Obama proposes US loan $100 Billion to International Monetary Fund

Raw Story

Tuesday, April 21, 2009

U.S. President Barack Obama Monday asked Congress to back an expansion of an IMF emergency fund by $500 billion in a move designed to expand its reach to big emerging-market nations.

Obama also asked lawmakers to approve a U.S. contribution to the fund to $100 billion, as part of the plan to swell International Monetary Fund reserves agreed at this month’s Group of 20 industrial and developing nations summit in London.

At the G20 summit, “the Germans did not want an EU effort to bail out the banks,” reported the Asia Times. “They wanted the International Monetary Fund (IMF) to bail out a substantial part of the EU financial system instead. The reason was simple: The IMF receives loans from the United States, as well as China and Japan, meaning the Europeans would be joined by others in underwriting the bailout. The United States has signaled it would be willing to contribute $100 billion to the IMF, of which a substantial portion would go to Central Europe. (Of the current loans given by the IMF, roughly 80% have gone to the struggling economies in Central Europe.)”

The president made the request in several letters to Democratic and Republican congressional leaders Monday, pointing out that the fund didn’t require an extra financial outlay from the U.S.

When Washington transfers funds to the IMF under the program, known as an expansion of the New Arrangements to Borrow, or NAB, it would receive interest bearing assets in return, backed up by IMF resources including gold stocks.

“Our proposal to increase U.S. participation in the NAB by up to $100 billion as part of an overall increase of $500 billion was warmly endorsed by the G20 Leaders,” the letters said.

“I am asking for your help to deliver on that commitment by supporting inclusion of the NAB and related IMF proposals in the most timely legislative vehicle that will enable the United States to act quickly,” Obama wrote.

“Rapid progress is essential to the restoration of confidence in the global economy and financial system so that the global economy can emerge from recession to recovery and to sustained growth.

The IMF was the main beneficiary at the Group of 20 London summit where leaders agreed to triple its war chest to $750 billion by adding $500 billion, some of it already pledged.

“Mexico became the first to win approval for the new credit line Friday, gaining access to a record 47 billion dollars,” reported the Economic Times.

“The IMF’s 47-billion-dollar credit line to Mexico was the largest financial arrangement in the 64-year-old institution’s history.”

“Other potential candidates for an IMF credit line are Brazil, Chile, South Korea, the Czech Republic and Singapore,” the Times continued.

“In a letter to U.S. congressional leaders, Obama said the U.S. funding ‘does not represent a budgetary expenditure or any increase in the deficit since it effectively represents an exchange of assets,’” reported Reuters.

Obama made the request in letters to two Democrats: House of Representatives Speaker Nancy Pelosi and Senate Majority Leader Harry Reid; and Republican House Leader John Boehner and Senate Minority Leader Mitch McConnell.

QUOTE FROM ZEITGEIST ADDENDUM ON THE IMF

This process of manipulation by the corporatacracy through the use of debt, bribery and, political overthrow is called “Globalization”. Just as the federal reserve keeps the American public in a position of indentured servitude through Perpetual Debt, Inflation and Interest, the World Bank and IMF serve this role on a global scale.
The basic scam is simple. Put a country in debt either by its own indiscretion or through corrupting the leader of that country, then , impose conditionalities, or Structural Adjustment Policies…often consisting of the following:
1- Currency Devaluation. When the value of a currency drops, so does everything valued in it. This makes indigenous resources available to predator countries, at a fraction of their worth.
2- Large funding cuts for Social Programs, These usually include education and health care. …compromising the well-being and integrity of the society, leaving the public vulnerable to exploitation.
3 -Privatization of state-owned enterprises… This means that socially important systems, can be purchased and regulated by foreign corporations, for profit. For example, in 1999, the world bank insisted that the Bolivian Government sell the public water system of it third largest city to a subsidy of the US corporation, Bechtel. As soon as this occurred, water bills for the already impoverish local residents skyrocketed. It wasn’t until after a full blown revolt by the people that the Bechtel contract was nullified.
4 Then there is trade liberalization.. or the opening up of the economy through removing any restrictions on foreign trade. This allows for a number of
abusive economic manifestations… such as transnational corporations bringing in their own mass produced products, undercutting the indigenous production and ruining local economies…an example is Jamaica, which, after accepting loans and conditionalities from the world bank, lost its largest cash crop markets due to competition with western imports. Today, countless farmers are out of work, for they are unable to compete with the large corporations.

Another variation is the creation of numerous, seemingly unnoticed, unregulated, inhumane sweatshop factories, which take advantage of the imposed economic hardship. Additionally, due to production deregulation, environmental destruction is perpetual, as a country’s resources are often exploited by the indifferent corporations, while outputting large amounts of deliberate pollution.

PERKINS:
The largest environmental lawsuit in the history of the world today is being brought on behalf of 30,000 Ecuadorian Amazonian people, against Texaco, which is now owned by Chevron, so its against Chevron but for activities conducted by Texaco….they estimate it to be more than eighteen times what the Exxon Valdese dumped into the coast of Alaska…in the case of Ecuador it wasn`t an accident…the oil companies did it intentionally, they knew they were doing it to save money out there rather than arranging for a proper disposal.

Furthermore, A cursory glance at the performance record of the World Bank reveals that the institution, which publicly claims to help poor countries develop and alleviate poverty, has done nothing but increase poverty and the wealth gap, while corporate profits soar. In 1960 the income gap between the 5th of the world’s people in the richest countries, versus the 5th in the poorest countries was 30:1. By 1998, it was 74:1.While global GNP rose 40% between 1970 and 1985, those in poverty actually increased by 17% While from 1985 to 2000, those living on less than 1 dollar a day increased by 18%.
Even the Joint Economic Committee of the US Congress admitted that there is a mere 40% success rate of all World Bank projects.

In the late 1960s, The world Bank intervened in Ecuador with large loans. During the next 30 yrs, poverty grew from 50% to 70%…under or unemployment grew from 15% to 70%… public debt increased from 240 million to 16 billion….while the share of resources allocated to the poor went from 20% to 6%.
In fact, By the year 2000, 50% of Ecuador’s national budget had to be allocated for paying its debts.

IS THIS SOMETHING WE WANT TO GET INTO?

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