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Posts Tagged ‘International Monetary Fund’

Will John McCain Finish George W. Bush’s Job In Implementing The Financial New World Order?

Posted by Job on October 20, 2008

A financial new world order?
Bush says reforms must improve, not fetter, the free market; Europeans hint at more robust intervention.

When President Bush hosts a world financial summit in the coming weeks, one of the least multilateral American presidents in decades will set in motion what could result in a full reordering of the global financial system.

The series of summits that Mr. Bush announced over the weekend at Camp David with European leaders at his side suggests a broad understanding among them: that the current crisis requires the kind of global regulatory reforms that have eluded major powers in the past.

Europeans especially are speaking of a “Bretton Woods II” that could do for financial markets what the 1944 summit at a resort in New Hampshire did for monetary policy.

But the call for a summit also underscores the degree to which a once go-it-alone presidency has shifted to embrace not only the necessity of international cooperation, but also a role of global leadership.

“Talk of a Bretton Woods II has been around to different degrees for 30 years. But the fact it is getting started with an outgoing administration and especially one that was at the center of a significant crisis between America and Europe, between America and the rest of the world, suggests the recognition that there is urgency in the air,” says Simon Serfaty, an expert in US-Europe relations at the Center for Strategic and International Studies (CSIS) in Washington. “It also adds legitimacy to the coming process.”

That process, which is expected to stretch into next year and a new American administration, will get under way with a summit that Bush will host sometime after Nov. 4, the date of US elections, according to a statement issued Saturday by Bush, French President Nicolas Sarkozy, and European Union Commission President José Manuel Barroso.

The initial summit is expected to be a kind of expanded Group of Eight meeting, assembling the leaders of the most industrialized nations and those of major developing economies like China, India, Brazil, and South Korea. (Please know that inviting developing nations is a major step to a truly global system, as the following step would be to invite the third world nations.) It would aim to assess the current global crisis and to come up with a set of principles of reform.

Actual agreements on reforms could come at subsequent summits, but the initial meeting would allow Bush to place his stamp on the process before leaving office, while also facilitating a continuity of American leadership.

Saturday’s meeting offered a picture of transatlantic unity, but that hardly means the road ahead will be discord-free. Bush says future reforms and new international regulations must improve but not fetter the free market, while European leaders hint at much more robust state intervention with tighter regulations. (Bush has to keep this pretense in order to retain conservative support, especially among evangelicals, for policies that they would never accept from an overt liberal like, say, Clinton or OBAMA. A reason why McCain would be useful. Then again, Obama would be useful in bringing America in line with Europe and getting the nonwhite, er, developing nations to go along too.)

Bush recognized the need for “regulatory institutional changes” but added, “It is essential that we preserve the foundations of democratic capitalism – commitment to free markets, free enterprise, and free trade.” (Speaking with a forked tongue. In an essentially global economy, there will be no more statutory or regulatory barriers between markets, enterprise, and trade between America and Brazil than there are between Alabama and Texas. Ironically, the very ENLIGHTENMENT principles that our oh so wise freemason and deist founding fathers came up with to govern interstate commerce within this own nation, which lest we forget was originally intended as a federalist contract between loosely affiliated largely independent and sovereign states … please recall that “state” actually refers to an individual sovereign political entity and subdivisions between a state are actually called “provinces” or similar … will work quite nicely for global commerce among member nation states – and city – states like THE VATICAN. Please recall that Rome before it became an empire was a city state. For the record, John Calvin’s Geneva, which is credited with inventing modern capitalism, was a city state as well. So despite the endtimes theories of many conservative evangelicals, the economic new world order need not be socialist or communist. It can be capitalist, or merely a union between capitalist and socialist economies just as our own nation has long been a union of more laissez faire economic states and states with heavy government subsidies, wealth distribution, and regulation.)

In response, President Sarkozy said, “The president of the United States is right in saying that protectionism and closing one’s borders is a catastrophe…. But we cannot continue along the same lines,” he added, “because the same problems will trigger the same disasters.”

Mr. Barroso was more succinct: “We need a new global financial order.”

Those words could send shivers through a White House that is suspicious of the current chorus of world leaders – European, Russian, and others less friendly to the US – who are hailing the current economic crisis as a moment to usher in a multipolar world. Bush indicated he seeks to maintain some degree of American stewardship over the financial reform effort when he politely declined the offer of United Nations Secretary-General Ban Ki Moon to host the expanded G-8 summit at the UN in New York. (Again, can’t tip off the religious right. Please keep in mind that neither McCain or Obama will be beholden to the opinions of this group in any way.)

Among the issues the White House has indicated it would endorse for a reform agenda are rules for the international flow of investment funds, improved oversight of increasingly global financial institutions, and means of boosting the transparency of international financial transactions and markets. 

But European leaders have called for what sound like much deeper reforms. British Prime Minister Gordon Brown, for example, has proposed a reorganization of the International Monetary Fund – a Bretton Woods institution.

Behind the European proposals is a sense that the financial crisis and America’s darkening economic prospects make this an opportunity for the European Union to play a bigger international role. Last week at the close of a two-day EU summit on the financial crisis, Sarkozy predicted that an international summit would take place before the end of the year because “Europe wants it, Europe demands it. Europe will get it.”

More than a show of unity with a declaration for a series of summits will be needed if the world is truly to come together to address the crisis, some observers note. “Unity of purpose is not found in a meeting or series of meetings. It’s found in purpose,” says Danielle Pletka, vice president for foreign-policy studies at the American Enterprise Institute in Washington. (Ah, the Rick Warren Purpose Driven Life language. How convenient. And how disconcerting that a generation of evangelicals is being brainwashed with the New Age doctrines of the new world order globalist Council on Foreign Relations member and pastor to the world’s biggest pornographer Rupert Murdoch in Rick Warren. Also, the “unity” thing is just recreating the tower of Babel so that the second Nimrod, the man of sin or the anti – Christ, can come on the scene.) “Whether that’s something the major players in this crisis can come together on remains to be seen.”

But Mr. Serfaty points out that the Europeans chose to engage the Bush administration, when just a few years ago the deep divisions over the Iraq war were disrupting such cooperation. (A key component to spotting people who are sold out to and working for Satan is their ability to manipulate you into thinking that you are in control when they are secretly calling the shots all along, as that is precisely how Satan works. By the way, who is the better manipulator in this race … McCain or Obama? I give it to Obama, but only by a nose.)

“Rather than seeing any kind of disconnect,” he says, “I think we should emphasize the fact the Europeans are doing what [the Americans] want them to do, in that they are coming together and taking a proactive approach to this crisis.”

So you see, no matter who gets elected, the anti – Christ globalist system is going to be implemented. Do not put your trust in Obama, McCain, or any other thing or person of this world! Instead, put your trust in Jesus Christ!

Follow the three step salvation plan today!

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Global financial crisis: does the world need a new banking ‘policeman’?

Posted by Job on October 8, 2008

Global financial crisis: does the world need a new banking ‘policeman’?

By Gordon Rayner, Chief Reporter Last Updated: 1:36AM BST 08 Oct 2008

With war raging across the globe in July 1944, ministers from all 44 Allied nations met at the imposing Mount Washington Hotel in Bretton Woods, New Hampshire, to thrash out a set of rules that would govern world finance once Hitler was defeated.

Knowing that greater international trade would help to prevent future wars, and determined to avoid another Great Depression, the delegates signed the Bretton Woods Agreements, creating the International Monetary Fund and the World Bank. It was a big vision, driven by grand historical figures: Winston Churchill, Franklin D Roosevelt and the British economist John Maynard Keynes.

But a system that was designed 64 years ago has, not surprisingly, proved ill equipped to deal with the fiendishly complex practices of 21st-century banking that led to the current worldwide crisis.

Neither the IMF, the World Bank nor any other institution has the power to police the global financial system in a way that might have prevented the excessive risk-taking which led to the sub-prime mortgage crisis and, in turn, the credit crunch.

A more recent creation, the G8 group of industrialised nations, looks hopelessly out of date without the emerging economic giants of Brazil, India and China among its ranks. And the “beggar-thy-neighbour” policies of guaranteeing savings that have sprung up in Germany, Greece and Ireland in recent days have shown that even in Europe, co-ordinated economic policy is a myth.

“The current system is in crisis and we have an environment where dog eats dog,” said Bob McKee, of the economic consultancy Independent Strategy. “Electorates will expect more regulation, and politicians will push for it.”

The new Business Secretary, Peter Mandelson, argued last week that new global solutions are needed because “the machinery of global economic governance barely exists”, adding: “It is time for a Bretton Woods for this century.”

Gordon Brown argued as long ago as January 2007 that global regulation was “urgently in need of modernisation and reform”.

So, as the world’s central bankers gather this week in Washington DC for an IMF-World Bank conference to discuss the crisis, the big question they face is whether it is time to establish a global economic “policeman” to ensure the crash of 2008 can never be repeated.

Top of the to-do list for any new or reformed body would be new rules to manage the level of risk that banks and financial institutions are allowed to take on.

Major economies already have regulatory bodies designed to keep financial institutions in check, such as the Financial Services Authority (FSA) in the UK and the Securities and Exchange Commission (SEC) in the US. But even if these bodies had done their job properly, opinions differ wildly between different countries over what constitutes an acceptable risk.

Take, for example, the Basle II Accord, a voluntary international agreement which might have seemed a crushing bore when it was published in 2004, but which just might have prevented the credit crunch if the world’s major economies had realised it was actually a good idea.

In essence, Basle II, concocted by the Basle Committee on Banking Supervision, set up by 10 leading economic nations, was designed to make sure banks did not overstretch themselves by lending too much money in relation to the amount of capital they held.

If it had been implemented the moment it was written, Basle II might have prevented the collapse of Northern Rock – which had lent seven times the amount of money it held on deposit – and saved the likes of Lehman Brothers in America. Instead, motivated by national self-interest, not to mention greed, the world’s major economies dithered, so that few, if any, had implemented the agreement by the start of 2008, with 95 countries only able to promise they would adhere to it by 2015.

We can only speculate whether a global policeman would have intervened in another seismic shift in economic policy: the abolition by the US president, Bill Clinton, in 1999 of the Glass-Steagall Act, which had, since 1933, separated retail banks from investment banks.

The Act had been passed during the Great Depression to prevent banks from speculating with depositors’ money, and its repeal by Mr Clinton has been blamed by some commentators for contributing to the current financial crisis, which would have been limited to investment banks if Glass-Steagall had remained in place.

Too late, then, to remedy the missed opportunity of Basle II or to reinstate Glass-Steagall. But a new global regulatory arrangement might come just in time to address another issue troubling the world’s financial watchdogs: mark-to-market accounting, about which we are likely to be hearing a great deal in coming weeks.

Mark to market is a system in which banks must declare the value of assets such as securities on a daily basis, forcing them to be transparent about their balance sheets. The assets must be valued in line with what they would fetch on the open market that day, and if their value has dropped, the banks must raise capital to make up the shortfall, even if they have no intention of selling the assets for another five or 10 years.

Many banks have argued that this is unfair, as those same assets will recover their value in the long term, and marking them down has, they claim, contributed to the current crisis of confidence.

Simon Ward, an economist at New Star Asset Management, said: “This kind of accounting is causing investors to see ghosts in banks’ balance sheets which just don’t exist. If we had suspended mark-to-market accounting a year ago, the current crisis may have been avoided.”

Why has this become such a hot topic in recent days? Because banks in America have exerted such pressure on the SEC that rules on mark-to-market accounting may soon be relaxed, giving American companies an advantage over those in the UK, where the FSA has no intention of following suit.

As chaos reigns in the financial markets, the issue of regulatory reform is never far from the headlines. So what might a new architecture of global economic regulation look like?

In essence, any organisation with the power to police the global economy would have to include representatives of every major country – a United Nations of economic regulation. Robert Zoellick, president of the World Bank, identified the weakness of the current system this week when he said international organisations that excluded countries such as China, India, Brazil, Saudi Arabia, South Africa and Russia were outdated.

Gerard Lyons, a member of the International Council of the Bretton Woods Committee, a steering group for the IMF and World Bank, said: “We need to look at the current crisis and decide what banks have been doing well and what went wrong.

‘The point we’re at now is like the scene in Apollo 13 when one of the mission controllers says they’re facing the worst disaster in Nasa’s history, and his boss points out that it will turn out to be Nasa’s finest hour if they get it right.

“We have an opportunity now to make changes in global banking that make sure we keep all the good bits and eradicate the bad. For example, there is nothing wrong with young people borrowing money against their expected future income if they have genuinely good prospects, but we need to prevent the sort of irresponsible lending to people with poor credit ratings that led to the sub-prime mortgage crisis.

“What we mustn’t do is throw the baby out with the bathwater. The global banking system has helped increase living standards at a faster rate than at any point in history, and we are about to see the emergence of two-thirds of the world’s population into the developed world.”

Danny Gabay, a former Bank of England economist who now works for Fathom Consulting, suggested the answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS), the umbrella organisation for the committee that came up with the sensible Basle II Accord.

“The BIS has been spot on throughout this,” he said. “The problem is that it has no teeth. The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.”

The failures of modern global capitalism have been brutally exposed in recent months. Opinion is now hardening around the case for a new global architecture to enforce rules that ensure lessons are learnt and that the actions which have brought free markets to the brink of collapse are never repeated.

It remains to be seen whether the political leaders of 2008 are up to the task. If they are, the first foundations of that new world could be laid in Washington this week.

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Losses from credit crunch could top 945 BILLION DOLLARS Say International Monetary Fund

Posted by Job on April 8, 2008

Please note comments below which state that this same problem is happening globally.

CORRECT: Losses from credit crunch could top $945 bln: IMF – MarketWatch

WASHINGTON (MarketWatch) — The total potential losses globally from the credit crunch could top $945 billion, the International Monetary Fund estimated on Tuesday. Losses tied to the housing market could top $565 billion, with the remainders coming from credit cards, commercial real estate and corporations, the IMF said. The current market turmoil reflects weak balance sheets and a general lack of capital. As a result, the effects are likely to be “broader, deeper, and more protracted.” The U.S. remains “the epicenter” of the crisis, but financial institutions in other countries have been impacted. Some emerging markets remain vulnerable, although so far most have been resilient, the IMF said, in a new report on global financial stability. (Corrected to show losses will be borne globally, not just in U.S.)

Posted in big business, capitalism, economic collapse, endtimes, eschatology | Tagged: , | 1 Comment »

 
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