Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Strauss-Kahn, IMF Scam Fails, the Debt Crisis Crescendo

Politics / Global Debt Crisis May 15, 2011 - 12:35 PM GMT

By: Andrew_McKillop

Politics

Best Financial Markets Analysis ArticleWhen Dominique Strauss-Kahn, then director of the IMF, fled his Manhattan hotel room in a vain attempt to take an Air France plane to Europe, Roman Polanski style, he inexplicably left his cellphone in the room where he had alledley attempted to rape a hotel maid. The cellphone was of course loaded with a list of very interesting names and numbers, pored over by New York police and Federal US officials.


Why was Stauss-Kahn in New York ? He went there instead of flying direct from Washington to Berlin, first stop on a European tour and first meeting set with chancellor Merkel of Germany. To reassure Merkel that the next bailout of Greece would cost little to German finances, that the euro would stay strong and credible because the US dollar was now close to terminal meltdown - and was receiving special treatment from the IMF.

The special treatment was designed in ultra-secret conditions with the US Federal Reserve, led by the Federal Reserve Bank of New York, the foremost link in the Fed's debt and deficit recyling program, in place since 2005-2006. The program is described, in coded messages, by many Fed Bank of NY publications, vaunting its role in recycling gray and off-white capital flows from non-OECD countries. In premier place, these include the Arab oil exporter and small island tax haven countries, but the Fed's activities in propping the dollar and diluting US overseas debt are also linked with and rivalled by Russian, Chinese and Indian capital laundering banks and institutions. 

THE DEBT CRISIS CRESCENDO
Strauss-Kahn had played a kingpin role is reassuring capital markets, debt-strapped governments and opinion formers by operating a global-size version of what started in the USA with the Paulson plan in the dying days of the G W Bush presidency, late 2008.

This was a losing quest, but Strauss-Kahn's failure was only known to insiders - and his enemies. The scope of the challenge resumes in a few figures.

After a declining trend in the 1990s, US national debt dramatically increased from US$ 5.7 trillion in January 2001 to $10.7 trillion at the end of 2008, and then $14.3 trillion through April of 2011 when the debt reached 98 percent of 2010 GDP of the USA.

The approximately US$ 3.6 trillion added to US national debt since the end of 2008 is more than double the market value of all private sector manufacturing in 2009 ($1.56 trillion), more than three times the market value of spending on professional, scientific, and technical services in 2009 ($1.07 trillion), and nearly five times the amount spent on non-durable goods in 2009 ($722 billion). Only taking interest paid on Federal debt in the first six months of the present financial year (October 2010-April 2011), nearly $245 billion, this is equal to more than 40 percent of the total market value of all private sector construction spending in 2009 ($578 billion).

Compared with the bugaboo of olden times - the price of oil - the world's biggest oil importer country faces a debt crisis that is out of control. The US ran an oil trade deficit in March 2011 estimated by the Commerce Dept. on the basis of gross oil imports - before re-exports of higher value refined products - of 333,831,058 barrels in March at a month-average barrel price of $ 93.67, giving a gross deficit before re-exports of $ 31.3 billion for the month. Taking only interest paid on US Fed debt as approximately $ 490 billion-per-year in 2011, almost certainly set to rise, this comfortably covers 1.5 times the total gross cost of all US oil imports at a record-high average price of $ 93.67 per barrel.

Taking the growth of debt since December 2008, about $ 3600 billion, this amount would cover almost exactly 10 years of gross total oil import costs for the US at current volumes and current record high oil prices. While recycling petrodollar capital surpluses is a key need for the US Fed, with the Fed Bank of NY in the lead role, and the siphoning of illegal capital exports from the world 20-leading tax haven small island states is also useful, total amounts cannot match the USA's runaway debt growth.

THE STRAUSS-KAHN PLAN
Right through his tenure as IMF chief, Strauss-Kahn not only trawled the comfort ladies, but also worked hard to ramrod the ultimate in shock treatment for the global economy: the selective demonetization of the US dollar, the world's prime reserve currency. The basic plan is simple: cancel and dishonor debts in US dollars through reducing or completely stopping dollar convertibility, for example by limiting the use and the holding of the US dollar to US citizens, only. Another version is to create and launch a new reserve currency, linked with the dollar, at a very favourable double conversion rate for the dollar: debts in dollars will be depreciated; holdings in dollars by US citizens and US-favoured corporations will be appreciated, when the new money is introduced. The inflation which comes with this will help mask the depreciation of debt and appreciation of holdings. Within six months, a fait accompli will be created, with no way back.

From December 2009, Strauss-Kahn went public with his new money initiatives, under the imprimatur of the IMF, with the Green Energy Fund proposal to fight climate change in low income countries with a fund built from the IMF's own printable money - SDRs - starting at the equivalent of $ 100 billion. Other versions of this plan by Strauss-Kahn and his personal team were advanced, at growing scales and declining credibility, through March-April 2010, but were each time shot down by capital surplus countries led by China and including the Arab petro states, Russia, India, Brazil and Argentina.

Each time, the Straus-Kahn target was to exchange US dollars for new money, and dissolve US debt in new and printable fiat paper money. recycling wealth from the few capital surplus countries to the OECD debtor countries, headed by the US but including all EU27 states and Japan.

From mid-year 2010 the European PIIGS crisis only got worse, as US debt also worsened, forcing Strauss-Kahn to shelve public airing of his pipedreams and concentrate on saving both the euro and the dollar. The role of recycling and siphoning capital surpluses from smaller players with big holdings, starting with the Arab petro states and small island tax haven states, became more important than ever, as remarks by Strauss-Kahn and variable geometry allies and friends like George Soros, at the 2011 Davos Forum suggested to observers able to cut through the counter-noise. Likewise the role of SDR allocations and plans for radically increasing the production or issuance of SDRs most surely placed Strauss-Kahn in private conflict with very big players, starting with the US and China.

The latest plan was almost ready for launch, 14 May. Federal officials invited Strauss-Kahn to New York, arranged the hotel and travel, and set the agenda for a final review before going public on Strauss-Kahn's last plan to roll US debt into European debt, in which the Federal Reserve, and all its State banks, as well as European central banks would disappear. We know what happened, next.

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2011 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Paul
16 May 11, 17:36
a little peek

I can't help but feel that we have been granted a very small peek into the true nature of modern post-Nation/State geo-political warfare.


Olympia
01 Feb 12, 04:57
Global Debt Crisis Fraud

Global Debt Crisis

The greatest private fraud of human history.

Who are the great fraudsters who are becoming the murderers of the human kind? How does the economy "illness" threaten Democracy and the freedom of people?

http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html

---------------------------------

By knowing what happened in indebted Greece, where loan sharks created “bubbles” and the current inhuman debt, one can understand the inhuman plan in total ...understand where this plan started just to bring all states at the same end ...understand how this type of plans are established...

Authored by PANAGIOTIS TRAIANOU


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules