The IMF vs the Federal Reserve?
Banker vs Banker.
This may get ugly.
Dominique Strauss-Kahn. Saw a picture of him sitting and looking rather miserable.
I imagine a night in a Harlem precinct is a far cry from a $3000.00 a night hotel room.
There seemed a natural kind of justice in that. A poetic justice. I am sure it will be lost on Mr. Kahn.
Oh well, he doesn't get my sympathy.
In yesterday's post I touched on the fact that DSK may have been taken down in a political power struggle over just who will be at the helm of the IMF.
The shifts in the global economic power structure seemed to prelude an end to the practice of giving the IMF’s top job to a European.
Noting the IMF had been very critical of the US. DSK had also instituted changes in the allocation of voting shares
"the IMF overhauled the way it allocates voting shares. China vaulted over nations such as Britain, Germany and France to become the third-biggest shareholder after the United States and Japan. The clout of former European powers such as Belgium was seriously curbed in favour of rising powers such as Brazil. "
I would like to expand on the issues. Issues that may have been behind DSK's takeout.
An interesting article here
The IMF under Dominique Strauss Kahn has been over the past 3 years been planning it’s own currency of reserve. Calling on a currency, called an SDR (special drawing rights) in focus the point that could be the major issue is the SDR bond that allows the IMF to issue bonds that could (and most likely would) compete with US treasuries.
The moment the SDR BOND becomes popular is the exact moment the US dollar loses it’s currency reserve status.
But alas, the guy that was pushing this through finds himself behind bars on what some say are bogus charges.
You could imagine what is at stake. The US dollar itself.
-If Dominique Strauss Kahn was able to pull this off and use the IMF to draw SDR Bonds you will see a dramatic drop in the value of the US debt. ( I do not see this as the real issue because the US is already devaluing their dollar)
- Countries and investors would be buying SDR bonds rather than US treasuries. It will effectively end the USA’s ability to print off the debt.(This is the meat and potatoes of the issue with SDR)
- Was this engineered to keep the US Dollar as the currency of reserve?Is that the reason Strauss Kahn was taken out?
If the US dollar is no longer the global currency, the reserve currency, how could the US continue on their warpath? How could the US continue to bury all other nations with indebtedness that through their economic policies, the US is deflating away?
Is this the reason as mentioned the US wanted an American at the helm of the IMF?
A quick aside: I see David Cameron is ok with an American at the helm of the IMF. He has suggested looking beyond Europe. Which would on the surface seem an odd position, but, thinking in term of banksters, it isn't.
Here is another article where the writer is making mention of the IMF's war on the US dollar-
Your will find this one quite interesting!
I've been baffled over the past couple years by calls for the IMF to play a greater role in the international economy. Unhappy with the U.S. dollar-dominated global monetary system in place today, officials in China and Russia and some economists have called for the enhanced use of the IMF's SDR as a global currency – the belief being that, backed by an impartial institution, it would be more stable than the greenback, which is governed by national policies crafted to a great degree by the Fed.
The fact that Strauss-Kahn may have tossed away his political career for a hotel maid doesn't give me much confidence in his judgment on issues regarding the life and death of the global economy. Would you rather have Strauss-Kahn or Ben Bernanke making the key decisions that impact the global monetary system? Despite his own failings, I'd put my money on Bernanke
Strauss-Kahn or Ben Bernake? A European or an American? SDR's as global currency or a continuation of the US dollar dominance of the globe?
From the Guardian
Strauss-Kahn allowed his staff earlier this year to attack the US, its main paymaster, for running a bigger budget deficit while others tried to reduce theirs.
He also changed the emphasis of the fund's lending from simply a means to impose neo-liberal capitalism on near-bankrupt victims, to a more sympathetic programme with less micro-management from Washington.
At the IMF's most recent conference in Washington, Strauss-Kahn stressed the failure of western governments to promote job creation as a means of safeguarding social democratic structures. He feared the riots in Athens would spread across Europe.
Was Strauss-Kahn biting the hand that feeds the IMF? Besides the SDR? By allowing the IMF to vocally express their disdain with the US? Job creation is an issue, but, not one that benefits the elite classes of asses. Did Strauss Kahn wish to avoid global collapse of society?
From all I have read over the past few days it is clear, quite clear to me, that DSK was taken out politically. Call it a honey pot, call it a set up, whatever?
Dominique Strauss Kahn was humiliated, worse then he had allowed the IMF to embarrass the US in their public drubbing.
He was removed from leading the IMF, an IMF that was going to use SDR's to challenge US dollar global supremacy.
He bit the hand that fed him. He crossed the Fed.
Bankers vs Bankers.
The fall out shall be interesting.