IMF news these days. Just a hunch.
http://www.vanguardngr.com/articles/2002/columns/c129032004.htmlVANGUARD COMMENT:- IMF and Nigeria's economyAt the launching of the country’s new mantra, the National Economic Empowerment and Development Strategy (NEEDS), the World Bank and its affiliate Breton Woods Institution the International Monetary Fund (IMF) were in attendance to give endorsement.
The President of the World Bank, in a fit of excessive exuberance, even proclaimed the new Minister of Finance “the greatest “ we have ever had in this country despite the fact that she has had less than a year on the job and Nigerians are yet to see the “greatness” which Wolfensohn proclaims.
We are reminded of the praises that were lavished on the Structural Adjustment Programme (SAP) of the Babangida administration when it was launched in 1986. Within months, the nation was being told by the World Bank, the IMF and the Nigerian government as well as the local echoes of the Breton Woods Institutions of gains that were being consolidated.
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Surprisingly, the IMF at the launching of NEEDS announced to startled economic observers that the Nigerian economy grew at an estimated 10.75% per annum last year. The claim is astonishing for three reasons. First, there was no way the economy could grow at that rate without significant improvement in employment. And there wasn’t. Even the government of Nigeria does not claim that. Secondly, the President in his 2004 Budget speech estimated the GDP growth for 2003 at 4%; the Central Bank and the Manufacturers Association of Nigeria (MAN) as well as the Office of Statistics had lower estimates ranging from 3.2% to 3.8%; but none was anywhere near 10% as claimed by the IMF. Third, is the discernible pattern of the IMF to over-estimate positive economic indicators each and every time a country has swallowed its prescriptions only for those figures to be revised much later when the programmes fail.
Vanguard would urge the government of Nigeria to be wary of the praises it is now receiving from the World Bank and especially the IMF. It was the latter that advised the country to borrow the first $2.8 billion on the argument that the nation was under-borrowed and could easily repay. It tacitly encouraged other loans taken which together got us into an intractable debt trap. History should be our guide that the recommendations of the IMF have never done us any good. If we must dine with the officials of that institution, it must be with a long spoon.
http://www.b92.net/english/news/index.php?&nav_category=&nav_id=27784&order=priority&style=headlinesLabus promises to cut fiscal deficitBELGRADE -- Monday – Serbia said on Monday it could not cut its 2004 fiscal gap to below 3.0 percent of gross domestic product as advised by the International Monetary Fund, but vowed to continue to lower the deficit and overall spending.
"The IMF proposal is that immediately this year we cut our fiscal gap to 2.5 percent, to meet the Maastricht criteria. But even more advanced countries like Germany cannot do that," deputy Prime Minister Miroljub Labus told an investor meeting.
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"The IMF is very concerned with our spending. They want us to cut the deficit to 30 billion dinars," he said and added that some cuts had been agreed but Serbia's planned spending was still 10 billion dinars above what the IMF would want to see.
"But I am sure we will reach the agreement with the IMF in April," he said.
http://www.forbes.com/business/newswire/2004/03/29/rtr1315007.htmlParis, Berlin seek 50% Iraq debt writeoff -sourcesBERLIN, March 29 (Reuters) - France and Germany have agreed to push for a 50 percent reduction in Iraq's debts to sovereign country creditors, sources familiar with the negotiations said, in a move that may disappoint supporters of a bigger write-off.
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In a bid to rebuild Iraq's war-torn economy, major creditors have spoken of the need for a "substantial" debt cancellation for Iraq, seen by analysts as anything up to 80 percent.
One official closely following the stance of France and Germany said, "Fifty percent is what they are looking at".
France and Germany, which are increasingly trying to take joint stands on European and international issues, are among the bigger creditors in the club behind Japan and Russia, and are owed almost $6.0 billion and $5.0 billion respectively.
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Analysts also believe the United States will push for a greater reduction in the Iraqi debt burden. Former U.S. Secretary James Baker has been touring foreign capitals drumming up support for move to cut the amount of money Baghdad owes.
Sources watching the deal say progress on tackling Iraq's debts is slow, partly because the International Monetary Fund is finding it harder than expected to come up with a calculation of what could be considered a bearable level of debt for Iraq.
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The IMF was originally supposed to come up with estimates by April of what could be regarded as sustainable levels of debt, but is expected to do so by May at best, sources said.
The IMF's view is considered a vital step in the process of working towards international accords on debt relief. The Group of Seven leading industrialised nations, including the United States, has set its sights on a deal by end-2004.
Perhaps that helps to explain Snow's comment last week:shrug:
http://www.forbes.com/markets/newswire/2004/03/25/rtr1311696.htmlUS Treasury's Snow says limit to IMF resourcesWASHINGTON, March 25 (Reuters) - U.S. Treasury Secretary John Snow said on Thursday that the official resources of multilateral lenders like the International Monetary Fund were limited and not endlessly available.
"We have underscored the limits on the IMF's resources by making clear that there will no quota increase in the foreseeable future," Snow said, referring to the contributions from member countries that generate most of the IMF's financial resources.
http://www.miami.com/mld/miamiherald/news/opinion/8301178.htmHire best economist for the jobHorst Kohler's resignation as managing director of the International Monetary Fund offers a unique opportunity to reform the embattled international financial institution.
What the IMF needs, as a first step toward comprehensive reform, is a new leader with solid technical training, a broad vision and ample experience in dealing with the macroeconomic risks faced by emerging and transition economies. Kohler lacked all of these characteristics.
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Not surprisingly, the most knowledgeable people on crisis prevention and crisis resolution are in the successful countries of Latin America. After decades of instability, some Latin American countries -- in particular Chile and Mexico -- have become an example of prudence, austerity and macroeconomic stability. These nations have learned the hard way. Their leaders understood that to achieve prosperity and social progress, a combination of good economic policies, political realism and well-funded social programs was required.
http://www.larouchepub.com/other/2004/3111financ_dynamite.html`Dynamite Is Everywhere'In Financial System NowAs Presidential candidate Lyndon LaRouche was addressing his Australian movement on March 5 ("This World Monetary System Is on the Way to the Burial Grounds," see below), alarm bells were indeed tolling very loudly for the global financial system, which threatened to explode before the U.S. Democratic Party holds its nominating convention in July in Boston.
While the bomb the International Monetary Fund (IMF) and monetary authorities were working hardest to defuse was the Argentine debt bomb, even bigger explosives lay elsewhere. One London banker told EIR, "Argentina may be a difficulty for the Fund and for the financial world, but if you're looking for the really big crisis, look at the United States. A giant crisis is coming there, sooner than most people think. It is now clear, that what has been keeping the system going, is just pumping of liquidity.... The United States is the place to look, for where the really big crisis will hit." A series of U.S. economic disasters were announced in early March, like blows which sent the stock markets reeling, made pathetic the Bush Administration's "recovery" bravado, and deepened the fears of Fed Chairman Alan Greenspan and his international counterparts about "systemic threats" of a collapse.
U.S. Debt Bomb Gets Worse and Worser
The U.S. Labor Department's March 5 report on unemployment in February, though shocking in its major announcement of the complete lack of job creation in the economy, was much worse for its small print. Nearly 3 million Americans have dropped out of the labor force since March 2001, and almost 400,000 abandoned the labor force in February 2004 alone—in addition to the 8.2 million unemployed and 5 million forced to work only part-time—making real unemployment well over 10%. A steadily shrinking labor force has never appeared in any U.S. "post-recession" in 100 years—only in the first years of the Great Depression. The February report also revealed that the average American employee's wage had grown only 1.6% in a year, while his or her household's average debt had grown by 10.4%, and home prices were inflating at a 15% annual rate. The unemployment report was claimed, politically, to lock the Federal Reserve into "no rise in interest rates until 2005" from their current 40-year low. This is a fatal trap for the central bank, as some Fed governors clearly see, in an economy actually bursting with inflation as the dollar falls (see article, page 15).
Then on March 10 came the worst-ever trade deficit report from the U.S. Commerce Department, a $48.4 billion trade deficit in January (approaching a $600 billion annual rate), as U.S. exports fell during the month despite the dollar decline; and a $43 billion current-account deficit in that month. This and the $5-600 billion Federal budget deficit had scared Greenspan, during Senate testimony on Feb. 25, into demanding drastic austerity against government entitlements, including Social Security and Medicare, and other desperate measures in order to preserve the system of free trade. One newsletter published by a senior Republican Party figure reported that Greenspan frankly "fears another great depression," and believes that all that has held off disaster so far "is the exponential growth of credit derivatives" which have "sheltered the banking system from a catastrophic collapse."
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http://www.kitco.com/weekly/paulvaneeden/mar262004.htmlIs the current rise in the gold price sustainable?Many gold investors (myself included) buy the metal as a form of insurance. In my case, gold is not insurance against social or political perils like the railway bombings in Madrid or Israel’s assassination of Sheikh Ahmed Yassin -- some of the factors behind gold’s increase this month.
Political or social violence is unpredictable, which is why investing in anticipation of it is a bad idea. Political and social violence is also relentless, which is why people adapt to it, and why the market’s reaction to violence is usually a short-lived phenomenon.
No, the reason I am in the gold sector is the transformation that’s occurring in our international monetary system. Since 1944 the US dollar has been the world’s official reserve currency, allowing the United States to inflate its currency with impunity while other countries have to bear the cost of their financial and fiscal indiscretions. With the establishment of the euro, and with growing resentment toward US Foreign Policy, we are witnessing the conclusion of the dollar’s reign.
Even if the demise of the dollar is going to take many decades to unfold, the dollar has a severe short-term problem. This problem has a name: Trade Deficit. And in this case short-term means five to ten years, about the extent of my investment horizon.
The trade deficit alone is a virtual guarantee that the dollar will decline on foreign exchange markets. No country, company, household or individual can consume more than what it produces for any extended period of time without getting into trouble. If you don’t believe me, try.
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