IMF, ad nauseum

[mondongo]

Yes....another IMF post. As reported in diariolibre.com, via DR1 News, University of Miami Professor Miachael Connolly states his opinion on IMF intervention. It is basically what some of us have been saying here on DR1 for a long time.

http://diariolibre.com/(g4etpnrhn5fjo0uk4j1dci45)/aspx/article.aspx?id=6655

Here is an excerpt from the interview:

"¿Cuál es la responsabilidad de los acreedores cuando prestan a un país que no les garantiza un retorno?

Los inversionistas asumen la ayuda externa de Rusia y cuando el país no les puede pagar, el FMI le entrega US$9,000 millones y ellos sacan su dinero. El FMI no ha rescatado a los inversionistas en el caso de Rusia ni en el caso de Argentina. Los acreedores deben correr el riesgo de no pago del país. Ellos pueden calcular cuáles son las recetas del Gobierno. Preguntarse: ¿me pueden pagar? Por desgracia, muchas veces dicen: bueno, si no pagan, seremos rescatados por el FMI.

¿Cuál es entonces el papel del FMI?

El dinero del FMI entra por una puerta y sale por la otra. El papel del FMI era hacer préstamos de corto plazo en casos de emergencia y poner condiciones. Pero en los últimos años han hecho préstamos para salvar a los inversionistas extranjeros que hicieron préstamos que sabían de antemano que no podían ser pagados. Pasó con Argentina y con Rusia. Ellos han creado un riesgo moral, porque están jugando el papel de prestamista de última instancia, que no es el suyo.

¿La intervención del FMI no produce un “salvataje” de las economías en crisis?

En algunos casos, cuando el gobierno es muy corrupto, el dinero sale directamente hacia Suiza. En otros casos, cuando el dinero se demora, sale directamente hacia Washington para pagar a los acreedores. En la mayoría de los casos el dinero sale del país. El dinero más bien produce en los gobiernos una falta de voluntad politica. Es un juego. "


BTW: yesterdays auction by the Central Bank was NOT the first time that they have issued 50%+ certificates. They have been doing this for over a month now. Furthermore, the highest interest rate they have paid is 60%.

[Porfio_Rubirosa]

Does this mean that Mongongo and I get tenure at UM also? Go Canes!

[mondongo]

Some DR1 posters will eventually have to surrender their "the IMF and international banks have no culpability" binky.

[Texas Bill]

Originally Posted by mondongo

Yes....another IMF post. As reported in diariolibre.com, via DR1 News, University of Miami Professor Miachael Connolly states his opinion on IMF intervention. It is basically what some of us have been saying here on DR1 for a long time.

http://diariolibre.com/(g4etpnrhn5fjo0uk4j1dci45)/aspx/article.aspx?id=6655

Here is an excerpt from the interview:

"¿Cuál es la responsabilidad de los acreedores cuando prestan a un país que no les garantiza un retorno?

Los inversionistas asumen la ayuda externa de Rusia y cuando el país no les puede pagar, el FMI le entrega US$9,000 millones y ellos sacan su dinero. El FMI no ha rescatado a los inversionistas en el caso de Rusia ni en el caso de Argentina. Los acreedores deben correr el riesgo de no pago del país. Ellos pueden calcular cuáles son las recetas del Gobierno. Preguntarse: ¿me pueden pagar? Por desgracia, muchas veces dicen: bueno, si no pagan, seremos rescatados por el FMI.

¿Cuál es entonces el papel del FMI?

El dinero del FMI entra por una puerta y sale por la otra. El papel del FMI era hacer préstamos de corto plazo en casos de emergencia y poner condiciones. Pero en los últimos años han hecho préstamos para salvar a los inversionistas extranjeros que hicieron préstamos que sabían de antemano que no podían ser pagados. Pasó con Argentina y con Rusia. Ellos han creado un riesgo moral, porque están jugando el papel de prestamista de última instancia, que no es el suyo.

¿La intervención del FMI no produce un “salvataje” de las economías en crisis?

En algunos casos, cuando el gobierno es muy corrupto, el dinero sale directamente hacia Suiza. En otros casos, cuando el dinero se demora, sale directamente hacia Washington para pagar a los acreedores. En la mayoría de los casos el dinero sale del país. El dinero más bien produce en los gobiernos una falta de voluntad politica. Es un juego. "


BTW: yesterdays auction by the Central Bank was NOT the first time that they have issued 50%+ certificates. They have been doing this for over a month now. Furthermore, the highest interest rate they have paid is 60%.

Mondongo

Your post would be very interesting if I could read Spanish. How about doing all us expats who don't the favor of a translation? It surely would be helpful.
Before you castigate me for living here and not speaking the language, bear in mind that I'm 77 and the ole brain just isn't as absorbant as it was when I was 18-30.
I appreciate your posting, but by the time I get through stumbling through it, Codetel has kicked me off the system yet again.

Texas Bill

[PICHARDO]

OK this may make not sense after I translate it but for all it's woth here it goes:





"¿Which it is the responsibility of the creditors when they lend to a country that doesn't offer a return guarantee?

The investors assumed the external aid of Russia and when the country couldn't pay them, the IMF delivers US$9,000.000.00 and they recap their money. The IMF has not rescued the investors in the case of Russia neither in the case of Argentina. The creditors should run the risk of non payment from the country. They can calculate which are the (economy) prescriptions of the Government. To be asked: ¿can they pay me? Unfortunately, many times they answer: good, if not, we will be rescued by the IMF.
Which is then the role of the IMF?

The money of the IMF enters from one door and leaves by the other. The role of the IMF was to make loans of short term limits in cases of emergency and to put conditions. But in recent years they have done loans to save the foreign investors that made loans that they knew beforehand could not be paid. It happened with Argentina and Russia. They have created a moral risk, because they're playing the role of lender of last instance, that is not their function.

The intervention of the IMF does not produce a “salvage” of the economies in crisis?

In some cases, when the government is very corrupt, the money leaves directly toward Switzerland. In other cases, when the money delays, it leaves directly toward Washington to pay to the creditors. In most cases the money leaves the country. The money more than usual produce in the governments a lack of political will. Is a game. "



I hope you can get an idea of what this guy was talking about, because to me it seemed to contradict himself in two points as he explained the inner workings of so called lenders and the activities of the IMF.

[PICHARDO]

This turns out to be a load of fresh mixed with some old manure, the IMF doesn't bail out investors for the sake of saving them from total ruin but in fact bails out the country's economy before it collapses entirely, in which case the IMF and several other countries economic interests could be affected immensely.

Take Argentina as an example, when the IMF refused to bail out the collapsing Argentian economy every investor and lender saw their loan's interests and even the capital go up in smoke, the Gov. couldn't provide for all loans and capital interests at all, in turn you had an economy stalled to a grinding halt bringing the sources of income plummeting down just as a house of cards blown away in seconds, the hole porpoise of capital gain it's to keep the earnings coming on a timely manner for the planned amount of time, otherwise how can you pay dividends to all your stock holders and expect those same holders to keep their liquids in your investment fund to achieve the maximum R.O.I and capital gain that were the intended goals in the first place, lenders want to squeeze every penny possible from your pocket not ruin you so you can't repay the loan and in turn they lose capital gain on the interests, simple math tells you this.

The IMF was set to provide countries with a viable influx of funds for direct upgrades on the infrastructures which in turn could spell a foment in the industrial development of such country, resulting in the re-investment of such funds to help a maximize those developing industries into the world market to achieve more bang for the buck for international trading and investors, in black and white.

Since most underdeveloped countries suffer from acute rampant corruption the funds provided by the IMF find their way into the pockets of these "circle of corrupts" yet some of it does end up at their targeted goals and do in fact keep giving these "failing economies" a wing and a prayer to hold on a few more miles before they inevitably crash and burn themselves up in flames.

"Don't shoot the messenger but the reason behind the bad news"

[Texas Bill]

Originally Posted by PICHARDO

This turns out to be a load of fresh mixed with some old manure, the IMF doesn't bail out investors for the sake of saving them from total ruin but in fact bails out the country's economy before it collapses entirely, in which case the IMF and several other countries economic interests could be affected immensely.

Take Argentina as an example, when the IMF refused to bail out the collapsing Argentian economy every investor and lender saw their loan's interests and even the capital go up in smoke, the Gov. couldn't provide for all loans and capital interests at all, in turn you had an economy stalled to a grinding halt bringing the sources of income plummeting down just as a house of cards blown away in seconds, the hole porpoise of capital gain it's to keep the earnings coming on a timely manner for the planned amount of time, otherwise how can you pay dividends to all your stock holders and expect those same holders to keep their liquids in your investment fund to achieve the maximum R.O.I and capital gain that were the intended goals in the first place, lenders want to squeeze every penny possible from your pocket not ruin you so you can't repay the loan and in turn they lose capital gain on the interests, simple math tells you this.

The IMF was set to provide countries with a viable influx of funds for direct upgrades on the infrastructures which in turn could spell a foment in the industrial development of such country, resulting in the re-investment of such funds to help a maximize those developing industries into the world market to achieve more bang for the buck for international trading and investors, in black and white.

Since most underdeveloped countries suffer from acute rampant corruption the funds provided by the IMF find their way into the pockets of these "circle of corrupts" yet some of it does end up at their targeted goals and do in fact keep giving these "failing economies" a wing and a prayer to hold on a few more miles before they inevitably crash and burn themselves up in flames.

"Don't shoot the messenger but the reason behind the bad news"

Pichardo;

You have explained very succinctly the oroginal purpose of the IMF and it's evolution in recent times. I have, on a couple occasions tried to do what you have done, but somehow couldn't get through to the intended recipients of the post.

Thank you for your very enlightening post. Maybe some posters will now look behind the headlines and start placing the blame in the correct place instead of a lot of inuendo about the foreign lending organizations.

Texas Bill

[Porfio_Rubirosa]

1. If you were an investment bank, would you have lent money to Hippo (without collateral) if the IMF did not exist?

2. Did the IMF and World Bank do Argentina a favor by not "bailing it out"? Was an even larger collapse caused by the fact that the IMF and World Bank had bailed out Argentina so many times before?

3. Will a large sum of the IMF's money be used by Hippo to try to buy reelection?

4. Will the rest go to Miami and Switzerland?

5. In the series of "bail outs" of the DR to come, will the IMF and World Bank demand that more and more of the DR's assets be sold to US and European investors?

If you answered these questions honestly, then you could not have failed to have seen the inescapable truth about the IMF.

Originally Posted by Texas Bill

...Maybe some posters will now look behind the headlines and start placing the blame in the correct place instead of a lot of inuendo about the foreign lending organizations.
Texas Bill

Jeez I'm sick of the blame game. I was going to write a metaphor about shared responsibility, but Texas and company would just write back that it's ALL the fault of the incredibly economically marginalized Dominicans and other poor nationalities who should stand up and fight their corrupt governments. What Texas and others don't dispute is that those corrupt governments are, through the IMF and other multilateral lenders, essentially backed by the full faith and credit of the New World Order.

Hey, Texas, you forgot to add the part about how anybody who disagrees with you must be a Casto-loving communist. You're slipping!

[Texas Bill]

I'd answer you, but we would end up "OFF THREAD" again and I promised Robert I wouldn'd do that or be the cause.

Thanks, but no thanks.

Texas Bill

[Porfio_Rubirosa]

Off topic? The topic is the IMF!

Oh, the part about you and others demeaning anyone who disagrees with you. Yea, you're right. That's off topic.

Someone really must try to explain how a quasi-governmental organization like the IMF can meddle in another country's affairs and then not be even partially responsible for the intended and unintended consequences of that meddling.