IMF the De Facto Global Central Bank Printing Fiat Money

that's the SDR (Special Drawing Right).

THE IMF CATAPULTS FROM SHUNNED AGENCY TO GLOBAL CENTRAL BANK (Ellen Brown, 10/1/09 Web ot Debt)

“A year ago,” said law professor Ross Buckley on Australia’s ABC News last week, “nobody wanted to know the International Monetary Fund. Now it’s the organiser for the international stimulus package which has been sold as a stimulus package for poor countries.”

"The IMF may have catapulted to a more exalted status than that. According to Jim Rickards, director of market intelligence for scientific consulting firm Omnis, the unannounced purpose of last week’s G20 Summit in Pittsburgh was that “the IMF is being anointed as the global central bank.” In a CNBC interview on September 25, Rickards said, “They’ve issued debt for the first time in history. They’re issuing SDRs. The last SDRs came out around 1980 or ’81, $30 billion. Now they’re issuing $300 billion. When I say issuing, it’s printing money; there’s nothing behind these SDRs.”

IMF is doing WHAT? Issuing the SDRs backed by... nothing?

So I looked and found the following article from no other than IMF itself. And I learned that the SDRs are not only backed by nothing (it's nothing more than a "concept"), but IMF is giving them away for free.

IMF Injecting $283 Billion in SDRs into Global Economy, Boosting Reserves (Glenn Gottselig, 8/28/09 IMF Survey Online)

"With much of the world still mired in recession, the IMF took action to bolster its members’ reserves through an allocation of SDRs, or Special Drawing Rights.

"The allocation, equivalent to $250 billion, was made on August 28 and will be followed by an additional, albeit much smaller, allocation of $33 billion on September 9. With the two allocations totaling roughly $283 billion, the outstanding stock of SDRs would increase nearly ten-fold to total about $316 billion.

"There are no notes or coins denominated in SDRs, nonetheless the SDR does play a role as an interest-bearing international reserve asset. The allocation of SDRs by the IMF boosts member countries’ reserves because SDRs can be turned into usable currencies. Once the SDRs have been added to a member country’s official reserves, the country can voluntarily exchange its SDRs for hard currencies, such as the U.S. dollar, euro, yen, or pound sterling, through voluntary trading arrangements with other IMF member countries."

What is the SDR? IMF explains as follows:

"The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members."

In other words, it's a form of debt, which allows the holder to lay a claim on the "freely usable currencies of IMF members". Much like the U.S. Treasury debt, which is backed by nothing but the government's promise to give the holder a claim on the future money that the U.S. government will collect from hapless taxpayers. The value of the SDR is currently determined by a basket of four currencies, Euro, British Pound, Japanese Yen, and U.S. Dollar, and the SDR pays interest at 0.25%.

Now these $316 billion newly minted claims on four IMF member currencies have been already distributed throughout the world. It is another wealth transfer, as "$110 billion of the combined allocations will go to emerging market and developing countries, including over $20 billion to low-income countries." (IMF)

Out of nothing, the IMF member countries (just about every country in the world) have been given free claims to four leading currencies that are freely exchanged in the world market. (Here's the table that shows the SDR allocations.)

How could this not be highly inflationary?

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IMF Wants to Collect from Banks

If you've been deriding those who mentions NWO (New World Order; Mr. Kissinger's remark after 2:00 mark) as "conspiracy nuts", it's staring right in your face if you care to recognize. The so-called conspiracy is not done in some dark, smoke-filled back room. It's in your face.

IMF, an institution no developing country wanted to deal with any more before the financial crisis and the global recession triggered by it, is back to wheeling and dealing. The crisis has been God-sent for their raison d'être; it clearly revitalized the institution, with funds pouring in from China, Japan, and Russia, dispensing money and austerity programs again to countries who suddenly found themselves facing insolvency.

Feeling confident that it is finally becoming what it was designed back in 1944 in Bretton Woods, IMF has started to talk like the global central bank.

IMF presses for tax on banks' risky behaviour (10/2/09 Guardian UK)

"The International Monetary Fund today threw its weight behind a new tax on the global financial sector designed to limit risky speculative behaviour and help the world's poorest countries.

"Dominique Strauss-Kahn, the IMF's managing director, said banks and other big financial institutions were responsible for systemic risk and it was only right that they provided resources to mitigate those threats to the world economy."

With due respect (meaning I don't have much respect), I disagree with Strauss-Kahn's assessment that banks and financial institutions were responsible for systemic risk. The ones who were truly responsible were the central banks, and one in particular, the U.S. Federal Reserve, and politicians who need central banks to print money for their grandiose government policies and projects. Mr. Strauss-Kahn was the Finance and Economy Minister under Lionel Jospin's cabinet from 1997 to 1999, and has been the Managing Director of IMF since November 2007.

And who will define what the "risky behavior" is? IMF bureaucrats under the direction of member countries' politicians?

And why should IMF direct banks to help the world's poorest countries? Whatever tax is assessed on banks' activities, it will ultimately be paid by the taxpayers of mostly developed countries where those "risky" banks reside. It will be paid either through increased fees for bank transactions, or through outright bailout.

That will be on top of the extra burdens that the taxpayers are straddled with in the form of "stimulus" programs, new taxes, and bank bailouts.

The finance minister of Brazil, host to 2016 Olympics, expressed support for IMF as 'central bank':

Brazil would support "central bank" role for IMF (10/2/09 Reuters)

"ISTANBUL, Oct 2 (Reuters) - Brazil would support the International Monetary Fund acting as a kind of global central bank, offering liquidity and currency swaps, Brazilian Finance Minister Guido Mantega said on Friday.

"Such a role for the IMF would be part of increasing coordination in global policy and efforts to fix economic imbalances between countries, Mantega told reporters at the semiannual meeting of the IMF in Istanbul."

What the hell is "economic imbalances between countries"? That some countries are richer than the other? Is that something bad?

Toward the end of the article,

"The idea of the IMF effectively becoming a global central bank is one of many ideas for radical reform informally discussed by officials and academics around the world over the past year."

Sorry. That idea may seem "radical", but it's hardly new. As I said earlier, that was exactly the original intent when IMF was created along with what has become World Bank in 1944 at Bretton Woods. (For more on the subject, I highly recommend The Creature from Jekyll Island: A Second Look at the Federal Reserve)

You know what's next: global currency. Oh wait, they have been talking about that for quite some time already (China wants one and UN wants one). Maybe they have already picked the name for the currency then. Oh wait again, John Maynard Keynes already picked the name: it's "Bancor".

Technocrats in regional and global organizations like EU, IMF, World Bank are increasingly dictating how we live our lives. If you are not a 'globalist' and if you still insist on national sovereignty (not to mention regional or local sovereignty), you might be accused of being a "racist", a popular word these days to describe any opposition to official policies.

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