Many people forget that the IMF was nearly bankrupt in 2007. Prior to the 2008 banking collapse, they only had outstanding loans to only a handful of countries (see http://www.nzherald.co.nz/guest-columnists/news/article.cfm?a_id=146&objectid=10396025). There was a move in the late nineties for countries to pay off IMF loans early to escape crippling interest payments and draconian structural adjustment programs. Many Asian countries, badly burned in 1997, when the IMF and global currency traders virtually destroyed their economies, followed China’s example and built substantial currency reserves to protect themselves against future IMF intervention. In fact, IMF revenues fell so steeply that there were forced to liquidate reserves to cover their bills.
The European debt crisis, generate mainly by massive banking bailouts and unwillingness to raise income taxes, has breathed new life into the IMF – which has used their new-found wealth to undertake a major refurbish of their headquarters in Washington D.C. (see http://www.guardian.co.uk/business/2010/dec/19/imf-refurbish-us-headquarters).
Refusing the Offer You Can’t Refuse
Unlike Ireland, Hungary refused to accept the loan the IMF tried to force on them in July 2010 (see http://www.reuters.com/article/idUSTRE66M15620100723). In December Moody downgraded them from Baa1 to Baa3 and Fitch downgraded them from BBB+ to BBB-. As this is one notch above junk bond status, Hungary will either have to slash public services, raise taxes, or pay such punitive rates on the treasury bonds (loans from investment banks like Goldman Sachs) that finance their debt they will go bankrupt.
Ireland, in contrast had $20 billion in cash reserves, which means they didn’t really need the EU and IMF to bail them out. Nevertheless they have far more experience with capitalism and protection rackets than eastern Europeans do. Now, as Wall Street analyst Max Keiser points out, most of the $20 billion reserves will wind up in IMF pockets as interest payments http://maxkeiser.com/2010/11/28/a-bankrupt-imf-close-to-seizing-irelands-20-billion-cash-horde/).
While the Irish public is forced to accept austerity cuts totaling $20 billion over the next four years. This includes a 10 percent cut in pensions, pay cuts for public employees, a reduction in the minimum wage, as well as cuts in child welfare and public health.
This major scam has led to riots in the streets and ultimately the collapse of the Irish government. The Irish people are fully aware that two-thirds of Ireland’s current debt stems from bank bail-outs. And that the bail-out isn’t for their benefit, but to protect Ireland’s 100 billion pound loans from German and British banks.
Most of our pension reserves will wind up in IMF pockets as interest payments thanks to the incompetence of the last government . If the costant pollls are right and Fine Gail and Labour get in without the independents looking over their shoulders I fear they will not last full term and we will see another general election in 2 years and we will be no better off but without our 20 billion . If they get in then the do so because there is no other choice for the Irish people and not because of their suiotibility for high office .I again call on you all out there please vote for independent.