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View Full Version : IMF in trouble (while Chavez smiles)



Die Neue Zeit
13th April 2008, 18:35
http://ap.google.com/article/ALeqM5gAx3Nd5KM-hvCBdyVUCF6tns9b8AD8VTA6D82 (http://ap.google.com/article/ALeqM5gAx3Nd5KM-hvCBdyVUCF6tns9b8AD8VTA6D82
)

This is five days late, but nobody posted it here:


IMF Managing Director Dominique Strauss-Kahn welcomed the board's decision Monday to propose a new framework for the fund, designed to close a projected $400 million budget deficit over the next few years.

It is "a landmark agreement that will put the institution on a solid financial footing and modernize the IMF's structure and operations," he said in a statement.

The budget proposal includes sharp spending cuts of $100 million over the next three years that will include up to 100 staff dismissals.

"We have made difficult but necessary choices to close the projected income shortfall and put the fund's finances on a sustainable basis, but in the end it will make the fund more focused, efficient and cost-effective in serving our members," said Strauss-Kahn, a former French finance minister.

The IMF said the board agreed to revamp the fund's income model from one that primarily relies on lending to one that generates money from various sources.

During the 1990s, the IMF lent billions to countries in Asia and Latin America that were facing financial crises and financed its operations on interest from those loans. In recent years, IMF lending has dried up as many of those countries have built up reserves to prevent them from having to borrow again from the IMF, which often puts severe restrictions and conditions on its loans. The declining interest payments led to the IMF's budget gap.



http://www.iht.com/articles/ap/2008/04/12/business/LA-FIN-Venezuela-US-Finance-Meetings.php


Venezuelan President Hugo Chavez said Saturday that his government could afford to buy some of the International Monetary Fund's gold reserves as the Washington-based lender faces hard times.

Chavez raised that idea with a chuckle as the IMF, the lender of last resort for countries in trouble, considers trimming costs by selling off some of its gold reserves.

"Look at how the U.S. empire must be in unimpeded decline, that the International Monetary Fund ... is selling its crown jewels," Chavez said during a speech at a military parade.

"The International Monetary Fund is selling what gold it has left to be able to pay salaries," Chavez said. "We could give a loan to the Monetary Fund. ... We could buy some gold bars. ... I think they're selling gold cheap."

Schrödinger's Cat
13th April 2008, 19:19
Heh, times are a'changing.

AGITprop
13th April 2008, 19:27
Chavez is a beast.
I love him. :)

Seriously, though, wow. It's really a crisis. Remember when Bear-Sterns was bought out by the Federal Reserve...well one of the Reserves head economists openly stated that if that bank went down, the entire world-economy would ave collapsed. This is the point it has reached.

spartan
13th April 2008, 19:44
Haha the boots on the other foot now.

How times are changing for the better.

Zurdito
13th April 2008, 22:35
I am sorry but Chavez shouldn't be smiling, this global economic crisis will hardly leave Venezuela untouched. The IMF short-fall is jsut one symptom of it. There will be a mass global destruction of capital, including Venezuelan capital. He will either have to confiscate it therefore, or protect Venezuelan capitalists right to lay off workers and push up inflation.