Community | July 26, 2011 | 44 comments

New IMF Chief Urges Immediate US, EU Action To Solve Debt Crises - Starts Cracking Whip on Western World

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Schnookums
U.S. and European leaders must act urgently to address their sovereign-debt problems to avoid putting a fragile global recovery into a tailspin, the new head of the International Monetary Fund warned Tuesday.

Christine Lagarde reiterated her warning to U.S. authorities that a deal on raising the debt ceiling must be resolved "immediately" to prevent damaging and serious spillovers to the rest of the world.

Lagarde said that while the U.S. needed to promptly draft a credible plan to tighten its budget and raise revenue to counter its bloated finances, lawmakers should take care not to be "unduly hasty" by front-loading cuts. That's especially true given the likelihood the U.S. is facing another jobless recovery, she told the Council on Foreign Relations in New York. Crafting a credible plan would likely have only modest contractionary ramifications on demand and maybe more positive effects, the IMF chief said.

Europe, meanwhile, needs to quickly implement measures promised by leaders last week. Heads of state there agreed to a new EUR109 billion financing deal for Greece, including significant private bondholder participation. In exchange, Athens vowed to deliver a fundamental restructuring of the country's economy and state finances, including an ambitious privatization plan. Euro-zone leaders also promised to strengthen the bloc's economic governance.

"They don't have the luxury of time, I think there is an expectation that things now have to happen and have to be delivered," Lagarde said.

The deal showed that leaders are committed to the euro, however, Lagarde said.

"It's possibly a major shift in the European construction, leading the way to fixing this monetary union that was only half-constructed, not completely defined," France's former finance minister said. The sovereign-debt crisis "revealed the risks posed by an incomplete economic and monetary union." The IMF says Europe needs to move toward fiscal federalism, even if that means its members' must yield sovereignty.

For Greece, the combination of newly relaxed financing terms and private bondholder participation "improves significantly" the sustainability of the country's debt, a key tenet of fund loan support. Some IMF executive directors have expressed concern that Athens' debt is too large and some economists fear that even with the new program, Greece will struggle to grow out of its financial bondage.

The IMF chief said she was encouraged after a meeting Monday with Greece' finance minister that the country is progressing with a key program to privatize the country's public assets. The fund estimates the country has around EUR300 billion that could be sold to help retire its mountain of debt.

Whether the governments can deliver is one of the biggest risks, and markets are watching closely.

"Turbulence could easily resurface," Lagarde warned. "Even the tough fiscal and structural measures adopted by the affected countries have not convinced markets that a lasting solution is in place," she added in her prepared remarks.

"Whether that will be sufficient to convince the markets remains to be seen because markets are always in trepidation and they expect the worst rather than the best...clearly they don't like uncertainty," Lagarde warned.

Underlining her point, Italy and Spain continued to come under attack by markets uneasy over the countries' financial and fiscal health.

Biagio Lapolla, a strategist at RBS, said, "Only a satisfactory systemic response to prevent contagion to Italy and Spain will bring back yields." Although European leaders gave the EUR440 billion euro-zone bailout fund more flexibility for dousing sovereign debt fires, markets have criticized officials for not boosting the size of the fund to prepare for larger economies to need external financing.

Lagarde said the IMF, a vital partner in the euro-zone bailouts, would soon have to address whether the fund will need more resources to tackle growing debt crises.

"Maybe it could do with more," she said.

http://online.wsj.com/article/BT-CO-20110726-713262.html
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44 comments // New IMF Chief Urges Immediate US, EU Action To Solve Debt Crises - Starts Cracking Whip on Western World

  • H2O_4U
  • hurleyburly
    • 0
      hurleyburly  

    • Europeans giving stark warnings and dire predictions is right up the rights wheelhouse. Thumbing the socialist commie europeans in the nose is just the sort of thing the right responds to. Yes, so they would rather devour the messenger than the message...global is still a word..they are trying to come to grips with.

    • 10 months ago
  • good_stuff
    • 0
      good_stuff  

    • Pretty funny that a bunch of European countries can agree to give greece a crapton of money, knowing full well that they'll never be able to pay it back. America on the other hand can't even agree on whether we should take the money like greece did.

    • 10 months ago
  • Warren_Merrill
  • Schnookums
  • Paratus
  • mspray11
  • TrishR
  • Warren_Merrill
  • Schnookums
  • alexandrek
  • Schnookums
    • +2
      Schnookums  
    • alexandrek:

      You speak of significantly higher capital charges in the event of a default (which is a given), but what of the $1.5t in 'excess' reserves parked at the Fed , speaking of regulators moving quickly to waive the rules? As it is unlikely we will see a quick reversal of Rule 157 which in part made those 'reserves' possible, what do you think the big players are going to do with it all if they are not deriving loans off of it?

      Sure there will be all kinds of buck-breaking going around, but the well connected players learned their lessons from the last explosion in the repo and interbank markets and are much more prepared. As it stands now your general sentiment of shit hitting the fan in the event of a default is apt, but it's only a truly losing proposition if we go back to the same 'ol, same 'ol after we pick up the pieces. On the other hand, the general pain of a default might be worth it if we change the game rather than continue to play patty-cake with the fiat bankers for another few years. Perhaps we should look at Iceland and see how they're doing?

      By the way, it's nice to see the Buttonwood columnist from "The Economist" magazine taking a notice in CurrentTV's user forum. It would be nice of you though to use original words as I already read this last month......

    • 10 months ago
  • Wyley_Wombat
  • nikonwilly
    • +1
      nikonwilly  

    • 200 million go on strike after closing out their personal banking accounts and buying approx. 200 million firearms and ammunition. The run on food markets and pharmacies are expected to follow....
      Future headlines ???? lol!

    • 10 months ago
  • Saladin
  • PressCore
    • +2
      PressCore  

    • http://Government.th

      " Their soverign debt problems " HaHaHaHaHaHa. If the USA and the
      EU's countries had any measure of real Soverignty left, then any debt
      problems we might have would be relegated to 100% internal within
      the East and West coasts. It's the entire corrupt Bankster debt based
      currency system that's a Ponzi Scheme scam which is the problem. I
      suspect if the Rothschilds hadn't greased the Congress of 1913 with
      enough 1st degree Commercial Bribery, to dupe them into confering
      the criminal privilege of printing our currency, then we here in the USA
      would not have any " soverign debt problems " The USA has very little
      if any soverignty left to have a soverign debt problem about !!! If we did
      yet have the Soverignty we did in Theodore Roosevelt's time in 1908
      then the Treasury would still be iisuing U.S. Notes. There would be no
      national debt. And the USA wouldn't be in the shitless position it was
      at the G20 summit in Pennsylvania when the IMF dictated terms to us.

      " Our " Gummint sold the Rothschilds something the Government's
      people couldn't own, and in a manner of speaking stopped being our
      Government. By establishing a corrupt system that would continue to
      bribe them with a $12 Billion annual excess of what they needed to
      spend on themselves, the Rothschild's guaranted their Fed Trojan
      Horse would invade and destroy the USA without firing a shot, so
      they could capture the USA intact, while they looted it at their leisure.
      That initial Bribery was enough to dupe them into passage of the
      Federal reserve Act, the biggest UnConstitutional act in History 2nd
      only to the Prohibition of 1937, and 1972, or the infamous false flag
      Patriot Act. Because all of these horendously AntiConstitutional acts
      guaranteed Organized Crime wave after wave to wreck the USA so
      badly my grandfather and father wouldn't even recognize it today.

      The Fed ended the genuine Soverignty the USA was able to preserve
      for the first 120 years of its existence. And the Fed guaranteed that the
      horendous level of corruption present on Wall St from the Tamany hall
      infamy Roosevelt had to contend with as NYC police chief & Governor
      then President would escalate to full scale Piracy flaunting itself flagrantly
      in the public eye today to the point where as yet unindicted Racketeeers
      would not only be at large, but would be so overconfident they would brag
      they could take over our Treasury which belongs to 300 Million living
      Americans and all future generations of Americans without their consent,
      unlawfuly in blatant violation of our Constitution. That's what happens
      when people bleat Baaaaaa, as brigands' hyperaggression systematicly
      destroy all that 7 generations of honest Americans built up,sacrificed for
      to preserve so their grandchildren could have their Liberty maintained.
      No soverignty happens when hypnotized sheeple call paper " money "

    • 10 months ago
  • Schnookums
    • +2
      Schnookums  
    • PressCore:

      Powerful words as always, my friend. As in the past, I still contend that unique paper objects can be an effective currency, though I agree they cannot be money.

      I believe it all comes down to who issues it and how it's put into circulation that dictates the long-term success of a currency (while allowing metals to circulate freely as well).Sadly, we are a little short on contemporary examples of this kind of monetary freedom.

    • 10 months ago
  • alexandrek
  • Schnookums
  • alexandrek
  • Schnookums
  • alexandrek
  • Schnookums
    • +2
      Schnookums  
    • alexandrek:

      Ha! The value of the dollar......yes, I'm familiar.

      Still, we're all on a sinking ship my friend. We may beat China in the race to the bottom of the currency roller-coaster (though I seriously doubt that) but make no mistake, we're all destined to hit rock bottom someday.

    • 10 months ago
  • figgdimension
  • PressCore
  • JanforGore
  • figgdimension
  • PressCore
  • PressCore
    • +2
      PressCore  
    • figgdimension:

      We definitely are not the IMF Banksters' slaves, at least strictly speaking.
      True slaves have to be fed, watered, have their medical care taken care
      of, and their health covered because true slaves are valued. Americans
      have been rendered into a duality of Bankster slavery and non slavery
      simultaneously. ( I'm a Zen Bhuddist, who's formaly studied Logic & Law, so
      this doesn't boggle my mind with any apparently unresolved contradictions.)
      Americans are both simultaneously because our society has been structuraly
      reorganized into a feudal system. Yes, that's right. All the while people thought
      they were progressing forward by taking strides to advance civil rights, end
      poverty with LBJ's Great Society...we were turned around by the Banksters
      so that they could regress us in all practical ways possible. Money is the
      underpinning our economy is based on. If you asked the average American
      what he considered money he'd likely say paper currency. He likely has no
      knowledge of the American Heritage which the free masons established for
      us based on 5,000 years of human History. He never cared to learn it. He
      presumed he wouldn't have to take any active interest in his nation's public
      affairs because that's what his income taxes are supposed to pay for, right ?
      Wrong on both counts. Paper isn't money. And you can't pay people to care
      any more than you can buy intelligence. You can hire or bribe spies with the
      goal of giving you information. But you still can't buy the wisdom it takes to
      read between the lines, which is how the term intelligence is still derived.

      The foreign Bankster's goal,( and their domestic tools who act foreign to the
      Constitutional American way of life as their henchmen ) was to convert our
      wealth into theirs by converting our society into one they could also own. Ie,
      they knew the only way to guarantee their Piracy, was not only to own our
      wealth, but to own the people who owned " their " wealth. Federal Reserve
      currency is Ponzi Scheme debt based paper designed to convert our wealth
      into theirs. They used Felony 1st degree Commercial Bribery to grease the
      palms of the 1913 Congress into selling them something they didn't own-the
      criminal privilege to counterfeit currency. Then used their UnConstitutional
      counterfeit currency to redeem Treasury Minted coins which is money to convert
      our wealth into theirs. Bankster interlopers first came in between the public's
      Treasury, managed in trust by the Government, to disrupt the lawful fiduciary
      bond between the public Treasury and the public. They usurped the Treasury
      function of issuing U.S.currency, as promisory U.S.Notes are eg Gold Notes
      blue seal Silver Certificates to redeem our money. They at first competed with
      the Treasury Notes by printing their own FRS notes to convert our coined money
      into their possession. Until their debt based Ponzi Scheme currency scam ran
      up such a huge national debt that their worthless paper backed only by the
      USA's industrial capacity to produce products here that foreigners wanted to
      buy caused a rise in Silver prices due to their overprinting currency causing
      inflation. By 1965 the FRS achieved a Monopoly on displacing the Treasury
      U.S.Notes, running up their national debt based currency to crisis debt today.

      Fed Banksters usurp the printing of our currency, then loan our own currency
      back to us for a finance charge based on worthless inked paper. They then
      run up their Ponzi Scheme national debt then use the Treasury as their servant
      to sell their bogus illegal debt to other producing countries like China, Saudi
      Arabia. Then the countries who have bought up the FRS ponzi Scheme debt
      begin using it to buy up real estate, and infrastructure inside the USA. The Fed
      has done everything in secret for 98 years to enrich their Rothschilds' owners
      who are part of the International Monentary Fund. And all because the stupid
      asses of this world still parrot that paper=money. In the original feudal system
      there were 3 tiers of humans ranging from have all to have nothing. In this world
      you are what you own. The top tier consisted of the King, his landed barons
      which would be the Banksters, Billionaires/Millionaires, Government equivalent.
      The middle tier would be the serfs who went from birth to death without Liberty.
      They had to work not only for their keep, but for the upkeep of the top tier who
      owned them as quasi slaves. Ie slaves, but not slaves. Why ? Tier 3 who were
      the slaves who were 100 % slaves were valued because they were able bodied.
      They had to be fed/watered, clothed, their health & medical care maintained by
      the middle class serfs who were also supporting the upper class nobliity. We've
      seen the Bankster owned Government sell out the middle class since the Nixon
      era to make anyone earning more than $135,000-$135,000,000 pay the same
      tax rate...Meaning the middle class has paid the Billionaires' taxes so the middle
      class serfs are being squeezed out of existence to make only rich & poor.

      Sound familiar ? So no, we're not the IMF Banksters slaves, yet. We're simply
      BEING enslaved. If current.com members have any doubts as to my calling the
      Bankster M.O. as one of Felonies, Google up the N.Y. penal statutes defining
      1st degree Coercion, 1st degree Unlawful Imprisonment, Labor Traficing.
      Labor Traficing is our equivalent of the Federal statute outlawing Peonage
      (Slavery). These Felonies comprise Enterprise Corruption violating the NYS
      Organized Crime Control Act, the Federal equivalent of Racketeering. If
      people thought anyone's exaggerating by calling them Banksters, then you
      don't know the law. Maynard Rothschilds: " Give me control over any nation's
      currency, and I care not for whoimever makes the laws. ( implying he could buy
      laws like groceries ) If President Eisenhaur defaulted on the Bankster's Ponzi
      Scheme national debt in 1957, as Iceland did in 2010, they could have down
      graded the Big G's credit rating, and noone would have ever been in crisis over
      the future of the USA over it. Usery means bankers loan money to people who
      can use money not to those who need it. Part of that dualistic conundrum again.
      By June 2012 my credit rating should be over 800, but ironicly I won't need to
      use it either. Borrowing from the future to finance today means the middle class
      (we) pay, and pay, and pay(feudal system). The future's not promised to any
      body. We forgot the meaning of In God We Trust-for all the rest it's cash & carry.

    • 10 months ago
  • Schnookums
    • +4
      Schnookums  
    • PressCore:

      Some people (though I would suspect not many Current readers) have a very difficult time internalizing the fact that it takes more than "paying my taxes" and making a selection on voting day to be an American citizen.

    • 10 months ago
  • PressCore
    • +2
      PressCore  
    • Schnookums:

      Yes. Most wouldn't begin to know their voting records, much less their
      more clandestine affiliations. The voters are often, routinely hoodwinked.
      And we all have to live with the damage their poor choices make. I suspect
      that's the entire reason we often get poor choices offered to us

    • 10 months ago
  • warman1138
  • PressCore
    • +2
      PressCore  
    • warman1138:

      I say we get Dolph Lundgren to star as He Man to come back and combat
      Skelator (Bush's Treasury sec/Goldman Sach's king snake Paulson ) ! For
      we are Americans., As we all know, Americans are Masters of the Universe.
      Now if we all could only learn how to tie our shoes....

    • 10 months ago
  • warman1138
  • PressCore
  • demsbeans527
    • +3
      demsbeans527  

    • Making the world nervous. I bet that after the 2008 fallout they thought of taking measures to untie their financial stability from US markets. Now they are probably considering it even more. Especially when you have nut cases running around stating there will be no consequences for defaulting. Everything has consequences. Everything!

    • 10 months ago
  • Schnookums
    • +3
      Schnookums  
    • demsbeans527:

      Defaulting would definitely increase the opportunity to be able to consolidate and increase control. Someone fighting for the people would have to able to stand up and say 'no' when the power-grab was occurring.

    • 10 months ago
  • COMMONSENSEFORCOMMONGOOD_COM
  • demsbeans527
  • figgdimension
  • JanforGore
    • +6
      JanforGore  

    • Just wait until they privatize our water and other resources as collateral for that big loan they are going to give us after we get downgraded.

    • 10 months ago
  • PressCore
    • +2
      PressCore  
    • JanforGore:

      If they want my water, they want my blood. Justifiable homicide will be the only
      thing they'll get in return. Besides. They don't realy want water. The water crisis
      in the wet Northeastern States of America hasn't arrived yet. What they want is
      CONTROL over our water, which would mean total control over our lives, as in
      a domination monopoly aka Slavery. Involuntary servitude by Coercion is next.

    • 10 months ago
  • Schnookums
    • +7
      Schnookums  

    • You'd think that the IMF would be a little easier on Obama seeings how he handed them, personally, the keys to the monetary castle when he approved the IMF's Fourth Amendment in August 2009.

    • 10 months ago
  • queenofit
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