The Daily Bell
October 6, 2010
- A d v e r t i s e m e n t
- {openx:49}
Germany Opposed To Unconditional IMF Safety Nets … Germany is opposed to the setting up of ‘global financial safety nets’ under the aegis of the International Monetary Fund, a Deutsche Bundesbank official said Tuesday. The official told journalists that the mechanisms proposed by the G-20 group of nations, would create moral hazard by obliging countries to provide unlimited liquidity without conditions in times of financial stress. The comments come as the German delegation prepares to fly to Washington DC for the autumn meetings of the IMF and World Bank … The IMF’s willingness to provide loans under the PCL to countries which, in its own words, “may not meet the FCL’s high qualification limits” appears to have raised hackles at the Bundesbank, which has consistently opposed any dilution of the IMF’s principles of only lending against strict commitments to sustainable fiscal and monetary policy. The initiative to expand such “safety nets” is part of the G-20’s efforts to make the international financial system more stable. It has been promoted by South Korea and has received some limited support from France and U.K. – WSJournal.com
Dominant Social Theme: The world needs a central bank and the IMF is ready to be one.
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Free-Market Analysis: As we have written plenty of times before, it’s startling to see how fast the Anglo-American power elite is willing to move now toward a more specific and comprehensive global governance. When we read this article, even just the beginning, it was obvious to us what was going on. And then we came to this sentence: “It means a de facto obligation to provide unlimited liquidity in euros…but the IMF is not a central bank for the world.” Exactly. Is there a sub dominant social theme in the article. Perhaps so: “Pushback will continue but the IMF’s expanded role is inevitable.
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