Re: [A-List] IMF: a Clintonian view

["Anne Williamson" <annewilliamson@xxxxxxx>]

Foreigners could convert to gold the FRNs they took in exchange
for their labor and goods until 1971.  Americans could not exchange the
FRNs they took in exchange for their labor and production for
gold after 1933 to the present.

Russia will do very handsomely in the next decade in the oil-based
economy while the US goes into decline - Fedgov has overseen the
export of our manufacturing base, many of our services, and are now working
feverishly to continue the devaluation of our culture and the
debasement of our population by erasing the US-Mexican border with
the ultimate goal of creating a mobility of labor equal to that of capital.
And mobility of labor requires the destruction of the family, local
communities, and national cultures, i.e. "roots."  Multi-multi madness,
thank you, Mr. Gramsci.

I'd just as soon see Russia do well in a gold-based economy than an
oil-based one since people the world over would reap benefits beyond
the production of the oil commodity.  Gold is the only and ultimate
instrument
to hold governments accountable and insure the preservation of liberty.

Actually, gold per oz would need to be about $6000 in order to return
to the gold standard; it will happen whether by design or not.  The world
economy is going to contract - enormously - anyway.  Perhaps sooner than
anyone now anticipates.

Anne

----- Original Message -----
From: Henry C.K. Liu <hliu@xxxxxxxxxxxxxx>
To: <a-list@xxxxxxxxxxxxxxxxxxx>
Sent: Saturday, May 18, 2002 6:24 PM
Subject: Re: [A-List] IMF: a Clintonian view


> FDR was inauggurated on March 4, 1933. Three days later, on March 6, he
issued
> an executive order to suspend all banking functions for 4 days, forbade
the
> export of gold and directed banks not to [pay out gold in exchange for
> currency.  On March 7, member banks of the Federal Reserve System were
ordered
> to deliver to the Reserve Banks all their gold and gold certificates.  On
March
> 9, Congress passed an Emergency Banking Act which endorsed action taken by
the
> President.  The Act also authorized the RFC to buy banks' preferred stock
to
> improve their condition by enlarging their unpledged resources.
>
> http://lamar.colostate.edu/~rphillip/chicplan.html
>
> Specie money of course has relatively intrinsic value.   However, if only
gold
> is granted the status of legal tender, gold would have to be valued at
over $30k
> per ounce and the global economy would have to contract drastically.
> Geo-politics would be altered from oil based to gold based.  Russia would
> re-emrged as a super power overnight.
>
> Henry C.K. Liu
>
> Anne Williamson wrote:
>
> > It is incorrect that the New Deal denied foreign holders
> > of dollars convertibility into gold.  FDR conviscated
> > the gold of US citizens - upon pain of fines, penalities,
> > and imprisonment - giving them Federal Reserve
> > Notes in exchange, and then devalued the dollar - AND
> > FOR FORTY YEARS IT WAS ILLEGAL FOR ANY
> > AMERICAN TO HOLD OR TRADE IN GOLD, and
> > that meant at a minimum they could not convert their FRNs
> > into gold.
> >
> > Post-Bretton Woods, the world operated not on the gold
> > standard, but on what is known as the "gold exchange
> > standard," which was the US's highly successful effort to
> > force foreigners to treat dollar reserves as if they were
> > gold.  (All members of the IMF sign away any rights to
> > back their currencies with gold.)  It was Richard Nixon
> > who broke convertibility for foreign holders of FRNs in
> > 1971 when the US defaulted on its foreign debt, essentially
> > telling its creditors, "We won't pay.  Here, eat some more
> > of our delicious, phony-baloney counterfeits."
> >
> > The only lawful money is gold, and according to the US
> > Constitution a dollar is a certain weight of gold.  The
> > world operates today without lawful money anywhere
> > since the Swiss bit the bullit 18 months ago and ended
> > convertibility of the Swissy.  And the only bona fide dollars
> > are gold coin.
> >
> > Paper notes issued by the Fed are "Federal Reserve Notes,"
> > unsigned promissory notes that merely
> > represent a claim upon wealth/resources/products that
> > may or may not be honored.
> >
> > Enjoy your FRNs, the greatest swindle the world has ever
> > known -- and the preferred tool of  US-led global fascism.
> >
> > And, BTW, foreign authorities are just as nervous about a
> > possible collapse of the "dollar" as are US authorities.  In
> > 1990, 51% of foreign central bank reserves were in "dollars".
> > Today, that figure has risen to 69% -- leaving all the world's
> > parasites stuck in the FRN quagmire on their knees praying
> > the "dollar" retains its current market strength.
> >
> > Swine.  Each and every one.
> >
> > Anne
> >
> > ----- Original Message -----
> > From: Henry C.K. Liu <hliu@xxxxxxxxxxxxxx>
> > To: <a-list@xxxxxxxxxxxxxxxxxxx>
> > Sent: Saturday, May 18, 2002 4:47 PM
> > Subject: Re: [A-List] IMF: a Clintonian view
> >
> > > Countries do not have debt problems.  The have foreign debt problems.
> > Applying the State Theory of Money. any government can issue all the
money a
> > country needs as long as its authority to collect taxes is not impaired.
> > Under condition of production overcapacity, any government can print as
much
> > money as needed with fear of inflation, to boost aggregate demand by
> > maintaining full employment and rising wages.  It is when a country
borrows
> > foreign currency debt, that its own government cannot legally print that
it
> > faces a debt crisis.
> > > Sovereign governments do not need IMF, or any other foreign
institutions,
> > permission to refute foreign debt.  Any sovereig government can refute
> > foreign debt unilaterally by invoking the doctrine of lender liability -
> > that a lender is responsible for the liability of lending to a borrower
that
> > he knows could not handle or benefit from the loan.  Now international
> > lenders will of course demand their pound of flesh, but they are
powerless
> > to collect.  The worse that they can do is to stop lending further,
which
> > they are doing anyway when IMF austerity conditionalities are not met.
> > >
> > > In the US, a company under bankruptcy reorganization can get
> > debtor-in-posseion (DIP) loans to operate while working out a
reorganization
> > plan to maximize value to non-secured creditors.  DIP loans enjoy senior
> > position to all pre-bankruptcy debts.
> > >
> > > Under the New Deal, the US by executive order forbade the payment of
gold
> > to foreign holders of the dollar. All a soverign debtor nation needs to
do
> > is to declare by executive order that all foreign currency debts can
only be
> > paid in domestic currencies, and turn over a new financial page.
> > >
> > > Henry C.K. Liu
> > >
> > > Keaney Michael wrote:
> > >
> > > > Forget sovereign bankruptcy plans
> > > > Rather than ponder new ways for dealing with failing countries, the
IMF
> > should use better the tools it has, says Caroline Atkinson
> > > > Financial Times: May 17 2002
> > > >
> > > > Question: when is a country not like a company? When it has run out
of
> > money. A company can declare bankruptcy. A country cannot. Debt
work-outs
> > for companies are guided by domestic bankruptcy laws. Debt work-outs for
> > countries are not. They can be long and messy.
> > > >
> > > > It is little wonder that the International Monetary Fund and
creditor
> > government officials struggling to manage emerging market financing
crises
> > are seeking new ways to resolve them.
> > > >
> > > > The debacle in Argentina adds urgency. Yet the boldest proposal - a
> > sovereign bankruptcy procedure drawing on the analogy with companies -
is
> > likely to prolong debate, not resolve it. The less ambitious US Treasury
> > plan - a renewed effort to press for bond clauses to facilitate orderly
debt
> > work-outs - also falls short.
> > > >
> > > > Neither scheme would have stopped Argentina's collapse or made its
> > problems more tractable. Declaring default without changing the currency
peg
> > would have triggered more capital flight. Better procedures for dealing
with
> > bondholders now would not address the imploding financial system, the
> > crumbling economy and the threat of hyperinflation.
> > > >
> > > > Conversely, if Argentina restores financial stability and a credible
> > framework for growth, its creditors will be keen to strike a deal.
> > > >
> > > > In crises from Mexico to Turkey, debt problems are a symptom as well
as
> > a cause of economic trouble. Resolving them requires reforms, notably
> > exchange rate changes that, although needed for growth, cut living
standards
> > in the short term. Identifying the reforms, persuading countries to
> > implement them and being ready to stop lending if they do not are the
> > challenges.
> > > >
> > > > Energy should be focused not on the mechanics of debt work-outs but
on
> > three deeper issues. First, how to judge when a country cannot pay its
debts
> > without crippling its economy. Second, how to strengthen the
international
> > community's will to deny money when policies stand little chance of
working.
> > Third, how to use existing tools to push debtors and private creditors
> > towards agreement.
> > > >
> > > > When crisis hits, it is hard to tell whether policy reform and
temporary
> > official financing will be enough to restore investor confidence. In a
few
> > cases, debts may have to be restructured. Tough judgments are involved
in
> > deciding when restructuring is the only option and how to share the pain
> > between debtor countries and their creditors.
> > > >
> > > > The IMF is the only body with political legitimacy and the technical
> > ability to make such judgments. It should do so with more transparent
> > guidelines on debt sustainability. Its programmes already require
> > assumptions about a country's ability to raise taxes, cut spending and
> > borrow. What is needed is a more open acknowledgement of when debt
> > restructuring is needed to make these assumptions add up.
> > > >
> > > > At times, it is right for the IMF to provide finance for a country
to
> > avoid default. But exceptionally large packages should be more carefully
> > limited, with tightly monitored and credible policies that make a return
of
> > confidence highly likely. A fixed exchange rate that has been challenged
by
> > the market should almost never be part of the package. And if markets
give a
> > thumbs-down or policies slip, lending should stop and the strategy
should be
> > rethought.
> > > >
> > > > Some argue that a sovereign bankruptcy mechanism would help the IMF
and
> > its shareholder governments to say No. But the IMF already has a
powerful
> > tool to push debtors and creditors to negotiate: its ability to lend
into
> > arrears, signalling support for a borrower even if it is not paying all
its
> > debts to private creditors.
> > > >
> > > > A sovereign borrower has more freedom than any company to stop
paying
> > its debts and to force a settlement on creditors. Governments rarely do
> > this. The damage to credibility and loss of access to capital costs too
> > much. Borrowers need the IMF's "seal of approval" as well as financial
> > support to ease the crisis. But the IMF can decide to lend when a
country is
> > in arrears to its private creditors if the country is making its best
> > efforts to reform. Then, creditors have little option but to try to
> > negotiate a deal. Unlike a corporate bankruptcy, there are few assets to
> > seize. Creditors need the IMF to bring debtors to the table, with a
viable
> > economic plan.
> > > >
> > > > So why has the IMF not made more use of this tool? It requires truly
> > difficult judgments backed by shareholder governments about how much
pain a
> > country can and should bear and how much risk default poses for the
system.
> > > >
> > > > A new legal superstructure would not make those judgments easier.
Rather
> > than wait for more legal powers, the international community should
refine
> > its judgment about when to use the power it already possesses. The
choice
> > may not be between new IMF loans and default but between throwing good
money
> > after bad and new loans to back credible policies and a realistic debt
> > burden.
> > > >
> > > > The writer is a senior director at Stonebridge International, a
global
> > strategy company, and adjunct fellow at the Council on Foreign
Relations.
> > She was senior deputy assistant secretary at the US Treasury
> > >
> > >
> > >
>
>
>