The crisis to come... and the why

[nadinbrzezinski]

(By the way I sent this as a PM to a fellow poster but decided to post it here... the reference to the changes are from a book called the Fourth Turning, which I highly recommend you read)

Ok here is a list of whom is putting pressure on the US to ahem impose an austerity plan, just knowing how things work in the real world.

China
India
The EU
France,
Germany.
The Russian Federation
A few Eastern European countries

A few Latin Nations.

What you are seeing in many ways is the collapse of the Bretton Woods system, and you will see quite the devaluation of the US Dollar. The American Empire is pretty much over, as well as the International Finance system. I said that when the iMF and the WB went pardoning Haiti's debt more than just Haiti suffered a quake. In ways that most Americans do not understand, everything has changed.

You have read the Fourth Turning... well this is to the level of crisis that led to that little soiree called the US War of Independence. The US may very well break into successor states, common with Empires when they fall.

Now you say but the US could tell them to kiss my ass... the US is still part of the world system and a few of those would have survived the crisis pretty well, relatively speaking, while the US would not.

Now the next five years are going to make the last eight look like a walk in the park. My god, the Chinese curse is in full effect now.

Why didn't anybody put this pressure well I mean in the open? It would have crashed the US dollar which is still the reserve currency, which I doubt it will remain as such.

But like Mexico... this sudden announcement matches an austerity program, IMF style. And given our technocratic political elite is neo liberal, there you go. Oh and mark my words... the RNC is retaking the house, probably the Senate and the WH in 2012... and why did the pressure come in NOW?

1.- Haiti, and forgiving that debt.

2.- Brown's election showed to foreign powers just how ineffective this President really is. They also realize just how fractured the US currently is...

So as they say, enjoy the Chinese Curse, because it is exactly what I have been predicting for a few years. That the World Economic system would put the screws on the US and the fall of Empire. On the bright side, changes are coming. So for all those folks screaming bout change, you are gonna get quite a bit of it. I am not sure whether you are going to be very happy about it, or realize what happens when Empires fall, but that is another story. This is no longer academic.

[flyarm]

1. This Fed Chief Brought to You by Enron

This Fed Chief Brought to You by Enron

By: emptywheel Monday January 25, 2010 7:59 am

http://emptywheel.firedoglake.com/2010/01/25/this-fed-chief-brought-to-you-by-enron/

Just wanted to throw two tidbits into the debate on Ben Bernanke’s reconfirmation. First, this quote, which needs no explanation.

In the event that Bernanke isn’t confirmed, several sources say, Federal Reserve Board Vice Chairman Donald Kohn likely would be elevated to acting chair of the U.S. central bank. Bernanke would be entitled to stay on the board until his term as a Fed governor expires in 2020, but the sources said Bernanke could instead return to a professorship at Princeton University.

Possible successors to Bernanke include three people currently advising Obama on the economy, former Fed chief Paul Volcker, Larry Summers and Christina Romer.

Kohn was traveling in Europe at the end of the week on Fed business, but strategy on the Bernanke confirmation was being led by former Enron lobbyist Linda Robertson, who is viewed as an effective advocate for the banking chief on Capitol Hill.

read the rest at the link



edit to add...



see the comments by :


xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

JasonLeopold January 25th, 2010 at 10:40 am
15

Feb 22, 2001: Enron chairman Ken Lay and Enron lobbyist Linda Robertson met with energy task force executive director Andrew Lundquist to discuss energy policy.

April 17, 2001: Enron chairman Ken Lay and Enron lobbyist Linda Robertson met with Vice President Cheney for 30 minutes to discuss energy matters, including the California energy crisis.

April 20, 2001: Enron lobbyist Linda Robertson sent an e-mail to White House economic advisor Robert McNally.

May 23, 2001: White House economic advisor Robert McNally met with Enron lobbyists Linda Robertson and Richard Shapiro.

[nadinbrzezinski]

2. A lot of this is pretty much over

this is far larger than Enron....

Think California on a federal level, with cuts in services and all the rest...

And that is just for starters.

At this point who is appointed may be Volkner, don't count on it, but he was in the IMF for a while...

[flyarm]

3. this woman was involved in the fucking of Calif..now she is working with getting Bernanke back at

the Fed..

why are dems listening to this witch?

She was one of the pivotal people that set up the destruction of the State Of Calif and the downfall of Gray Davis!

And yet she is wielding this kind of power with Democrats on Capitol Hill?? : "but strategy on the Bernanke confirmation was being led by former Enron lobbyist Linda Robertson, who is viewed as an effective advocate for the banking chief on Capitol Hill"

WHY IS SHE VIEWED AS AN EFFECTIVE ADVOCATE..WHY ISN'T SHE RUN OUT ???????? By Democrats of all stripes???

[nadinbrzezinski]

4. DLC... that is your answer

who has the power... the political elite


And all has changed... all those old calculations are pretty much over.

I've experienced this... and the last eight years gave you head aches... just wait.

All those old calculations are now done for.

On the bright side, and I am not kidding, people will wake the fuck up... and I hope they do in a positive manner.

[flyarm]

5. I know what is going on and who is responsible..but others do not..

many people here today do not know the history of who is responsible for many of the things we are seeing today. Especially the young people.

[nadinbrzezinski]

6. They are about to learn

and learn fast.

People will wake up... they always do, after things like this.

Go on and read the Fourth Turning

http://www.fourthturning.com/

I rarely hawk books here and I tend to recommend classics, but this one will explain what is going on, on a deeper philosophical level... and no, not economics or who's who in the zoo. Just about the course of history, and how it does indeed repeat itself.

I was hoping we'd avoid the depression, and we were... well I do know how those plans work... and if I was starting to spend a little more, I am back to penny pinching.

[Delphinus]

49. OK

I hope you're wrong (after reading your original post), but I'll read it and try to understand.

[Smashcut]

7. Holy shit.

That's a lot to take in. So what's next?

[nadinbrzezinski]

8. On a personal level, get rid of any debt you have

and hunker down.

It is also a golden opportunity for a political and cultural reawakening. I mentioned the Fourth Turning. I highly recommend this book

No, not an econ book, but more on the nature of history and how it repeats itself, and the cycles of US history.
'
This is a crisis... in the same level of the other three. 1776, the Civil War and the Great Depression. They changed the country. So in some ways it is up to us to try to direct that change.

But change is coming, and hard and fast.

Oh and create community, talk to neighbors, and learn a few skills that may be useful... in the end, when we come out of it, we should be better, if different.

And yes, it is a lot to take in. I have been predicting this, well before I read that book. But as a historian I have seen the trends.

So that is what we need to do... and accept that yes change comes but we can adapt and survive.

:hi:

[Smashcut]

9. Thanks for the advice, and the warning

I will get that book. I've also been meaning to read "World Made By Hand" by James Kunstler, which seems to have a similar message (create community, learn useful and forgotten skills, etc. and we will survive) although Kunstler's preoccupied w/ collapse of the oil economy. But I see your point about cyclical world-altering crises...

As for the debt, unfortunately I have over $100K in student loans which are not going awayany time soon. But it sounds like Sallie Mae is the least of my problems.

:hi:

[nadinbrzezinski]

10. It will be an interesting ride

and I wish you well.

Oh and welcome to DU.

[TwixVoy]

11. LOL ROFL "Get rid of any debt you have"

I remember when I posted this suggestion MONTHS ago and was attacked like crazy. I even had someone telling me that this was the BEST TIME to get in to debt.

Ah nadinbrzezinski... why is it so few even here on DU can see what's coming down the pipe?

[vadawg]

13. hell get as much debt as you can if the system is going to collapse

use the debt to buy shit now that you may need, its gonna be cool as shit collapses around you to be able to say "hey i got no debt before all this" rather than using shit you bought with debt beforehand to feed yourself....

[TwixVoy]

15. The system will not collapse in the way you suggest

The masses will still owe debt.

We are not looking at all out armageddon. We are simply looking at the US becoming extremely poor, as will be its citizens.

[vadawg]

17. well then still get lots of debt now then, and say screw it all

but lots of pics of madonna with all the debt and then when there is hyperinflation your debt will be worth less and you can sell the pics and make huge profits and pay of your debt.... poor as compared to what and who....

[TwixVoy]

19. LOL

So you believe we are looking at hyperinflation? Only hyperinflation would work on your little scenario. Even if it did happen - do you think your wages would go up 300% as well?

[vadawg]

21. nope but the shit i bought cheap now would go up in value compared to my debt

so the $100,000 i had in debt to buy the pics of madonna would be worth less in inflated dollars than the price i would get for the pics so i could pay it off.

[TwixVoy]

22. Oh you mean your cheap Chinese imported Wal-mart crap?

LOL ROFL. Typical American consumerist thinking.

"The shit I bought cheap". Yea, that's what you bought cheap my friend. "Shit". I'm sure your shit will save you. All your nice little possessions.

The problem is you just don't know it yet. You and everyone else in this nation happily sent your wealth to China via the middle men known as Wal-mart et al to buy your cheap chinese plastic wal-mart shit. Now you are broke.... and the sad thing is you can't even see that.

[vadawg]

24. lol when nobody has anything and they want cheap walmart crap then thats the best thing to have

lol you have no idea what i spend my money on, but i can bet i buy less cheap crap than you do.... you ralise those cheap chinese knockoff AK's would come in pretty handy...

[TwixVoy]

25. You finally figured it out!

"nobody has anything"

BINGO! We are BROKE. The corporations have raped us. You just haven't realized it yet because they've appeased you and made you feel like you do with your chinese plastic toys that you BOUGHT ON CREDIT.

[vadawg]

26. no you mean you have nothing, lots of people have accumulated real stuff

as i said you have more cheap useless stuff than i have probuably ever owned in my life, and you have probuably wasted more money than i have ever spent...

[TwixVoy]

27. Lol typical american sheeple thinking

Anything beyond your health, your family, and your friends is just "shit".

You probably think of your "real stuff" as a car, a TV, and a blu-ray player.

You sit here and brag about what you've "accumulated" lol. We as a nation are broke, and we will ALL be paying the Piper.

[vadawg]

29. lol why do you think im an american sheeple, lol

yes i have tv's etc for my family as well as other comforts that my wife and kids love, but you would be mistaken to think that my real wealth is confined to what you call real stuff.

[TwixVoy]

30. Your the one that said it not me

Why do I have a feeling you are in massive debt?

[vadawg]

31. probuably because like everythign else you are saying you are clueless

only debt i have is a small mortgage on my house in VA, but very manageable with my income stream... still wondering why you seem to think that others are american sheeple and you stand alone as a wolf...

[TwixVoy]

33. Anyone who brags about cheap wal-mart shit

as a basis for wealth is all I need to know to identify a sheeple.

[vadawg]

34. lol no i bragged that i will be selling you cheap walmart shit once everything goes to pot

you will be the one wanting stuff that i will have to sell to you, whether thats food, ammo, alcohol or cheap walmart crap. All of it no matter how shit it might seem to you can be a basis for wealth, you are just putting your american sheeple values on goods without realising that everything has value to someone and only someone who has lived a privilidged life would not understand that...

[Hannah Bell]

35. oh god. yeah, the person who thinks we still live under the bretton woods regime & the swine flu/

bank bailout hypster are unacknowledged prophets.

everyone else is living in a dream world.

[nadinbrzezinski]

41. I've posted this for years, but keep pn pratting

[Hannah Bell]

12. bretton woods collapsed in 1971. bretton woods = gold peg.

"The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold and the ability of the IMF to bridge temporary imbalances of payments. Then, on August 15, 1971 the United States unilaterally terminated convertibility of the dollar to gold. This action created the situation whereby the United States dollar became the sole backing of currencies and a reserve currency for the member states. In the face of increasing financial strain, the system collapsed in 1971."


somehow we survived.

you'll have to find a different fear to monger, the collapse of bretton woods is all used up.

[TwixVoy]

14. Um no.... you should have learned this in high school

The IMF and World Bank were created at Bretton Woods. It came as a RESULT of the crisis of the great depression and other financial catastrophes that had occurred around the globe.

Bretton Woods was a gathering of dozens of nations. They agreed to make the US dollar the reserve currency, and officially established pegged values of other currency in relation to the dollar. (for example, XX Italian pesetas = 1 US dollar)

You have it completely in reverse. This meeting set the stage for the dollar to be UNPEGGED from gold, and set the stage for the fiat money system we have in place today.

It astounds me that this kind of economic ignorance exists on DU.....

In fact if you bothered to crack a history book you would be aware the US government required ALL citizens to turn in any gold they had. Then they devalued the dollar in relation to gold.

Paper money used to say on it's face that it was redeemable for gold. Bretton Woods set the stage for the term "Federal Reserve Note" you see on your money today.

The problem is that the world is now going to dump the dollar as the reserve currency. Once that happens the Bretton Woods agreement will have failed.

This has serious repercussions for our monetary system, and will literally destroy our super power status. Due to the amount of outstanding debt our nation now has we will be a poor country for decades. Literally.

[Hannah Bell]

16. Time Magazine, 2008: "The Bretton Woods system itself collapsed in 1971, when President Nixon

severed the link between the dollar and gold — a decision made to prevent a run on Fort Knox, which contained only a third of the gold bullion necessary to cover the amount of dollars in foreign hands. By 1973, most major world economies had allowed their currencies to float freely against the dollar. It was a rocky transition, characterized by plummeting stock prices, skyrocketing oil prices, bank failures and inflation.

Read more: http://www.time.com/time/business/article/0,8599,1852254,00.html#ixzz0di6tGDrw


US Department of State:

In any event, representatives of most of the world's leading nations met at Bretton Woods, New Hampshire, in 1944 to create a new international monetary system. Because the United States at the time accounted for over half of the world's manufacturing capacity and held most of the world's gold, the leaders decided to tie world currencies to the dollar, which, in turn, they agreed should be convertible into gold at $35 per ounce.

The Bretton Woods system lasted until 1971.

By that time, inflation in the United States and a growing American trade deficit were undermining the value of the dollar. Americans urged Germany and Japan, both of which had favorable payments balances, to appreciate their currencies. But those nations were reluctant to take that step, since raising the value of their currencies would increases prices for their goods and hurt their exports.

Finally, the United States abandoned the fixed value of the dollar and allowed it to "float" -- that is, to fluctuate against other currencies. The dollar promptly fell. World leaders sought to revive the Bretton Woods system with the so-called Smithsonian Agreement in 1971, but the effort failed. By 1973, the United States and other nations agreed to allow exchange rates to float.

http://economics.about.com/od/foreigntrade/a/bretton_woods.htm

The IMF, etc. were created at Bretton Woods, but they aren't the Bretton Woods system.

My high school education was fine, thank you very much.

Cmon now, tell me the Dept of State is wrong & missed the bretton woods unit in high school.

[TwixVoy]

18. sigh....

Bretton Woods was a highly complex agreement that did MANY things. You are referencing ONE aspect of the agreement. Basically you are dumbing it down to the level of a 3rd grader and then saying it "failed". The problem is you probably had no idea what Bretton Woods was until an hour ago and have no clue it did more than the ONE thing you mention, and the one paragraph you've bothered to read about it on the internet.

Do the IMF and World Bank still exists? Yes. These were parts of the agreement and were created at Bretton Woods. Thus this part did not "fail".

Is the US dollar the reserve currency? Yes. This was part of the agreement. Thus this part did not "fail".

There were many other topics agreed to as well that are still in place today. These are the parts of the agreement that may fail in the coming years.

[Hannah Bell]

20. The department of state & time mag aren't good enough for you, here's an economics class:

Bretton Woods System and Post Bretton Woods System

...immediately following the collapse of Bretton Woods the stage was set for the continued growth and domination of the international capital market... As a consequence, policymakers are forced to consider the reaction of international financial markets to each and every policy move, lest they by "punished" by capital outflows and currency depreciation or "rewarded" with inflows and appreciation....

No true system has evolved to take the place of Bretton Woods. Instead, most developed-country currencies float against one another (with one major exception, as explained below) while those of developing nations are pegged, most often to the dollar.

For the developed countries, who continue to dominate trade and finance, the post Bretton Woods era has been a managed float within which currency prices are set primarily by market forces but central bank intervention still exists....These measures have been far short of the kind that one would expect in a fixed-rate regime, but they are nonetheless indicative of the sort of disruption of which policymakers believe international capital flows are capable.

http://www.econ.tcu.edu/harvey/5133/bretton.html


Bullshit as you like, Bretton woods died in 1971.

the reason i'm able to find links quickly is because i know what i'm looking for.

the reason you can't produce a single link in rebuttal is you don't know what you're talking about.

[TwixVoy]

23. My link

Was an actual economics book. Not a 5 minute scan of google links. Thus I have no link to produce.

[Hannah Bell]

32. I've read many economics books, & have linked some here for your viewing pleasure:

A Retrospective on the Bretton Woods system: lessons for international monetary reform

Book overview
At the close of the Second World War, when industrialized nations faced serious trade and financial imbalances, delegates from forty-four countries met in Bretton Woods, New Hampshire, in order to reconstruct the international monetary system.

Over the next 25 years, with currencies fixed to the American dollar, world trade expanded vigorously, inflation remained moderate, and national income in industrialized countries rose faster than during any other period.

In this volume, three generations of scholars and policy makers, some of whom participated in the 1944 conference, consider how the Bretton Woods System contributed to economic stability and rapid growth between 1945 and 1971 and discuss the future of the international monetary system in light of the Bretton Woods experience.

Since President Richard M. Nixon ended the Bretton Woods System in 1971, exchange rates have exhibited increasing flexibility. After twenty years of floating rates, however, there is considerable interest in once again limiting exchange rate flexibility.

http://books.google.com/books?id=8sZMXzZPr4gC&printsec=frontcover&source=gbs_navlinks_s#v=onepage&q=&f=false


Macroeconomics: principles & policies

The Bretton woods agreements established fexed exchange rates based on the free convertibility of the us dollar into gold....The overvalued dollar finally destroyed the Bretton woods system in 1971.

http://books.google.com/books?id=wU8IB2W-TbkC&pg=PA371&dq=bretton+woods+ended&cd=6#v=onepage&q=bretton%20woods%20ended&f=false


Exchange-rate rigidity, investment distortions, and the failure of Bretton Woods‎ - Page 1
Robert M. Dunn - Business & Economics - 1973 - 23 pages

Exchange-Rate Rigidity, Investment Distortions, and the Failure of Bretton Woods: If postmortems on the international monetary system of the last two decades ...

Handbook of international economics, Volume 2‎ - Page 1176
Ronald Winthrop Jones, Peter B. Kenen - Business & Economics - 1995 - 635 pages

In fact, breakdown of the Bretton Woods system ended gold convertibility, achieved flexibility in exchange rates, ended the reserve supply problem via ...


http://books.google.com/books?id=2neeMTPKtEMC&pg=PT255&dq=bretton+woods+failure&lr=&cd=10#v=onepage&q=bretton%20woods%20failure&f=false

[sendero]

55. Yes but ..

.. you apparently think there is some money in a lockbox somewhere to fund SS. So your opinion is completely useless.

[JVS]

46. .

[Hannah Bell]

28. here's some more. i think you missed that day in high school.

The first major transformation, the Bretton Woods Accord, occurred near the end of World War II....In fact, the Brettonn Woods Accord established the pegging of currencies and the International Monetary Fund (IMF) in hopes of stabilizing the global economic situation.

Major currencies were now pegged to the U.S. dollar, fluctuating by one percent on either side of the set standard against the dollar. When a currency's exchange rate would approach the limit on either side of this standard, the respective central bank would intervene to bring the exchange rate back into the accepted range. At the same time, the U.S. dollar was pegged to gold at a price of $35 per ounce, further bringing stability to other currencies and world forex situation.

The Bretton Woods Accord lasted until 1971. Ultimately, it failed, but it did accomplish what its charter set out to do, which was to reestablish economic stability in Europe and Japan. The major reason it failed was because it continued to use a set standard to fix a currency against a smaller market, such as gold.

http://www.gftforex.com/forex/brettonwoods.asp


Book overview: A Retrospective on the Bretton Woods system:

At the close of the Second World War, when industrialized nations faced serious trade and financial imbalances, delegates from forty-four countries met in Bretton Woods, New Hampshire, in order to reconstruct the international monetary system. Over the next 25 years, with currencies fixed to the American dollar, world trade expanded vigorously, inflation remained moderate, and national income in industrialized countries rose faster than during any other period. In this volume, three generations of scholars and policy makers, some of whom participated in the 1944 conference, consider how the Bretton Woods System contributed to economic stability and rapid growth between 1945 and 1971 and discuss the future of the international monetary system in light of the Bretton Woods experience. Since President Richard M. Nixon ended the Bretton Woods System in 1971, exchange rates have exhibited increasing flexibility. After twenty years of floating rates, however, there is considerable interest in once again limiting exchange rate flexibility.

http://books.google.com/books?id=8sZMXzZPr4gC&dq=bretton+woods+failure&source=gbs_navlinks_s

[Hannah Bell]

37. sighhhhhhh: definitions

Bretton Woods System

The Bretton Woods system is commonly understood to refer to the international monetary regime that prevailed from the end of World War II until the early 1970s.

Taking its name from the site of the 1944 conference that created the *International Monetary Fund (IMF) and *World Bank, the Bretton Woods system was history's first example of a fully negotiated monetary order intended to govern currency relations among sovereign states.

In principle, the regime was designed to combine binding legal obligations with multilateral decision-making conducted through an international organization, the IMF, endowed with limited supranational authority. In practice the initial scheme, as well as its subsequent development and ultimate demise, were directly dependent on the preferences and policies of its most powerful member, the United States.

written by ben cohen, Louis G. Lancaster Professor of International Political Economy, University of California, Santa Barbara.
Santa Barbara, CA 93106-9420

http://www.polsci.ucsb.edu/faculty/cohen/inpress/bretton.html


Iowa state econ dept:

For 25 years after WWII (see the timeline), the international monetary system known as the Bretton Woods system, was based on stable and adjustable exchange rates. Exchange rates were not permanently fixed, but occasional devaluations of individual currencies were allowed to correct fundamental disequilibria in the balance of payments (BP). Ever-increasing attack on the dollar in the 1960s culminated in the collapse of the Bretton Woods system in 1971, and it was reluctantly replaced with a regime of floating exchange rates.

http://www.econ.iastate.edu/classes/econ355/CHOI/bre.htm

US Dept of State:

Did Bretton Woods Fail?

Although this exchange rate structure provided the foundation for the world's monetary system for almost 30 years, it is now generally believed to have had fatal defects which caused it to be abandoned by the major countries a little more than a decade ago--in practice, in 1973; in law, with the second amendment to the IMF articles in 1976.

US Department of State Bulletin, Sept, 1984

http://findarticles.com/p/articles/mi_m1079/is_v84/ai_3408617/

[Prometheus Bound]

36. I'm afraid you're wrong about the IMF and WB "pardoning" Haiti's debt.

The WB waived debt payments for 5 years, but did not cancel the debt.

The IMF said its loan will be interest free until 2011. No canceled debt.

http://www.reuters.com/article/idUSN2111470220100121

[Hannah Bell]

38. lol. ms, "get a clue" = wrong. how is it possible?

[vadawg]

39. rofl as much as i disagree with you most of the time well played

[nadinbrzezinski]

43. They said they were looking for the legal way to do it

which pretty much means they will

[Hannah Bell]

44. they've been saying that since 1997. the legalities must be very complex.

From a 2007 analysis: Debt Cancellation for Haiti: No Reason for Further Delays

Executive Summary

Haiti is the most impoverished country in the Western Hemisphere, with 76 percent of its population below the poverty line and a life expectancy of 53 years. Yet it was originally excluded from the International Monetary Fund (IMF) and World Bank’s Heavily IndebtedPoor Countries (HIPC) initiative for debt cancellation in 1996, because of a technicality relating to its debt service burden.

Although it was subsequently included (in 2006), because of this delay Haiti is currently struggling to meet the requirements for cancellation of most of its total $1.54 billion foreign public debt. Thus, while the other HIPC countries in the Western Hemisphere (Bolivia,Guyana, Honduras, and Nicaragua) have already received debt cancellation under the HIPC and Multilateral Debt Relief Initiative (MDRI) – Haiti still has to reach the "completion point" under the HIPC initiative in order to receive debt cancellation.

If this completion point is not reached by September 2008, as now appears likely, Haiti would have to pay an additional $44.5 million in debt service payments to multilateral institutions (mostly the World Bank and the Inter-American Development Bank). This is equivalent to about 26 percent of Haiti's spending on public health, where there are many vital unmet needs. Furthermore, this total does not include bilateral debt service of $11.4million, some cancellation of which can also be expected.

There are other reasons to avoid delay. There is little reason to believe that the conditions set by the IMF and World Bank for further debt cancellation are likely to benefit Haiti.Although the experience of HIPC debt cancellation is positive with regard to the funds freed up from debt cancellation being used for poverty-reducing expenditures,1 the conditions attached to such debt cancellation do not have a positive track record.

For example, in Aprilof this year the IMF's Independent Evaluation Office released a report that examined the experience of 29 Sub-Saharan African countries that underwent Poverty Reduction and Growth Facility (PRGF) programs, and were therefore subject to IMF conditions, from 1999-2005.

The report was highly critical of the IMF's role, and among other findings noted that nearly three-quarters of the aid money reaching these countries was not spent. Rather, at the IMF's urging, this money was used to pay off debt and to add to reserves.2

Another reason that these institutions should grant immediate debt cancellation is that they contributed to enormous economic damage in Haiti by cutting off all disbursements from 2001 – 2004. There is considerable evidence that this cutoff of aid was part of a deliberate effort by the U.S. government to destabilize and ultimately topple the elected government of Haiti.3

...For a country as poor as Haiti, the aid embargo was enormously destructive to the economy,and the violence during and after the coup inflicted further damage and cost thousands oflives. Because of the multilateral creditors' participation in this destruction, and for the other reasons noted in this paper, Haiti's debt should be cancelled without further delay.



http://www.cepr.net/documents/publications/haiti_debt_relief_2007_12.pdf.

[Prometheus Bound]

47. It would be nice, but don't hold your breath.

[lostnfound]

40. What if you do have a little money?

What should you do with it? Obviously spending it on things that would make you self-sufficient / off the grid is good. Because of family situations that isn't possible. So what else would be sensible?

[nadinbrzezinski]

42. I am not a financial advisor

personally I am looking into some money on stronger currencies.

My dad did that in Mexico, so I guess I will do this here. (Oh read Euro)

[Hannah Bell]

45. you mean you didn't invest in swine flu vaccine?

[Odin2005]

48. Thank's for posting the PM, Nadin!

:hi:

[nadinbrzezinski]

50. You welcome and if the WSJ

is right as to who are the targets of the ahem freeze... it is looking more and more like an classic austerity program.

I have gone to my penny pinching mode, which was a tad relaxed.

[bemildred]

51. Yeah, we're fucked.

People have been saying that for years, but it's here now. Nobody is going to explain or admit anything, but you can watch it happening. The real danger is that the morons in Washington are going to start some more wars to try to get out of it.

[raccoon]

52. I would rec this if it wasn't too late. nt

[raccoon]

53. You mean---you CAN'T mean other countries are telling US what to do! :sarcasm: nt

[saigon68]

54. `