The Globalists Move Ahead to Steal our Wealth and Sovereignty

By Timothy R. Homan

July 1 (Bloomberg) — The International Monetary Fund’s board of directors plans to approve authorization to issue as much as $150 billion of bonds for the first time as it seeks new sources of funds, an IMF official said.

The board is scheduled to vote on the matter today, the official said on condition of anonymity. The bonds are part of a wider effort to seek new funding as the lender helps countries from Iceland to Pakistan combat the global financial crisis.

The securities, the culmination of months of talks between the fund and its members, will offer the largest emerging-market nations a new way of making IMF contributions while they seek greater say at the fund. China, Brazil and Russia have favored the bonds instead of regular contributions as they wrangle with other members over redistributing the IMF’s voting power.

“The emerging market economies want to call the shots a little bit more,” saidSimon Johnson, a former chief economist at the IMF who is now a senior fellow at the Peterson Institute for International Economics in Washington. “It’s all part of a longer evolution of the IMF.”

Leaders from the Group of 20 industrial and emerging nations agreed in April to boost IMF coffers by $750 billion to help the Washington-based agency shore up nations roiled by the credit crunch. The U.S. last month agreed to boost its contribution for the IMF by more than $100 billion.

Rates, Currency

Today’s vote likely will address details such as how to set the interest rates for the bonds and their currency.

Chinese officials have sought a greater role over time for the IMF’s unit of account, called Special Drawing Rights or SDRs, in an effort to reduce the U.S. dollar’s dominance in the global economy.

China’s government has also said it will buy $50 billion in notes. Russia and Brazil in June month announced plans to each buy $20 billion of bonds from the IMF.

India has indicated it would contribute to an IMF bond program. Montek Singh Ahluwalia, deputy chairman of the nation’s Planning Commission, wasn’t available to comment today.

IMF Managing Director Dominique Strauss-Kahn said last month there will be a “little” secondary market for the bonds. Strauss-Kahn said June 13 in Lecce, Italy, that they could be traded between “bondholders, either government or central banks.”

The IMF is also considering making them tradable between all central banks from countries that are IMF members, said a G- 8 official, who spoke on condition of anonymity. It would stop short of allowing them to trade on the open market, he said.

Budget Deficit

Treasury yields climbed this year and the dollar fell in part on concern that foreign central banks would reduce holdings of U.S. financial assets just as the Obama administration sells a record amount of debt to finance a growing budget deficit and pull the economy from the deepest recession since the 1930s.

China’s central bank last month renewed its call for a new global currency and said the IMF should manage more of members’ foreign-exchange reserves, triggering a decline in the U.S. dollar. IMF First Deputy Managing Director John Lipsky said on June 6 it’s possible some day to take the “revolutionary” step of making SDRs a reserve currency.

SDRs were created by the IMF in 1969 to support the Bretton Woods exchange-rate system that collapsed in 1971. They act as a unit of account rather than a currency. The cash is disbursed in proportion to the money each member nation pays into the fund.

To contact the reporter on this story: Timothy R. Homan in Washington atthoman1@bloomberg.net

 

http://www.bloombergnews.com/apps/news?pid=20601087&sid=a1OjABXlOBS4#

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