China Offers $43 Billions To IMF War Chest

[ahfatzia]

China on Monday offered $43 billion to the IMF's crisis-fighting reserves, rounding off a global push to nearly double the Fund's war chest to $456 billion to help protect countries from fallout from the euro zone debt crisis.

China rounds off push for bigger IMF war chest | Reuters


India, Russia, Brazil and Mexico offers $10b each plus many smaller donations from various countries to make up a war chest of $456b for IMF to combat Euro Zone debt crisis.

 

[Killuminati]

Dont understand why Countries helping that bloodsucking IMF.

 

[ahfatzia]

Dont understand why Countries helping that bloodsucking IMF.

These are actually no(low) interest loans to the IMF.

Incidentally the IMF, along with the World Bank, have been the tools for the US and Europe for decades to put choke holds on third world nations by lending them low interest money but bind them many strict clauses. Now the tide has turned, these new lender nations must demand the same from those big Euro spenders and the more money you contribute the more political capital you're going to get.

 

[anonymousposter]

IMF exists, because it benefits lenders. imagine country A cant pay back China. Now country A says, "we have no money to give you sorry!". but countries are not like people. A predatory lender can send out the yakuza to break some knee caps and take the tv and jewelry, but China cant send out the People's Liberation Army to collect debts.

Essentially, China lends money to debtors so they can pay back the original debts country A accrued. But like above poster noted, now the Chinese can start making demands on how Country A runs its treasury.

So you might think, well then IMF f@cking sucks, let's just getmrid of it. But what if country A goes bankrupt? Angry China might rattle her sabres, but economically destitute country A might also think war is the "only way". and often when country A goes bankrupt, country B also goes bankrupt. Because country B might do a lot of business with country A and country B's lender's also wont get their money back and merchants who used to sell stuff ti country A is also going bankrupt, because there is no more market in country A. Now country C might go bankrupt too, because country B went bankrupt and D, E, F, and G are all lined up to go bankrupt too for the same reason.

Then the chairman of the politburo in China wakes up one morning and read the headlines of Xinhua and it reads, "China also bankrupt". he is saying, how the f@ck are WE bankrupt??!! then his finance minister looks all disheveled and on verge of tears and say, "the currencies of countries A B C D E F and G are all worthless and all those mofos who we lent money to wont pay us back!m and they say they wont even buy any more Made in China toys, electronics, apparels, because they have no money."

Now everybody is sitting around sh177ing in their pants thinking, "why o why did we get rid of the IMF?". and these countries start waging wars with each other, because heck... they got nothing to lose but their lives. they are all angry and blaming each other and need to kill people to feel better about themselves.

The IMF is not the problem. it is the natural product of a system that has big problems.

 

[peaceful]

The IMF is not the problem. it is the natural product of a system that has big problems.

yes, any nation that has a public debt of 15 trillion should be removed from the board of IMF

 

[Sasquatch]

China on Monday offered $43 billion to the IMF's crisis-fighting reserves, rounding off a global push to nearly double the Fund's war chest to $456 billion to help protect countries from fallout from the euro zone debt crisis.

China's contribution was part of a pledge by Group of 20 countries made in April to supply the International Monetary Fund with extra firepower.

"These resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members," said IMF Managing Director Christine Lagarde.

"They will be drawn only if they are needed as a second line of defense" when other IMF loans have been depleted, she said in a statement during a Group of 20 summit in Mexico.

The leaders of BRICS nations -- Brazil, Russia, India, China and South Africa -- said earlier that they "agreed to enhance their own contributions to the IMF" but had insisted that the money be used only after existing funds were depleted.

According to a chart published by the IMF, Brazil, Russia and India each pledged $10 billion, while South Africa offered $2 billion. G20 host Mexico also contributed $10 billion.

"Countries large and small have rallied to our call for action, and more may join," said Lagarde, who said total pledges had reached $456 billion -- "almost doubling our lending capacity."

The BRICS sought to tie the loans to long-delayed reforms that would give the developing world more say at the Washington-based Fund by boosting their voting power as shareholders.

"These new contributions are being made in anticipation that all the reforms agreed upon in 2010 will be fully implemented in a timely manner, including a comprehensive reform of voting power and reform of quota shares," the BRICS leaders said in a joint statement.

In their public remarks in Los Cabos, Chinese officials declined to discuss sums and stressed the need to implement IMF quota reforms agreed in 2010.

"If the quotas are not commensurate with the relative economic weight of the different countries, then it has to be changed," said He Jianxiong, director general of the international department of the People's Bank of China.

Growth of the emerging countries, which has far outstripped that of the rich world in recent years, made it "only natural that the quotas should be shifted from developed economies to developing economies," he told reporters.

The five BRICS nations represent 43 percent of the world's population and about 18 percent of global economic output. They have about $4 trillion in combined reserves, with the lion's share held by export powerhouse China.

Emerging economies have long demanded more say at institutions like the IMF to reflect their growing clout. Their frustrations have grown with the likely delay in implementing the 2010 deal that would boost their voting power and make China the third-largest voting member of the IMF.

The Chinese central bank's He indicated that Beijing still has to win over a skeptical public on the need for China, which still has hundreds of millions of poor people, to help bail out European countries with higher standards of living.

Describing money loaned to the IMF as an investment and a useful foreign reserve management tool, he said "it is actually a good investment in terms of safety, liquidity and yield."

Indeed, the PBOC emphasized in an unusually detailed statement on its website later that such pledges would not necessarily be drawn down. The comments appeared aimed at addressing domestic criticism that China should not be helping out more prosperous countries.

For instance, China had promised to buy $50 billion in IMF bills when the fund expanded in 2009, the central bank said, but to date had only actually purchased $5.7 billion worth.

"The increase in capital is not free aid. It's the IMF borrowing from China on the basis of guaranteeing safe and reasonable returns," it said.

"China's holdings of IMF bills are safe and with normal interest payments so far. Participating in the increase of IMF capital conforms to China's interests and China's international status and international responsibility."

The big emerging economies are also seeking more influence in the world economy by planning wider use of currencies other than the dollar and euro. The BRICS statement on Monday said the five leaders had "discussed swap arrangements among national currencies as well as reserve pooling."

BRICS finance ministers and central bank governors were instructed to study the swaps and pooling arrangements and relevant internal legal issues and report to next year's BRICS leaders' summit in South Africa, the statement said.

"The pool is mainly a preventative measure," said He.

Brazilian Finance Minister Guido Mantega told reporters the plan to pool reserves "will increase confidence by making sure there is more ammunition available if there is a problem."

The BRICS' contributions to the proposed pool will be decided by size of each country's foreign exchange reserves, Mantega said.

 

[Chinese Century]

our loans given to the IMF should be attached to 4 main changes in the IMF:

1) more voting & quota shares given to developing countries especially to china and reduction in european and US shares.
2) reform of the 24 member executive board, removal of smaller european countries from the board.
3) removal of the supermajority veto power of the US(need 85% to pass laws, US has votes of 17% thus giving them effective veto power). germany have proposed to reduce supermajority threshold to 75%.
4) the appointment of the director general should be on the basis of mutually agreed person and not based on being a european person.

IMF, world bank, WTO are all american run institutions for the benefit of america and they must be fully reformed from the list i put for the IMF and world bank to the judges in the WTO decision making panel. china must also put pressure on the IMF to include the renminbi in the Special Drawing Rights (SDR).

DO NOT give the west a free lunch, squeeze the balls of the west to the max.

 

[shuttler]

our loans given to the IMF should be attached to 4 main changes in the IMF:

1) more voting & quota shares given to developing countries especially to china and reduction in european and US shares.
2) reform of the 24 member executive board, removal of smaller european countries from the board.
3) removal of the supermajority veto power of the US(need 85% to pass laws, US has votes of 17% thus giving them effective veto power). germany have proposed to reduce supermajority threshold to 75%.
4) the appointment of the director general should be on the basis of mutually agreed person and not based on being a european person.

IMF, world bank, WTO are all american run institutions for the benefit of america and they must be fully reformed from the list i put for the IMF and world bank to the judges in the WTO decision making panel. china must also put pressure on the IMF to include the renminbi in the Special Drawing Rights (SDR).

DO NOT give the west a free lunch, squeeze the balls of the west to the max.

Your ideas are great but regarding point 3 and 4 above, I dont think they (US and Euro) will give them away!

Dont understand why Countries helping that bloodsucking IMF.

the collapse of euro will be more damaging to the world's economy than dispatching these billions of loan money for China

 

[Sasquatch]

Your ideas are great but regarding point 3 and 4 above, I dont think they (US and Euro) will give them away!



the collapse of euro will be more damaging to the world's economy than dispatching these billions of loan money for China

China also gets more influence by helping Europe.

 

[anonymousposter]

see, there is a saying here in america.

when you owe the bank 100,000 bucks and cant pay, that's your problem.
but if you owe 1,000,000,000 bucks and cant pay.... now thats the banks problem.

china and america are sitting around playing a strange game. china keeps lending to america and america says give me more and china says borrow some more.

i think there are some chinese who think like mercantile imperial britain. but america is not a person and china is not a bank. In the end human institutions including the concept of "money" and "credit" are human constructions and they only really exist in our heads. i think the chinese think they are being real smart by keeping their currency low, lending america into enormous debt, and exporting to greater economic heights.

one word of caution: this game was invented by the Americans. Dont bring communist naivete. Peoples Liberation Army is not going to seize the Grand Canyon as a collateral.

 

[shuttler]

see, there is a saying here in america.

when you owe the bank 100,000 bucks and cant pay, that's your problem.
but if you owe 1,000,000,000 bucks and cant pay.... now thats the banks problem.

china and america are sitting around playing a strange game. china keeps lending to america and america says give me more and china says borrow some more.

i think there are some chinese who think like mercantile imperial britain. but america is not a person and china is not a bank. In the end human institutions including the concept of "money" and "credit" are human constructions and they only really exist in our heads. i think the chinese think they are being real smart by keeping their currency low, lending america into enormous debt, and exporting to greater economic heights.

one word of caution: this game was invented by the Americans. Dont bring communist naivete. Peoples Liberation Army is not going to seize the Grand Canyon as a collateral.

when the People's Bank of China thinks about investing in US' treasury bills/bonds, the factors which will affect their decisions are: yield rates, discount rate, maturity, principal amounts, bond ratings, political and economic risks. all those communists and PLA craps are not for Zhou Xiaochuan of PBC to consider. Neither will Bernanke nor Geitner take these crap!

 

[anon45]

our loans given to the IMF should be attached to 4 main changes in the IMF:

1) more voting & quota shares given to developing countries especially to china and reduction in european and US shares.
2) reform of the 24 member executive board, removal of smaller european countries from the board.
3) removal of the supermajority veto power of the US(need 85% to pass laws, US has votes of 17% thus giving them effective veto power). germany have proposed to reduce supermajority threshold to 75%.
4) the appointment of the director general should be on the basis of mutually agreed person and not based on being a european person.

IMF, world bank, WTO are all american run institutions for the benefit of america and they must be fully reformed from the list i put for the IMF and world bank to the judges in the WTO decision making panel. china must also put pressure on the IMF to include the renminbi in the Special Drawing Rights (SDR).

DO NOT give the west a free lunch, squeeze the balls of the west to the max.

Europe, the US, or both refuse... now what do you do? China needs the West to continue buying its products and keep its economy growing.

You believe China has the West by the balls, its an illusion.

The threats you give are hollow in our eyes.

 

[funtoosh]

IMF exists, because it benefits lenders. imagine country A cant pay back China. Now country A says, "we have no money to give you sorry!". but countries are not like people. A predatory lender can send out the yakuza to break some knee caps and take the tv and jewelry, but China cant send out the People's Liberation Army to collect debts.

Essentially, China lends money to debtors so they can pay back the original debts country A accrued. But like above poster noted, now the Chinese can start making demands on how Country A runs its treasury.

So you might think, well then IMF f@cking sucks, let's just getmrid of it. But what if country A goes bankrupt? Angry China might rattle her sabres, but economically destitute country A might also think war is the "only way". and often when country A goes bankrupt, country B also goes bankrupt. Because country B might do a lot of business with country A and country B's lender's also wont get their money back and merchants who used to sell stuff ti country A is also going bankrupt, because there is no more market in country A. Now country C might go bankrupt too, because country B went bankrupt and D, E, F, and G are all lined up to go bankrupt too for the same reason.

Then the chairman of the politburo in China wakes up one morning and read the headlines of Xinhua and it reads, "China also bankrupt". he is saying, how the f@ck are WE bankrupt??!! then his finance minister looks all disheveled and on verge of tears and say, "the currencies of countries A B C D E F and G are all worthless and all those mofos who we lent money to wont pay us back!m and they say they wont even buy any more Made in China toys, electronics, apparels, because they have no money."

Now everybody is sitting around sh177ing in their pants thinking, "why o why did we get rid of the IMF?". and these countries start waging wars with each other, because heck... they got nothing to lose but their lives. they are all angry and blaming each other and need to kill people to feel better about themselves.

The IMF is not the problem. it is the natural product of a system that has big problems.

good one mate.. nice ly put

 

[perplexed]

when the People's Bank of China thinks about investing in US' treasury bills/bonds, the factors which will affect their decisions are: yield rates, discount rate, maturity, principal amounts, bond ratings, political and economic risks. all those communists and PLA craps are not for Zhou Xiaochuan of PBC to consider. Neither will Bernanke nor Geitner take these crap!

Those are ephemeral facts which can be manipulated.. innocent Chinese

 

[Chinese Century]

Europe, the US, or both refuse... now what do you do? China needs the West to continue buying its products and keep its economy growing.

You believe China has the West by the balls, its an illusion.

The threats you give are hollow in our eyes.

wrong, your ability to buy our products depends on the amount of money we lend to you.
we lend our money to you to buy our products.
what we are now trying to do is to allow our people to keep our money(instead of lending it to america) so our own people can buy the the products we make.

without china lending to america, america wont be the power it is now. because america wont be able to live beyond its means by spending $3.6 trillion and $1+ trillion in deficits.
china absorbs enormous amounts of dollars the federal reserve prints, which is one of the reasons our inflation is high and US inflation is low. america's biggest export to the world is inflation.
if we stop absorbing those dollars, those dollars will remain in america causing massive inflation in america.

china holds all the cards. the creditor always holds the cards.