That nice little vertical line is a gain of $421.8 billion dollars of outstanding loans and leases in one week's time.
Posted on 04/12/2010 8:49:33 PM PDT by Zeddicus
IMF Prepares For Global Cataclysm, Expands Backup Rescue Facility By Half A Trillion For "Contribution To Global Financial Stability"
And all the pundits thought that the IMF would be on the hook for just €10 billion... The IMF has just announced that it is expanding its New Arrangement to Borrow (NAB) multilateral facility from its existing $50 billion by a whopping $500 billion (SDR333.5 billion), to $550 billion. The current lending participant group of 26 entities will be increased by 13 new members all of whom will contribute token amount of capital to the NAB. The one country most on the hook in the new and revised NAB - the United States of America, will provide over $105 billion in total commitments, or 20% of the total facility. The US is currently on the hook for just $10 billion, meaning its participation in global bail outs just increased by $95 billion. And the bulk of these bailouts will certainly be located across the Atlantic. What is most troublesome is the massive expansion of the NAR. If the IMF believes that over half a trillion in short-term funding is needed imminently, is all hell about to break loose.
(snip)
We have a few questions:
1) Just where will central banks suddenly find access to over three hundred billion in SDRs (which is what this facility is based on)? Also, we are curious just how this SDR expansion will impact dollar levels. As the dollar is the primary component in the SDR basket (17%), banks will have to sell more dollars than other currencies on a pro rata basis to increase their SDR holdings. What will happen to the DXY when $85 billion new dollars flood the market via assorted CBs but mostly the FRBNY?
2) Who came up with the expansion factor? Why is Japan's allocation increasing by 18.7x, that of the US by 7.2x, while that of the Bundesbank only by 7.2x? We thought the IMF is more of a eurocentric bailout facility? Why does it fall upon the US taxpayers to disproprtionately bailout Greece?
3) What is the joke with having Greece join the group of new participants? The IMF sure has a sick sense of humor.
4) Curious how this comes the day before Greece is supposed to auction off some ultra-short term debt. If this facility is enacted, watch for sovereign credit curves to hit 60 degrees, with near-term risk disappearing, once again courtesy of Joe Sixpack. We hope you pay your taxes by the April 15 deadline.
5) Funny money will galore. At this point nobody will allow anyone or anything to fail.
Here is the full table of old and existing contributors. Congrats US - you are once again leading the charge in the world bailout.
(snip)
How'd it feel this time? Did you like it? Better get used to it, because these vicious global government rapists are just going to keep passing us around until there's nothing left of us.
That nice little vertical line is a gain of $421.8 billion dollars of outstanding loans and leases in one week's time.
Damned if I know. I’ve been trying to follow Karl’s threads on this too and I can’t make heads or tails of it.
Whatever it is, it’s got to be bad. It’s kind of like week-old roadkill - you can’t identify it, but you know it’s disgusting and stinky and will probably make you sick if you get too close to it.
Yea, I saw that and could only say “WTF?!”
I’m pretty busy for the next few days, so I won’t be able to dig into it. If anyone else does, please ping me.
4am bump ;-)
When they call me an “isolationist” and “protectionist”.....those people are the ones who support statist gloablist entities like the IMF
Looks like another US taxpayer bailout of a Globalist entity
Make a ping list and put me on it : )
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