Economics

Global paper tsunami planned by IMF

You might remember a post, a month or two back, about the Davos plan to flood the world with $100 trillion dollars of new fiat paper currency, in a global quantitative easing plan. This would keep the 1971 experiment of a pure global fiat currency scheme going for a few more years and replace all of the real Austrian productive capital which has been consumed in the last 40 years (e.g. tangible machines which make things), with even more paper Keynesian ‘capital’ (i.e. bits of fancy paper, or their electronic equivalent) to drown us all in; or, in the words of Del-Boy Trotter, we’re all going to be millionaires.

Jim Rickards thinks he has detected the IMF plan to put this Davos proposal into action. He discusses this discovery in a 22-minute interview with Eric King, as below. With many other interesting topics under debate, the discussion on Davos and its subterranean link to the IMF begins at 5:35 on the clock:

Here is that IMF plan, in PDF form:

[You will also notice that it is dated January 7th, 2011, which is several weeks before the Davos announcement.]

As you might imagine, the IMF web site is hardly user-friendly when it comes to revealing such potentially devastating informational nuggets, only matched in its obfuscation and denseness by the Bank of England’s web site; however, with some karate-style googling technique, I eventually managed to ensnare the needle in the haystack.

Here is the key IMF quote, from that paper:

“An annual allocation of the equivalent of US$200 billion dollars would raise SDRs as a proportion of reserves to a little over 13 percent in the early 2020s.”

If you use fractional reserve banking at a 10% ratio to leverage this by ten, then this becomes $2 trillion pumped into the global economy each year, until 2025, giving us $28 trillion equivalent-dollars of extra fiat ‘liquidity’.

I think we can apply the Duncan’s First Law of Government to that — by which you take any publicly-released government number and multiply it by three or divide it by three, whichever presents a worse public relations figure, to produce the true number, as originally calculated by whichever dissembling civil servant first wrote the report.

When we apply Duncan’s First Law of Government, the real release of SDRs will be the equivalent of $600 billion dollars a year, leveraged up to $6 trillion each year, which gives us $84 trillion equivalent-dollars of extra ‘liquidity’, by 2025, which is a figure remarkably similar to the $100 trillion dollars of extra liquidity, as proposed at Davos.

With the IMF able to switch currencies around inside their SDR currency unit — for instance by dialling down the dollar component and replacing it with Chinese yuan — then welcome to the world’s new global fiat currency, born on a wave of enormous quantitative easing, courtesy of shadowy unelected bureaucrats being paid tax-free salaries and handsome pensions, paid from your pocket, and ensconced in luxurious office palaces all over the world.  They are, after all, only thinking of you and your interests, rather than putting themselves and their friends first.

Once the cuckoo of the SDR has pushed the dollar out of the world-reserve-currency nest, the IMF can then roll out their even grander strategic plan of introducing the Bancor, as first proposed by their hero, Lord Keynes, as discussed in one of their papers from last April:

Here’s a sample quote from that report (my emphasis):

“A limitation of the SDR as discussed previously is that it is not a currency. Both the SDR and SDR-denominated instruments need to be converted eventually to a national currency for most payments or interventions in foreign exchange markets, which adds to cumbersome use in transactions. And though an SDR-based system would move away from a dominant national currency, the SDR’s value remains heavily linked to the conditions and performance of the major component countries. A more ambitious reform option would be to build on the previous ideas and develop, over time, a global currency. Called, for example, bancor in honor of Keynes, such a currency could be used as a medium of exchange—an “outside money” in contrast to the SDR which remains an “inside money”.”

We truly are alive in a world of Golgafrincham money cranks, who think there is not a disease on Earth which cannot be cured by the application of ever-more endless sheets of worthless paper, printed up with ever-more inky zeroes.

Have you bought any gold, silver, or oil, this month?  Do you think you should?

4 comments to Global paper tsunami planned by IMF

  • Why is the conclusion to this EXCELLENT article how to invest our personal savings, when it’s all about controlling the world and its resources with SDRs?

    In my analysis, the VALUE of paper, dollars, SDRs or any other fiat money does not matter. For it is used to devalue everything REAL – by those who have the monopoly and privilege to print that thing called “credit” and who have the gaul to charge “interest” for it…

    Shouldn’t we spend any money we may have at pointing this Golgafrincham scam out to as many people as possibly possible?

    Just a thought triggered by yours!

    Sabine
    National Co-ordinator, Forum for Stable Currencies
    http://bit.ly/9cxxIs

  • Andy Duncan Andy Duncan

    Hi Sabine,

    If you would like to write an article for us at the Cobden Centre, expanding your thoughts, as presented above, then please let us know via the Contact page, and we will do what we can to publish it.

    “Why is the conclusion to this EXCELLENT article how to invest our personal savings, when it’s all about controlling the world and its resources with SDRs?”

    I was recently accused on Mises.org of being “Bombastic, Superfluous, and Overinflated”, which I thought was a little harsh, but I could see their point. Unfortunately, I’m afraid that’s just the way I am, and you’ll just have to give me a little leeway. I’m doing what I can with the resources at my disposal to point out this gigantic money printing scam. I think adding on a few nanobits of information, to prod people into protecting themselves from these lunatics, isn’t a hanging offence. If I can help just one person avoid getting wiped out by this money printing, then I feel it will have been worth it.

    Rgds,
    AndyD

  • chef

    I don’t mean to be a pedant, but fiat isn’t a synonym for paper, it means “by decree”, so even a Gold Standard would be fiat if it was backed up by legal tender laws. (And no, the post Bretton Woods system still isn’t an “experiment”, but I suspect your readers are sensible enough to filter out this piece of propaganda)

    I exepct Andy will think of me a Rothschild-loving corporate shill for saying this, but a global currency would have it’s advantages. The most obvious being the removal of hordes of superflous middle men and speculators that currently profit unnecessarily from transactions, making $billions in the process for both themselves and their backers (i.e Soros) It would also introduce an element of certainty for businesses that trade across borders, at the moment they risk having their profits wiped out due to fluctuations in the FOREX markets. Who knows, it could be a exciting new step in economic globalisation that cut costs, removed regulation and introduced greater clarity for the average consumer, it would also prevent countries such as China from competing unfairly with currency manipulation (I don’t see this as a big deal but many do, not sure what the Austrian take is though)so their workers received a fairer deal.

    Obviously I agree that reckless money printing isn’t a solution, but my concern is that ideologues such as Duncan are adding to the general air of confusion and preventing the public from understanding what went wrong with the economy and why. Without this knowledge a workable solution will never be achieved.

  • Mark

    Chef

    I see where you are coming from, may I say many are moving into precious metals by choice away from fiat. This seems to me a natural reaction for said fiat holders which is likely to continue. People have a choice as to what they will trust, at some point I believe more shall come to reject fiat.