and perhaps even Blackstone Security's overdraft (aka: "working capital"?
This is how it would work, were it to happen.
The FT would run a schadenfreude-inspiring piece on how little demand there now is for IMF loans.and how the International Institution will have to live for several years off the profits (interest-rate spread) it had squirreled away following any scandalous speculator-bailout you can name. (Think big, think - erm - Russia.) Maybe the article would be entitled, let's say, something like Falling income: IMF in dilemma as new loans decline(1). If your reading's almost up to date, you'll enjoy the thought of those slathering Wall Street thugs twiddling their thumbs for the next few years, looking for trouble that never comes, over your morning coffee.
But that's not all.
The Iraqi Foreign Minister would then cheerfully announce that Foreign Investors would be needed to finance new production in the new year (2). Funny, the Kuwaiti Oil Minister was pictured just last week, looking miserable, and announcing "additional capacity". Foreign Investors there, too? Same ones? What's your point?
Now we know that crude is more valuable (as collateral for exploration loans) in the ground than it is in the barrel, ready to roll (after you roll it, the price might go up). Moreover, in the permanent war environment which the unprovoked US invasion and hostile occupation maintain, Foreign Investors are likely to demand a huge premium on funds advanced to build anything at all in Iraq. Why would they risk seeing their dollarii go up in smoke, hit by a stray rocket or misguided smart-bomb? Or overrun by those estimated 10,000 Kurds said to be training under Israeli guidance? (I read it on dailykos, though I can't now supply the link).
Just who are these Foreign Infestors, oops, typo, read: Investors?
We all know how the IMF works, by now: along with crippling/inappropriate reforms (3) it insists on the accumulation of reserves against default, and that these be held in, remember, US T-Bills. Supplied for a fee by, erm, well, any one of the normal bidders at T-Bill auctions, say, Citi or Goldman. Certainly gets rid of excess inventory, even in the middle of a current account crisis during a time when domestically indebtedness and defaults are soaring. Neat, huh?
And all this would be possible because the dreaded IMF bailout, cough, sorry, loan facility is already in place - as of December 24, 205, as a matter of fact - though the FT piece (refs below) doesn't mention a date, on that.
For the date of the bailout arrangements, you'll have to refer to Let the Drilling Begin: Iraq's IMF Loan, By Joshua Frank.
So there you have it: because the Free Market works with absolute perfection (doesn't need Wall Street or military enforcers), the Hidden Hand of Mr McMarket is always ready to goose you for tax dollars, unless you can already hazard a guess about just who those brave Foreign Investors might be.
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(1) Signed Andy Bollocks - ooops! Sorry, cough, make that Andrew Balls. Page 7, above the fold, December 28, 2005. Complete with a chart showing only a teeny blip for 2005. No webpage reference supplied in the print edition.
(2) Iraqis look to raise oil output next year FT, December 29, 2005. Notice the typical upbeat tone of the IMF report: growth forecast at 10% for 2006 (reassure those Foreign Investors!!) and the matching State Department blurb on how much better those Iraqis are doing during hostile occupation as compared with the last years of US-led sanctions....
(3) Joseph Stiglitz; Globalization and its discontents ISBN 0-713-99664-1. Says it all; highly recommended.