone, Sao Tome and Principe, Senegal, Somalia, Sudan, Tanzania, Togo, Uganda, and Zambia; Latin America (4 countries) - Bolivia, Guyana, Honduras, Nicaragua, People's Democratic Republic of Lao, Myanmar (Burma) and Vietnam; and one in the Middle East - the Republic of Yemen.
The World Bank qualifies what a highly indebted country is by the amount of its debt times exports. For example, Mozambique is $400-500 billion in debt which constitutes 600% of its export revenues. The goal is to forgive debt down to 150% of export revenues which means $4.3 billion will be forgiven to bring their debt down to a level which is considered "sustainable". In order to qualify for this program, Mozambique will have to install numerous IMF macro-economic policies with regard to inflation, growth and poverty reduction (jump through hoops), then they will have to increase social expenditures for health, clean water and education. This fits in well with the new global public goods objectives of the World Bank which will also include the World Bank helping with the creation of legal systems and other rules of corporate governance (All of this means the country is being reinvented in the image of the World Bank and is no longer sovereign.).
In a press briefing with James Wolfensohn at the April meetings, he stated that there are 40 HIPC countries with a total debt of $200 billion. The total developing country debt is $2 trillion. The debt of the 28 countries in the HIPC Initiative totals $60 billion (out of the $200 billion). In explaining debt forgiveness, Wolfensohn said:
"I remember meeting with a group of religious leaders who came to me and said, why doesn't the Bank forgive all it debt? And I said I'd be very happy to do that if you'll forgive me the repayment on the bonds which you owe the Bank. That created a slight stir because we borrow $120 billion. So in the end everybody has to pay if you have total debt forgiveness, including bond holders. So it's not an easy question. What we have tried to do in HIPC is to modulate it. But in the end, it's going to get back to individuals and countries such as this, and the Congress in the United State case to decide on how much it would support."Privatization
Meanwhile, in another area of the Bank, the International Finance Corporation uses the very sophisticated technique of "privatization" to shift the wealth of a country from state ownership to private hands. Interestingly enough, most third world countries don't have that many people who can afford to buy a formerly state owned asset banks, railroads, power plants, electrical generators, farms, etc. When you read the World Bank documents which discuss these "transfers," it appears that many of them are "front corporations" as the names of the real buyers are not revealed.
Like the World Bank, to assist with privatization, IFC provides technical assistance and advisory services. They also provide help with privatizing state-owned enterprises through supporting small and medium-sized enterprise by using project facilities, venture capital funds, credit lines and leasing companies; developing capital markets; drafting securities markets laws and regulations; shaping the regulatory environment for new types of financial institutions; establishing supervisory and enforcement entities and mechanisms for securities markets, and creating or developing stock exchanges. In fact, IFC has been most successful in developing stock exchanges for third world countries. When you create a stock exchange, you then need the stock of private companies to list (privatization). IFC guides in all aspects and they even buy 25% of every stock offering (formerly state owned assets of the country) to help them out with their new stock exchange!!!
Control of Natural Resources
Another aspect which should be considered with regard to World Bank projects is the fact that many of the highly indebted countries are rich in natural resources. The World Gold Council has identified 30 of the 40 HIPC countries, as being gold producers. In sub-Saharan Africa, which includes 33 of the 40 HIPCs, currently produces 25.1% of the world's gold. In 1999, there were a number of central banks which announced they were going to sell up to half of their gold reserves which caused the price of gold to drop to a 30 year low. Let's take a look at how Ghana was affected.
Ghana is the second largest gold producer in South Africa. Their debt is 95% of Gross National Product. The gold they mine accounts for 97% of their debt. In other words, if you destroy Ghana's right to mine gold, they will not be able to pay their debts and will have to sell their gold mines to create liquidity in order to stay alive a little while longer. When I was at the fall meeting of the IMF/World Bank meetings in 1999, I asked the Finance Minister of Ghana who is also a director of the state owned gold mine, Ashanti Goldfields, if they were going to have to close as a result of the low price in gold. He assured me that they had purchased put options (price of gold goes down) on the commodity exchange and that they were in wonderful shape. A day later, the price of gold went up $50 an ounce causing Ashanti Goldfields to incur a $240 million margin call on the puts. They ended up having to find a buyer for half of Ashanti Goldfields which the state owns as the other half is owned by the world's largest mining company in Britain. What I am trying to show is that the countries which are most highly indebted have natural resources which are at stake and their last hope of survival. Little by little, Ghana is having to sell its last asset to stay alive a little longer.
With this introduction to the activities and results of the World Bank and International Monetary Fund, let us take a look at the Congressional Report by the "International Financial Institution Advisory Commission" called "The Meltzer Report," after its chairman.
THE INTERNATIONAL FINANCIAL INSTITUTION ADVISORY COMMISSION REPORT
The Meltzer Commission and Report
This Commission was empowered and given its mandate by the Omnibus Budget Bill which provided the IMF with $18B in 1998. This report provides a review of the Bretton Woods institutions-- the International Monetary Fund-IMF, the World Bank-WB, and the World Trade Organization-WTOby our Congress after more than 50 years of U.S. support. They wanted to know if these institutions living up to their mandates. The Commission also reviewed and affirmed the role of the Bank for International Settlements which they said was "to remain a financial standard setter (Report, p. 14).
Originally it was the intent of the Omnibus Budget Bill to ask five former Secretary's of the Treasury to serve. That however, was not the case. The eleven man commission was chaired by Dr. Allan Meltzer who is Professor of Political Economy at Carnegie Mellon University and a Visiting Scholar at the American Enterprise Institute. He was joined by C. Fred Bergsten, Director of the Institute for International Economics, Charles W. Calomiris, Professor in the Department of International and Public Affairs at Columbia University's School of International and Public Affairs, Congressman Tom Campbell who serves on the House Banking and International Relations Committee; Edwin J. Feulner, president of the Heritage Foundation and a trustee of Regis University; W. Lee Hoskins, past Chairman and CEO of Huntington National Bank and past President and CEO of the Federal Reserve Bank of Cleveland; Richard L. Huber former Chairman, President and Chief Executive Officer of Aetna, Inc.; Manuel H. Johnson, co-chairman and senior partner in the consulting firm of Smick Medley International and past Vice Chairman of the Board of Governors of the Federal Reserve; Jerome I. Levinson, a Fulbright Scholar and Distinguished Lawyer in Residence at the Washington College of Law; Jeffrey D. Sachs, Director of the Center for International Development, and Former Congressman Esteban Torres.
In this regard, they accepted the testimony written and verbal of various individuals from non-governmental organizations, think tanks, colleges/universities, the AFL-CIO, the GAO, banks, and law firms which included the Carnegie Endowment for World Peace, Columbia University, Friends of the Earth, World Relief, the Heritage Foundation, and Chase Bank, to name a few. As well, both James Wolfensohn, president of the World Bank and C. Stanley Fischer, then acting director of the International Monetary Fund provided testimony.
Their report basically concludes that the IMF and the World Bank need to be "reinvented" (my interpretation). They agree that both these institutions should write-off in entirety all claims against heavily indebted poor countries that implement an effective economic and social development strategy [JV: new chains to reinforce the old]. In a press briefing with James Wolfensohn, he stated that the Bank has $200B loans on its book. The Highly Indebted Poor Countries (HIPC) owe $50- $60B. It is the goal of the World Bank to forgive/write-off $50B of this amount.
The Commission found that the IMF and World Bank overlap in their tasks and that their focus is not clear and defined, nor is their effectiveness apparent. The World Bank admits, by way of in-house evaluation of project performance, to a 65% to 70% failure rate in the poorest countries while upper income countries only have a failure rate of 30-40% (Report, p.80).
With regard to specific changes for the IMF/World Bank, it is safe to say that the HIPCs will pay for the brunt of the changes as they will be forced to put up the collateral of the country in order to secure any future debt on world markets. What follows is a summary of the recommended changes for the IMF and WB.
THE INTERNATIONAL MONETARY FUND
In 1998, the International Monetary Fund was provided with $18B from Congress to be used as "seed" money to raise a total of $100B which would be used to set up a new line of credit for
the IMF to use for countries in trouble and in need of a short- term loan. This, we were told, was as a result of the Asian crisis. It was the Group of Seven presidents and prime ministers who requested this new stand-by short-term line of credit.
It was the original intent of the founders of the IMF/World Bank, to make the IMF a place where countries could borrow to repair damages suffered in World War II. We are told, however, that the IMF, as a result of the oil shocks of the 1970s, took on a long term role to help countries affected by the higher costs of energy and to help the country with their balance of payments. To date, the IMF is involved in structural adjustment programs in some 70 countries (28). Currently four countries have borrowed from the IMF for over 40 years, 20 have borrowed for more than 30 years, and 46 countries have borrowed from the IMF for more than 20 years (Report, p. 28).
Countries such as Nicaragua and Russia have received new IMF loans just in time to help make payments on their old IMF loans. In addition, as a result of various country financial crises, the following countries are indebted to the IMF: Mexico: $20 billion; Asia: $100 billion; and Russia $20 billion.
"The Commission recommends that the IMF be restructured as a smaller institution with three unique responsibilities to increase global stability, improve the functioning of markets, and help countries improve domestic and monetary fiscal policies. The IMF:
1. "Act as a quasi-lender of last resort to solvent emerging economies by providing short-term liquidity assistance to countries in need under a mechanism designed to avoid the abuse of liquidity assistance to sponsor bailouts and which would attract capital from commercial sources. [JV: This changes the nature and the power of the IMF. It would make them stronger as an institution since they would say yeah or neigh to a country who is in desperate need of money.]
2. Collect and publicize financial and economic data from member countries and disseminate data in a timely and uniform manner [JV: they call this "transparency"].
3. Provide advice relating to economic policy as part of regular 'Article IV' consultations with member countries (Report, p. 43)." [JV: They basically have been doing this and "transferring growth from the United States to other countries.]
In this regard, the IMF's long term lending will end. By making the IMF a "quasi lender of last resort," countries requesting monies under the short-term credit facility would have to be pre- approved and meet strict rules. Below are their requirements, followed by my analysis.
1. "Corruption would have to be limited.
2. Eligible countries must permit freedom of entry and operation for foreign financial institutions in a phased manner over a period of years.
3. Bank regulation should incorporate the Basel Committee Core Principles (Bank for International Settlements) reforms to enforce prudent capital standards.
4. Countries which borrow must publish regularly the maturity structure of its outstanding sovereign and guaranteed debts and off-balance-sheet liabilities in a timely manner (Report, p.45)."
Analysis of Requirements
The above comprises very stringent requirements for countries as they will no longer have freedom to determine their own financial destiny but will have to conform to rules and regulations which the IMF/World Bank have determined on their behalf. With regard to corruption, that goal is very ambiguous. In many instances it is a case of the robber calling the kettle black. How will you or any organization, for example, limit corruption in Russia, China, Bolivia, Argentina, or most of the other countries of the world? With regard to countries permitting foreign financial institutions freedom of entry, it dilutes a country's economic sovereignty. With regard to Number Three, the Bank for International Settlements Basle Committee has issued banking "Core Principles" which are very rigid. Most banks, with the exception of huge multinational/transnational banks do not have the ability to meet the stringent requirements of bank capital. As a result, many smaller banks world wide will end up being absorbed by larger banks. With regard to Number Four which is the publishing of financial information, while I can understand what its intent is, the bottom line is that no country has privacy any longer.
Terms for Lending
Terms for lending are very onerous. The Commission wrote,
"If a new crisis occurs before the new rules are in place, countries should be permitted to borrow at AN INTEREST RATE ABOVE THE PENALTY RATE. This rate would be used as an 'additional incentive' to adopt the new rules (Report, p. 46)".In addition, the terms will also include provisions to ensure PRIORITY OF IMF CLAIMS on collateral. The IMF is going to use commodity exports as collateral! In addition, there was discussion by the Group of Seven and the IMF a year or so ago to change the type of clauses in bonds to adopt the British form of "sovereign bonds." What are "sovereign bonds"? They basically attach specific assets to the bond. In the past, when a country could not meet payments, the IMF re-wrote the loan and added more money each time a country needed money. The bottom line is that the HIPC countries will now end up pledging the rest of their natural resources--their last few diamonds, ounces of gold, forests, mountains, fish, cattle, crops to borrow a few more dollars to try and stave off the inevitable since the IMF is no longer going to be their "Snoopy blanket:" Instead, it will now become their judge! (Report, 47).
Because of all of the debt of the HIPC, there are proposals for BANKRUPTCY COURTS, collection action clauses, and other contractual changes, and other attempts to share losses between private and public lenders and institutions. In order to meet this challenge, most countries, including the United States, are restructuring their bankruptcy laws to conform to the ideas being enforced on the global level. The U.S. law is proposing that the IRA be made part of the assets which can be seized.
THE WORLD BANK
The Commission's Findings
The World Bank and its three regional banks employ 17,000 people in 170 offices around the world. They have obtained $400B in capital from national treasuries, hold a loan portfolio of $300 billion and each year, extend a total of $50 billion in loans to developing members. Adjusted for inflation, the World Bank has doubled in size in 30 years. Please see The United Nations' Global Straitjacket for further information. As previously mentioned, the self- reviews of bank performance reveal an astonishing 50-60% failure rate to achieve sustainable results (55-68).
One of the missions of the Bank has been to lend to countries to help them develop so that they can work their way out of poverty. However, when the Commission reviewed the Bank's 4,100 operations approved over the last seven years it revealed that almost 80% of resources went to countries with an international bond rating of B or better instead of lending to countries which needed the financial help. This is seen in the share of non-rated recipients in the World Bank's IBRD lending fell from 40% in 1993 to less than 1% in 1999 (60).
Furthermore, eleven most favored countries commanded 70% of the total non-aid resources while the other 145 developing World Bank member countries were left to divide the remain 30%. Those receiving the 70% are: China 12%, Argentina 10%, Russia 9%, Mexico 7%, Indonesia 7%, Brazil 7%, Korea 6%, India 4%, Thailand 3%, Turkey 3%, and the Philippines 2%. [This is can be considered an outright transfer of wealth and assistance to communist, socialist and Marxist countries.]
As a result of the Commissions findings and the lopsidedness in lending, they recommended:
1. "The Development Banks should be renamed Development Agencies.
2. All resource transfers to countries which enjoy capital market access (investment grade of BBB or better) or per capita income in excess of $4,000 would be phased out over the next five years while those countries with a per capita income of $2,500, would have official assistance limited.
3. The World Development Agency should concentrate on the production of "global public goods" and serve as a centralized resource for the regional agencies. Global public goods include:
Treatment for tropical diseases and AIDS
Rational safeguarding of environmental resources
Inter-country infrastructure systems
Development of tropical agricultural technology
Creation of best managerial and regulatory practices (Report, p.94)."
The Knowledge BankAgency
Interestingly enough, a number of years ago when James Wolfensohn became president of the World Bank he stated that he wanted the Bank to become "The Knowledge Bank." What we have here is a recommendation that the new World Development Agency handle technical and scientific knowledge to fit in with the goals of global public goods mentioned above. There are some who have knowledge and are able to be human, not gloating it over others and then there are those who have knowledge who use it to force their will because "they know more and know better".
Taking this seemingly harmless change one step further, the Commission also recommends that the World Bank "should provide technical assistance on the creation of legal systems that support clearly defined property rights and fair judicial processes, transparent accounting, tax and public administration regimes, policies that promote the free flow of goods and long- term capital; and sound financial system regulation and corporate governance rules" (Report, pp.94-95). While we could write another newsletter just on this paragraph, let us mention "corporate governance rules" pertains to public-private partnerships which is the marriage between government and business. The real term for this marriage is fascism!
Lastly, the Commission specifically recommends that "the United States should be prepared to increase significantly its budgetary support for the poorest countries if they pursue effective programs of economic development. This support should come in several forms: debt reduction, grants channeled through the multilateral development agencies, and bilateral grant aid. The current level of U.S. budgetary support for the poorest countries is about $6 per U.S. citizen ($1.5 billion total), so there is scope for a significant increase in funding" (Report, p. 13).
What is again very apparent is that the masters of the universe are trying to bring order out of planned and managed chaos. A year ago when I interviewed Mr. Eric Musch who was the Director of the Basel Committee on Banking Supervision for over fifteen years at the Bank for International Settlements, when I asked him how the Asian crisis could have occurred, he told me that they "forgot that you need" certain things in place before you could do other things. When I asked how such a brilliant organization like the Bank for International Settlements could make such a major mistake when they have so many intelligent people working there, he had no answer. (Later on when he saw me, he accused me of being "so controlling"!!)
In the case of the International Monetary Fund and the World Bank which have been operating for over 50 years to make such a mess of the world, we are now being told that more controls are needed. I beg to disagree. Based on the above, the real agenda becomes more clearer and apparent:
1. While the utopian dream of the World Bank is a "world without poverty," it appears they have exacerbated poverty instead of reducing it. In doing so, they have positioned third world countries exactly where they want them for control purposes control of the country, its resources, and its people.
2. As a result of the Meltzer Report, it appears that the poor countries, and specifically the highly indebted poor countries of the world are now, after years of having their loans turned over, are going to be set free to go out into the world to obtain financing. Obviously if individuals who have poor credit are only able to go to loan sharks, the kind of interest rate which these countries will have to pay will probably be much higher, thus increasing their burden.
3. The rules and regulations of the Meltzer Report make it very clear that there is another layer of rules and requirements which are being levied upon the poor countries of the world. The creation of a World Bankruptcy Court is only the tip of the iceberg.
4. In order to qualify for debt relief, countries are having to fulfill special requirements in order to be admitted to the HIPC program. As mentioned, these additional "hoops" will "recreate" the country in the image of the IMF/World Bank. Should we mention that this is quite similar to "Pavlov's Dogs"?
5. Using very sophisticated techniques such as developmental loans, privatization, special programs, and the institution of corporate governance, the countries of the world are being raped, robbed and pillaged of their natural resources, freedoms, laws and rights.
6. The bottom line: the party is over. The countries which cannot make the switch will lose the remainder of their natural assets in the meantime, since they have privatized all of their state assets, there will be nothing left to attach--except the people which are considered "human capital." Have we reverted back to slavery? Is this global democracy in the 21st Century?
7. Up until now, we have not addressed the protestors outside of the IMF/World Bank. I wrote extensively about the protestors in the November-December 1999 issue of UN Watch!. Unfortunately in both Seattle and in Washington, D. C., I was locked out of the conference as my Constitutional rights were transferred to the protestors. I had an interesting dialogue with some of them who informed me the Constitution had no value and that they were the law. I informed them they were creating a situation of tyranny.
Again, every consideration was given to them. Bill Clinton commended them, they were listened to, provided with extensive news coverage, and had police patient to protect them. If they had been pro-lifers, they would have been arrested for just raising their voices. My question now is the same as when I was in Seattle, "Who is paying for their activities?" Most of the major NGO's are supported by the multinational and transnational foundations. Lastly, many of these protestors looked like and acted like twice baked regurgitated 60's flower children all over again. The only difference is the 60's children knew the difference between socialism and capitalism. These kids had no clue they are only able to eat, breathe, and reiterate whatever they have been told. It is very sad to see the brain wasted.
8. Up until now, we have not addressed the role of the stock market. In September 1998 I wrote an extensive economic newsletter with regard to the Dow dropping a total of 1800 points over a ten week period by August 30. What I could not fathom then was all of the choreography which accompanied the stock market. Alan Greenspan, key economists from around the world, and political leaders all commented on how frail the system was, how we were in a bear market, problems with liquidity, and a number of other ominous comments. Interestingly enough, they are saying the same thing today!
Their message came through loud and clear--the IMF needed $18B for a new short-term line of credit. In doing some research, I went through a number of Bill Clinton, Robert Rubin, and Alan Greenspan's speeches over a fifteen month period prior to August and discovered that whenever they spoke, they always referred to the $18B needed for the IMF. The problem was that Congress did not want to appropriate those monies. I did not connect the stock market with the $18B for the IMF until the Congress appropriated the monies in the October 15 Omnibus Spending Bill. In response the Fed reduced interest rates by 1/4 of 1% in a surprise move, prompting the market to rise 330 points. The last week of October saw the stock market erase the previous three months market volatility by closing up 15% from the low. By the end of October, it was as if "nothing had happened" in the stock market.
I can't help but see the same situation all over again with regard to the bailout monies for the highly indebted poor countries. In the May 12 issue of The Washington Post, there was an editorial entitled, "Debt Relief Delayed" in which they lament the fact that the "six richest countries apart from the United States have now pledged more than $1 billion toward [debt relief] but [like the $18B] they will pay only if the United States does, too. Unfortunately, the mood in Congress makes participation seem doubtful. On Tuesday the Senate Appropriates Committee set aside only $75 million of the $435 million necessary for the United States to should its share of the burden." Note: Our fair share is 43.5% of the total needed we are only a 19.9% shareholder of the World Bank.
This is August 1998 all over again!!! Do not be fooled. There is a connection between the IMF meeting, the G7 finance ministers, the protestors, and the stock market. We the people are being blackmailed in the most sophisticated way! However, just as the drop in the stock market is a transfer of wealth from those who did not sell to those who sold high, so too, is the appropriation of $435 million for debt relief.
9. All of the above comprises a recipe for tyranny. We have not seen the last of the protestors for I believe they have a dual role their next protest appearance, apart from the Republican and Democratic Conventions will be in New York at the United Nations in September where a "People's Millennium Forum" is being planned this is a nice way of saying that "a People's Parliament" is being added to the United Nations so the people of the world can have a say in world policies.
It should be noted that the term "Parliament" is not "Congress" and therefore represents a totally different form of government and two, if the "people of the world" now have a say at the United Nations, what does that make our Congress? Paper pushers?
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The IMF held 93.8 million ounces (2,917.1 metric tons) of gold at designated depositories at end July 2010. The IMF’s total gold holdings are valued on its balance sheet at SDR 3.9 billion (about $5.9 billion) on the basis of historical cost. As of July 31, 2010, the IMF's holdings amounted to $109.6 billion at current market prices. [Source: IMF]
International Monetary Fund
February 11, 2010
At the G-20 Summit on April 2, world leaders pledged to support growth in emerging market and developing countries by boosting the IMF's lending resources to $750 billion. They committed to:
- increase the resources available to the IMF by $250 billion through immediate contributions from some IMF member countries. The G-20 agreed that these bilateral contributions will subsequently be incorporated into an existing credit line the IMF maintains with some of its members, known as the New Arrangements to Borrow, or NAB. The G-20's intention is to increase the resources available through a more flexible NAB by up to $500 billion.
- use additional resources from agreed sales of IMF gold to provide $6 billion in additional financing for poor countries, in a manner consistent with the IMF's new income model, over the next 2 to 3 years.
In addition, the G-20 supported a general allocation of the IMF's Special Drawing Rights equivalent to $250 billion to boost global liquidity. The G-20 also urged urgent ratification of the Fourth Amendment to the IMF's Charter, first proposed in 1997, which seeks to make the allocation of SDRs more equitable.
Below follows a list of commonly asked questions about the proposed increase in the NAB, the new SDR allocation, and gold sales. While certain aspects of the implementation of the G-20 agreements have become clear, the IMF is still discussing other aspects, so some of the details are not yet available.Who Owns Most of the World's Gold?
Factsheet: Gold in the IMF
Is U.S. Really Opposed to Selling IMF Gold, and, if so, What's the Real Reason?
Reforming the IMF for the 21st Century
Asking the Right Questions About the IMF