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The IMF has been making a lot of noise recently, but their biggest move almost managed to slip through completely unnoticed.
The Executive Board of the International Monetary Fund (IMF) today approved a ten-fold expansion of the Fund's New Arrangements to Borrow (NAB, and transfer the Fund's premier standing credit arrangement into a more flexible and effective tool of crisis management. The NAB will be increased by SDR 333.5 billion (about US$500 billion) to SDR 367.5 billion (about US$550 billion), representing a major increase in the resources available for the Fund's lending to its members.
This IMF program didn't even exist until a year ago, when the IMF began issuing SDRs for the first time since the 1970's. The IMF has only sold SDRs in times of global financial stress.
It makes a person wonder "Why now?" Why is the IMF suddenly tripling its lending facilities? What do they know that we don't?
A few days ago Dominique Strauss-Kahn warned about public debt levels. However, that wasn't the announcement that needed attention. The really scary report came from the Bank of International Settlements a week ago.
"The aftermath of the financial crisis is poised to bring a simmering fiscal problem in industrial economies to the boiling point", said the Swiss-based bank for central bankers -- the oldest and most venerable of the world's financial watchdogs. Drastic austerity measures will be needed to head off a compound interest spiral, if it is not already too late for some.
Official debt figures in the West are "very misleading" since they fail to take in account the contingent liabilities and pension debts that have mushroomed over recent years. "Rapidly ageing populations present a number of countries with the prospect of enormous future costs that are not wholly recognised in current budget projections. The size of these future obligations is anybody's guess," said the report. The BIS lamented the lack of any systematic data on the scale of unfunded IOUs that care-free politicians have handed out like confetti.
Britain emerges in the BIS paper as an arch-sinner. The country may have entered the crisis with a low public debt but this shock absorber has already been used up, exposing the underlying rot in the UK's public accounts.
Of course Britain's "shock absorber" was used up bailing out its banks, not by spending it on public pensions and health care. The reports never seem to mention things like that.
Originally posted by time91100% debt to GDP ratio before 2012.
Originally posted by Moonsouljah
Originally posted by time91100% debt to GDP ratio before 2012.
I'm doing the math on my fingers and that don't add up to a functioning economy.
.
Originally posted by drew hempel
And this is just the money -- just wait till we run out of water in 20 years, not to mention the oil crisis hitting in a few years.
Ah civilization -- looks like this is it!