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Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that America is facing something approaching a debt Armageddon.
"The deficit will recede somewhat over the next two years as the temporary stimulus measures wind down and as economic recovery leads to higher revenues," he said, testifying before Congress' Joint Economic Committee.
"Thereafter, however, the annual deficit is expected to remain high through 2020, in the neighborhood of 4 to 5 percent of GDP," he said.
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?
To answer that, let's look at the announcements of the past few weeks.
The IMF has been busy issuing warnings over the past couple weeks. If this massive expansion of lending resources is a direct reaction to their recent statements, then we are looking at a severe financial shock in the near future.
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That's where the SDR comes it. They simply swap out their dollar-based debt for SDRs.
It should be noted that SDR is merely a ledger entry. Its is a composite of major reserve currencies, rather than a new currency by itself, but it does help diversify.
The reason for the IMF rolling this out now might be two-fold:
1) an approaching financial crisis that the IMF needs to build up its reserves to prepare for, and
b) the demands of Asian creditors to diversify their holdings in order to help avoid the impact of that coming financial crisis.
Originally posted by andy1033
Op, yep there was a thread yesterday on this with video i think.
Originally posted by CookieMonster09
Bernanke is not to blame for Congress' out of control spending.
Between the decade long military spending in Iraq and Afghanistan, the bloated phony-baloney "stimulus" package, and now this huge unconstitutional healthcare boondoggle, you have only Congress to blame.
The deficits we are running can't be blamed on the Federal Reserve - They are the result of Congress' out of control spending addiction.
The deficits we are running can't be blamed on the Federal Reserve????? Source please. I want a source provide the data as to why you would make a statement to what I believe to be very far from the truth. I'm not trying to bash you or anything like that so please do not take this as me engaging in flame war like activity or bashing you. I'm just really curious as to why you would say that.
...and the Federal Reserve using our money for bailouts not just here but across the world. The source I have for that is the grilling that Grayson and Paul gave Bernanke concerning very odd data and statements that Bernanke provided concerning over 600 million of our money going to foreign banks.
Originally posted by skunknuts
There's also a thread bashing Bernanke (and Obama) for the chairman saying the recovery looks to be strong from the same testimony.
Originally posted by CookieMonster09
Bernanke is not to blame for Congress' out of control spending.
Between the decade long military spending in Iraq and Afghanistan, the bloated phony-baloney "stimulus" package, and now this huge unconstitutional healthcare boondoggle, you have only Congress to blame.
The deficits we are running can't be blamed on the Federal Reserve - They are the result of Congress' out of control spending addiction.
The Bank for International Settlements (BIS) is an international organisation which fosters international monetary and financial cooperation and serves as a bank for central banks.
The BIS fulfils this mandate by acting as:
• a forum to promote discussion and policy analysis among central banks and within the international financial community
• a centre for economic and monetary research
• a prime counterparty for central banks in their financial transactions
• agent or trustee in connection with international financial operations
Where does the IMF get its money?
The IMF's resources come mainly from the quotas that countries deposit when they join the IMF. Quotas broadly reflect the size of each member's economy: the larger a country's economy in terms of output, and the larger and more variable its trade, the larger its quota tends to be. For example, the United States, the world's largest economy, has the largest quota in the IMF. Quotas are reviewed periodically and can be increased when deemed necessary by the Board of Governors.
Now to Cookie....So, Bernanke and the Fed are not to blame huh? Well, actually my friend they are and let me show you why...
For you to actually waste on lick of breath on the Federal Reserve and their Grand Puppet, Ben Bernanke, is not only outrageous it's offensive.