November, 2001
For the first time ever, the IMF has committed itself to extending its bilateral surveillance to include members' efforts to counter the financing of terrorism.
We have agreed that all 183 countries should consider establishing financial intelligence units to analyze potentially suspicious transactions.
We have agreed on the need to share information and ensure cooperation between national financial intelligence units, and we have agreed that the IMF should provide targeted assistance, expert assistance-in some cases financial assistance-to ensure that every country can play its part and has the resources to do so in the fight against terrorist financing.
http://www.imf.org/...
Sounds good. What could possibly go wrong?
It feels like the IMF is gaining power to direct the economic policies throughout the world.
It changed its ways in 2005/6
Illustrative Currency Amounts in New Special Drawing Rights (SDR) Basket
The IMF has announced that on January 1, 2006 changes in the method of valuation of the Special Drawing Right (SDR) will come into effect (Press Release No. 05/265). The weights assigned to each currency in the SDR basket have been adjusted to take account of changes in the share of each currency in world exports of goods and services and international reserves.
On December 30, 2005, the IMF will determine a fixed amount of each currency in the SDR basket based on the initial weights and exchange rates over the preceding three months. These amounts will produce a value of the SDR in terms of the U.S. dollar on that date that is the same under the current and new valuation methods. The IMF is providing interim calculations of the currency amounts every week for the remainder of this year based on exchange rates over the preceding three months to assist users of the SDR in preparing for the changeover to the new SDR valuation.
http://www.imf.org/...
And this:
China to use renminbi for $50bn IMF bond deal
Leo Lewis, Asia Business Correspondent
China is using a $50 billion bond deal with the International Monetary Fund (IMF) to expand the global reach and influence of its currency, a move which analysts see as a potentially huge development in Beijing’s campaign to internationalise the “redback”.
The strategy could ultimately see the Chinese yuan jostling its way into the foreign exchange reserves of central banks in Asia, Africa and Latin America — an intrusion that would directly challenge the US dollar as the world’s default reserve currency.
http://business.timesonline.co.uk/...
Personally, using the term BRIC is a bit unsettling as it also the name of the Shock Doctrine that trounced economies and policies throughout the world. But it is now used to refer to Russia, Brazil, India, and China.
BRICs Buy IMF Debt to Join Big Leagues, Goldman Says (Update3)
By Lester Pimentel and Valerie Rota - June 11, 2009 14:55 EDT
The dollar’s status as the world’s sole reserve currency may deteriorate, said Nouriel Roubini, the New York University economics professor who predicted the financial crisis.
“We may see complementary reserve currencies,” Roubini said at a conference today in Athens. While it’s “not going to happen overnight,” the development “will diminish the role of the dollar over time,” he said.
Former U.S. Federal Reserve Chairman Paul Volcker said today that there are “no practical alternatives” to the dollar as an international currency, in the text of a speech delivered in Beijing.
‘Sudden Shock’
Treasuries slid yesterday in part because the announcement by Russia and Brazil was a “sudden shock,” said David Spegel, head of emerging-market strategy at ING Groep NV in New York.
China has 3.66 percent of votes in the IMF, Russia 2.69 percent, India 1.89 percent and Brazil 1.38 percent, according to the fund’s Web site. The U.S. has a 16.77 percent.
“We are asking to increase the voice and representation of emerging economies,” China’s He said at a June 9 briefing ahead of a BRIC summit next week in Russia.
Alexei Ulyukayev, first deputy chairman of Bank Rossii, said Russia would sell some of its $140 billion of Treasuries to make room for the purchase of the IMF bonds. Mantega said Brazil’s central bank would decide which assets to sell from its reserves portfolio for the transaction.
http://www.bloomberg.com/...
What does this all mean to US citizens? I haven't a clue. I hope some here might have some insights to share with the rest of us.
What I intuit is that this new offering by the IMF, home-based in DC, is a way to assuage countries holding US Treasuries accumulated by lending the US money. Apparently, the IMF SDRs will pay a bit more interest. Also, these so-called BRIC investors in our debt will gain more voice in economic policies via the IMF positions they are buying.
So, WTO, IMF, WHO, World Bank, International Monetary Fund.
It feels like a move to more of a global control of economic policies especially for indebted countries, like the USA. And if so, does total sovereignty become a word only?
