Gov't Stupidity: The IMF Is Now Begging China, Russia, And India For $500 Billion To Bail Out Europe

[Anti This Anti That]

Gov't Stupidity: The IMF Is Now Begging China, Russia, And India For $500 Billion To Bail Out Europe

Wednesday, January 18, 2012 6:57

From Bloomberg:

The International Monetary Fund is proposing to raise its lending capacity by $500 billion to insulate the global economy against any worsening of Europe's debt crisis, according to a person familiar with the talks.

The Washington-based lender currently has about $385 billion available to lend and wants to lift that to $885 billion after identifying the potential for a $1 trillion global financing gap in the next two years, the person said. To incorporate a cash buffer, that means asking its membership for $600 billion.

IMF Managing Director Christine Lagarde said yesterday her staff are studying options to increase the fund's war-chest. While euro-region nations have already pledged to contribute 150 billion euros ($192 billion), the U.S. has said it has no plans to make new bilateral loans and G-20 leaders ended last year at odds over the issue.

"The biggest challenge is to respond to the crisis in an adequate manner and many executive directors stressed the necessity and urgency of collective efforts to contain the debt crisis in the euro area and protect economies around the world," Lagarde said yesterday in an e-mailed statement following a discussion among her institution's board of directors.

The Washington-based lender is pushing China, Brazil, Russia, India, Japan, and oil-exporting nations to be the top contributors, according to a Group of 20 official, who spoke on condition of anonymity because the talks are private. The fund wants the agreement struck at the February 25-26 meeting of G-20 finance ministers and central bankers in Mexico City, the official said.

Euro Gains

The push for more money by the IMF may extend this month's rally in investor sentiment toward European debt markets on speculation the region is enjoying a respite from its two-year debt turmoil and that any euro-area recession may be shallow.

The euro today rose 0.5% to $1.2797 as of 12:32 p.m. in London.

In a sign the crisis may have longer to run, the World Bank yesterday cut its global growth forecast by the most in three years to 2.5% this year and said the euro area may contract 0.3%. Euro-area countries also need to repay 157 billion euros of maturing debt this quarter, according to UBS AG calculations.

Mexico Talks

Lagarde's proposal is set to be discussed by G-20 deputy finance officials, scheduled to meet this week in Mexico. At a November summit in the French resort of Cannes, G-20 leaders balked at writing fresh checks for the IMF, demanding that Europe's governments do more to fix their crisis while saying they would ensure the IMF "continues to have resources to play its systemic role."

A U.S. official reiterated that stance last month, saying President Barack Obama's administration won't stump up more cash for the IMF and that a solution to the turmoil must be led by Europe.

Russia's government won't decide on any contribution before March presidential elections, First Deputy Prime Minister Igor Shuvalov said in an interview in Moscow today.

Greater support for the IMF also attracted controversy within Europe. Germany's Bundesbank coupled its 41.5 billion-euro input to a promise that the aid not be earmarked for Europe. Such recycling would violate euro rules that bar central banks from financing government deficits. As a result, the euro area will lend to the IMF's general resources, not to a special crisis fund.

Options for raising the IMF's resources include opening a trust fund or not rolling back a 2009 increase. Officials have also discussed increasing the amount of the fund's Special Drawing Rights.

Emerging markets may try to twin the call for help with a push to increase their clout at the IMF. Such nations, which are growing twice as fast as their developed counterparts, say that their voting power doesn't reflect their weight in the global economy and they want to end the tradition of selecting a European to head the institution.

http://members.beforeitsnews.com/story/1642/156/NL/

[sxsess]

Anti, this is all the product of liberalism/socialism. As long as these morons are in power, its just going to get worse. The US cant afford to give anymore money away. Our debt is about to eclipse the GDP in this country! And we have a president that is constantly spending money by giving it to unions and anti-american cronies. Worst of all, he's getting away with it.

[Sparta]

The Washington-based lender is pushing China, Brazil, Russia, India, Japan, and oil-exporting nations to be the top contributors, according to a Group of 20 official, who spoke on condition of anonymity because the talks are private. The fund wants the agreement struck at the February 25-26 meeting of G-20 finance ministers and central bankers in Mexico City, the official said.

Easy solution: RV the oil-exporting nations' currencies. Plenty of money to go around! What the hell, some DV people might even contribute some !!