Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21
Bitcoin Halvings Price Forecast and Stock to Flow Analysis - 18th Jul 21
Dell S3220DGF Unboxing and Stand Assembly - 32 Inch 165hz Curved Gaming Monitor Amazon Discount - 18th Jul 21
What Does The Fed Mean By “Transitory Inflation” And Why Is It Important To Understand? - 18th Jul 21
Will the US stock market’s worsening breadth matter? - 18th Jul 21
Bitcoin Halving's Price Projection Forecasts Trend Trajectory - 18th Jul 21
Dell S3220DGF Price CRASH to £305! 32 Inch 165hz Curved Gaming Monitor Amazon Bargain - 16th Jul 21
Google, Amazon and Netflix are Scrambling For This Rare Gas - 16th Jul 21
Sheffield Millhouses Park New Children's Play Area July 2021 Vs Old Play Area - Better or Worse? - 16th Jul 21
Inflation Soars, Powell Remains Unmoved. What about Gold? - 16th Jul 21
Goldrunner: Gold Could Jump To $1,900-$2,100 In Next 30 days – Here’s Why - 15th Jul 21
Tips For Finding The Right Influencers - 15th Jul 21
ECB Changed Monetary Strategy. Will It Alter Gold’s Course? - 15th Jul 21
NASA And Big Tech Are Facing Off Over This Rare Gas - 15th Jul 21
Will the U.S. Dollar Lose Momentum In the Second Half of 2021? - 15th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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