When Monday’s Eurogroup meeting concluded without an agreement between Greece and its creditors, it should have been game over for Athens. With pensioners at their breaking point and with local governments reluctant to comply with a decree mandating a sweep of excess cash reserves, the idea that Greece would somehow be able to scrape together €750 million euros to make a scheduled payment to the IMF today seemed far-fetched at best which is why we asked the following question Monday afternoon:
Where, if not from local governments who have been extremely reluctant to comply with Athens’ cash sweep decree, and if not from the IMF which will apparently not be paying itself tomorrow after all, is Greece going to get three quarters of a billion euros in the next 12 hours?
We now know the answer to that question. As Bloomberg reports, citing Kathimerini, Greece tapped IMF reserves to pay .. well, to pay the IMF:
Greece used up ~EU650m reserves from its SDR IMF holdings account to meet loan payment of ~EU750m due to Fund today, Kathimerini newspaper reports, without citing anyone.
Reserves kept in IMF holdings account need to be replenished within one month
IMF agreed over weekend for their use, given Greece’s liquidity situation; without use of those reserves, payment due today wouldn’t be possible.
Reuters has a bit more color:
Greece tapped emergency reserves in its holding account at the International Monetary Fund to make a crucial 750 million euro (539 million pounds) debt payment to the Fund on Monday, two government officials said on Tuesday.
With Athens close to running out of cash and a deal with its international creditors still elusive, there had been doubts whether the leftist-led government would pay the IMF or opt to save cash to pay salaries and pensions later this month.
Member countries of the IMF have two accounts at the fund – one where their annual quotas are deposited and a holding account which may be used for emergencies.
One official told Reuters that Athens used about 650 million euros from the holding account to make the payment.
“We made use of money in our holding account in the fund,” the official said, declining to be named. “The government also used about 100 million of its cash reserves.”
This explains why Yanis Varoufakis was so confident that the payment would be made and also why the language around the payment confirmation was so bizarre (recall that the heading was “Greece said to have given order for IMF repayment“). It also underscores the degree to which this entire ordeal has now careened into sheer absurdity because disbursing bailout funds that you know will immediately be sent right back where they came from in the form of an interest payment is one thing, but literally paying yourself is another, and the IMF seems to have done the latter on Monday.
Given this, it’s certainly not surprising that Christine Lagarde and company are not thrilled about the prospect of participating further in what has become an outright farce and as El Mundo reports, the fund has now told the ECB and the European Commission that it does not wish to be a part of a new program for Greece.
Via El Mundo (Google translated):
The International Monetary Fund (IMF) has shown the Eurogroup their desire not to be part of a possible third bailout of Greece, which would amount to 50,000 million and would be vital for the survival of the Hellenic country. The absence of really emotional action by the executive with whom Tsipras contain spending and tackle the deficit, as well as the challenges it has done in recent weeks, as the readmission of public employees has caused the agency wants let all the weight of aid to Greece in the hands of the Eurozone and the ECB.
The fact that the IMF wants to stop being part of the bailout of a country is particularly serious, not in vain this institution is always the last resort of economies whose situation is more complicated. Therefore, the IMF has priority over other creditors in the order for recovery and, in all history, only Zimbabwe, Somalia and Sudan have failed to fulfill their obligations to it. However, given the difficulties to unlock a new rescue aid tranche that matures on June 30, the Washington-based organization fears that Greece will become the first economy in a developed nation it incurs a default, as They have confirmed to THE WORLD sources familiar with the process.
For Germany (where lawmakers are already pressuring Angela Merkel to cut the Greeks loose) this may be the final straw.
- SCHAEUBLE SAYS IMF MUST STAY INVOLVED IN GREECE AID PROGRAM
Greece is now reliant on a similarly ridiculous circular funding scheme to pay public sector employees whereby pensioners will only receive payments if the government is successful at tapping pension funds for cash.
Greece may be able to meet end-May salaries and pensions payments, if pension funds, municipalities commit more of their cash reserves.
And because all of the above isn’t preposterous enough, Greece will depend on the disbursment of the €7.2 billion left in its current program (about half of which is set to come from the IMF) to replenish the funds it raided from its SDR holdings:
Greece assumes that an agreement will be reached by end-May for disbursement of bailout funds, so that it can replenish holdings account reserves.
In sum: the IMF paid itself on behalf of Greece and will now be forced to pay itself back for paying itself later this month.Or, put differently, Greece has prepaid the IMF with IMF money it doesnt have.
Meanwhile, Greek pensioners are set to adopt a similarly ridiculous self-payment scheme in a matter of weeks even if they don’t entirely appreciate the sheer insanity that’s taken hold in Athens.
And just to prove how dire the situation now is, Market News just reported the following shocker:
- GREECE CASH RESERVES STAND AT APPROXIMATELY EUR 90 MILLION – EUROSYSTEM SOURCES
The Greek endgame is now upon us. Time for drachmas.
And the 6 banknotes (designed by Paul Vatikioti) of 50, 100, 200, 500, 1000 and 10,000 drachmas have pictures of Cornelius Castoriadis, Odysseus Elytis, Yiannis Moralis, Georgios Papanikolaou, Melina Mercouri and Maria Callas…
The article below is an excellent summary of modern central banking and it’s involvement with economic wars. It leaves out some very important facts about its origins, which go back to Hjalmar Schacht, President of the Reichsbank and Minister of Economics under Adolph Hitler. The BIS was used to handle all the gold and assets stolen from pillaged countries, but I digress.
After World War II, the BIS turned its focus to the defense and implementation of the World Bank’s Bretton Woods System. Between the 1970s and 1980s, the BIS monitored cross-border capital flows in the wake of the oil and debt crises, which in turn led to the development of regulatory supervision of internationally active banks. More recently, it has concentrated its efforts on the global financial stability and capital reserve requirement accords. The BIS has also emerged as an emergency “funder” to nations in trouble, coming to the aid of countries such as Mexico and Brazil during their debt crises in 1982 and 1998, respectively. In cases like these, where the International Monetary Fund is already in the country, emergency funding is provided through the IMF structured program.The BIS has also functioned as trustee and agent. For example, from 1979 to 1994, the BIS was the agent for the European Monetary System, which is the administration that paved the way for a single European currency. Today, the BIS has become the central bank of central banks. The Bank now represents the interests of nearly all of the world’s central bank institutions, and manages a significant share of their reserves, including gold holdings. The organization now serves and presides over 60 central banks worldwide. Accordingly the BIS requires the capital/asset ratio of central banks to be above a prescribed minimum international standard, for the protection of all central banks involved.
- Promoting discussion and facilitating collaboration among central banks.
- Supporting dialogue with other authorities that are responsible for promoting financial stability.
- Conducting research on policy issues confronting central banks and financial supervisory authorities.
- Acting as a prime counterparty for central banks in their financial transactions.
- Serving as an agent or trustee in connection with international financial operations.
Under the terms of the founding treaty, the bank’s assets could never be seized, even in times of war. Most felicitous of all, the BIS was self-financing and would be in perpetuity. Its clients were its own founders and shareholders, the central banks. The BIS, boasted Gates McGarrah, an American banker who served as its first president, was “completely removed from any government or political control.” McKittrick’s involvement with the BIS began in 1931, when he joined the German Credits Arbitration Committee, which adjudicated disputes involving German commercial banks. One of the other two members was Marcus Wallenberg, of Sweden’s Enskilda Bank, who taught McKittrick about the intricacies of international finance. Marcus and his brother Jacob were two of the most powerful bankers in the world. During the war, the Wallenberg brothers used Enskilda Bank to play both sides and harvest enormous profits.In May 1939 McKittrick was offered the position of president of the BIS, which he readily accepted. As head of the BIS, headquartered in Basel, from 1940 to 1946, McKittrick played a crucial role in abetting Hitler’s war—and, at the same time, in revealing details about his Nazi colleagues to his friends in Washington, D.C. On McKittrick’s watch, the BIS willingly accepted looted Nazi gold, carried out foreign exchange deals for the Reichsbank, and recognized the Nazi invasion and annexation of conquered countries. By doing so, it also legitimized the role of the national banks in the occupied countries in appropriating Jewish-owned assets. Indeed, the BIS was so indispensable to the overall Nazi project that the vice-president of the Reichsbank, Emil Puhl, who was later tried for war crimes, once referred to the BIS as the Reichsbank’s only “foreign branch.” In the closing months of the war, as American GIs fought their way across Europe, McKittrick was arranging deals with Nazi industrialists to guarantee their profits after the Allied victory.
As a result of Nazi collaboration allegations, at the Bretton Woods Conference held in July 1944, Norway proposed the “liquidation of the Bank for International Settlements at the earliest possible moment”. This resulted in the BIS being the subject of a disagreement between the American and British delegations. The liquidation of the bank was supported by other European delegates, as well as the United States (including Harry Dexter White, Secretary of the Treasury, and Henry Morgenthau), but opposed by John Maynard Keynes, head of the British delegation. Fearing that the BIS would be dissolved by President Franklin Delano Roosevelt, Keynes went to Morgenthau hoping to prevent the dissolution, or have it postponed, but the next day the dissolution of the BIS was approved. However, the liquidation of the bank was never actually undertaken. In April 1945, the new U.S. president Harry S. Truman and the British government suspended the dissolution, and the decision to liquidate the BIS was officially reversed in 1948.
“The Power of financial capitalism had a far reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalistic fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks, which were themselves private corporations. Each central bank sought to dominate its government by its ability to control treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence co-operative politicians by subsequent rewards in the business world.”
“The temptation to postpone adjustment can prove irresistible, especially when times are good and financial booms sprinkle the fairy dust of illusory riches. The consequence is a growth model that relies too much on debt, both private and public, and which over time sows the seeds of its own demise. To return to sustainable and balanced growth, policies need to go beyond their traditional focus on the business cycle and take a longer-term perspective – one in which the financial cycle takes centre stage…They need to address head-on the structural deficiencies and resource misallocations masked by strong financial booms and revealed only in the subsequent busts. The only source of lasting prosperity is a stronger supply side. It is essential to move away from debt as the main engine of growth.”
We were astounded to learn that the board of the BIS is comprised of none other than the heads of the major central banks of the developed world! Yes – Yellen, Draghi, et al! So, these central bankers are simultaneously failing to tell their respective governments that (1) monetary policy has done enough; (2) monetary policy is causing massive risks and distortions; and (3) political leaders must grab the reins and make structural changes, these same central bankers are authorizing BIS reports that will enable them to say, after the coming multifactor crisis, that they told us about the risks.
We wonder who from the Fed authorized the report, and why they haven’t shared these harsh views of Fed policy in the FOMC meeting minutes or the endless public speeches by Fed officials. It is duplicitous for the Fed to authorize the views in the BIS report yet keep quiet about them elsewhere. But then, the Fed has never accepted much responsibility for the 2008 crisis, despite its decisions to keep interest rates artificially low for an extended period of time, to do a poor job of regulating the banking system and to abet Fannie and Freddie in their utter irresponsibility. History rhymes. The Fed has created the fuel for another crisis, seems to know it judging by the BIS report, and yet is covering itself with an “I told you so” report from the BIS rather than changing course.
The Globalists are indeed on the move……………
Hmm. So far the IMF has failed with Chavez, Morales, and Castro. Need more help?
The CIA took out the democratically elected leader of Iran and replaced him with a tyrant – the shaw http://www.iranchamber.com/history/coup53/coup53p1.php
The CIA took out Torrijos in Panama and put in Noriega until he became a liability.http://www.wattpad.com/1240590-cia-hit-list-omar-torrijos-supreme-chief-of-panama?p=1
The CIA setup Osama Bin Laden, Saddam Hussein, traded weapons with Iran with money from the cocaine trade in Latin America (Iran Contra)
And many more…
The Assassination of Nestor Kirchner by the IMF
Wednesday, 05 January 2011 01:08
Kirchner became the President of Argentina in 2002. He stood up to the IMF and refused to impose austerity measures on his people in order to repay the IMF. Because of the effectiveness of his non-austere economic policies, last month, Argentina finished paying off the last of the debt.
Kirchner told Oliver Stone the bankers threatened constantly (“siempre”) to kill him.
People in Spain, Greece, and Ireland were calling on their governments to follow Kirchner’s lead, and reject “austerity”. There is every reason to think that the IMF bankers also threatened to murder the Prime Ministers of these countries, all off whom knuckled under to the IMF in the days after Kirchner’s sudden and unexpected death from a “heart attack”.
Did the IMF finally follow through on their threats to murder Kirchner, in order to give credence to their threats against the Euro-peons? There is every reason to think so.
… shows Kirchner describing the threats as constant (“siempre”)
… shows European populists calling on the people to support following Kirchner’s example
… shows the head of the CIA, William Colby, describing a CIA pistol that shoots an ice-dart that leaves the target dead from heart attack, with “no evidence to indicate that the target was hit.”
You can be sure that Carlos Slim is heavily invested in PEMEX bonds which essentially is privatizing without public support
Pemex Oil Output Declines at Fastest Rate Since World War II
Jan. 20 (Bloomberg) — Petroleos Mexicanos, Mexico’s state
oil company, will probably report its fastest drop in production
since 1942, eroding revenue as plunging crude prices limit the
amount of cash available to drill for new reserves.
Pemex last year likely extracted 2.8 million barrels a day,
down about 9 percent from the 3.08 million a day pumped in 2007,
representing a total of $20 billion in lost sales, according to
data compiled by the government and Bloomberg. The Mexico City-
based company, which had revenue of $104 billion in 2007, plans
to report annual production figures tomorrow.
in oil prices and lower production is going to make expensive
exploration projects less attractive now.”
Pemex’s “biggest problems have yet to come,” said
Alejandro Schtulmann, head of research at Empra, a political-
risk consulting firm in Mexico City, in an interview. “The fall
in oil prices and lower production is going to make expensive
exploration projects less attractive now.”