My previous post discussed the huge confrontation that is brewing between the IMF and the US government because of the persistent financial profligacy of the USA. In the April 17, 2014 issue of USA Today, this confrontation was discussed openly in the mainstream media (see link). This confrontation is apparently going to lead to the end of the USA’s dominance of the IMF itself and over global finance in general. In essence, the IMF is trying to free itself from US control so it can, in behalf of the rest of the world, impose financial discipline on the US government.
The article reports that the other nations of the world have a “palpable bitterness and frustration about American intransigence,” and that the clueless “inhabitants of the [US] Congress, like Emperor Nero in ancient Rome, are still fiddling away merrily impervious to the world outside.” I hope that readers of this blog realize that this IMF vs. US government is going to affect Americans in a very negative way when this global financial battle boils over in a way which leads to “deep-seated tectonic shifts in the world economic balance of power.” This is a most ominous prediction in the article that a global power shift is going to be imposed on the US government whether it wishes to cooperate or not. If the US chooses to be uncooperative, there may be a currency/trade war where the US dollar is increasingly excluded from international trade deals. If so, the value of the US dollar could drop dramatically.
The IMF is demanding a rearrangement of the voting rights within the IMF so these voting rights reflect modern reality instead of the reality of total US dominance that existed just after World War II when the IMF was formed. The link names Brazil, China, India, Indonesia, Russia and Turkey as being some of the nations that are demanding a greater role within the IMF. Obviously, to make that happen, the USA must accept a diminished role within the IMF and the global financial system. The article states that “some Republicans” in the Senate object to the changes because they will “undermine US authority over IMF spending.” That is obviously true, but the US Senate has little ability to stop that from happening. As my previous post noted, the IMF leader is warning that a “Plan B” will be implemented to impose controls over the US position in the global financial community if the US does not voluntarily accept a lesser status in the IMF. The world is clearly “fed up” with the profligacy of the US government and its refusal to get its financial house in order. If the USA was a small and weak nation, the IMF would be imposing financial discipline on the US government and essentially be putting it into a kind of outside receivership. However, because the USA has been the global superpower for so long, it is hard for the IMF to impose fiscal discipline on the US government.
The article hints at the very bad impact the “Plan B” will have on the USA and its citizens if the US government refuses the demanded changes within the IMF. It states that “disruptive changes” will hit the USA in future years and that the IMF “gave the US until the end of year…threatening to leave America out of new changes otherwise (emphasis added).” This is tantamount to a warning to the US that there will be a global monetary/financial war of some kind if the USA does not accept a diminished role within the IMF and accept the modern realities of the relative financial strengths of nations. What might be a change the rest of the world can do if the US refuses to cooperate with the IMF and the rest of the world? The rest of the world’s nations could simply all resign from the IMF and set up a new global entity, perhaps called the Global Monetary Fund (GMF) that would do all that the IMF previously did but without any US dominance or veto over the new entity. That new entity could appoint the current IMF leader, Christine Lagarde, as the new leader of a new “GMF” and the US would be admitted to membership only after the US Senate approves the diminished role of the USA which the new GMF would assign it. One evident result of this action, in my opinion, would be the imminent end of the US dollar as the global reserve currency, and its replacement with a set of regional, perhaps gold-backed currencies. The fact that China has been amassing gold and silver on a massive scale argues that China already knows that gold and silver will have a major role in the pending realignment of global currencies and financial power. It could lead to the end of the ability of the US Federal Reserve Board to set the value of the US dollar on global markets and the end of “Wall Street’s” ability to set the price of gold, silver and many other commodities. The US government is loathe to submit to any financial discipline, and the US Congress has so far been unwilling to do what is necessary to impose financial discipline on the US federal deficit. If a new global entity is established to replace the IMF and the USA refuses to join the new global entity, it is the USA that will become a “pariah nation” in the global financial community. Perhaps the new global financial management authority will require that the US government and the Federal Reserve Board submit to a forensic audit before the USA can re-join the world’s global community. That could lead to a lot of indictments wherever corruption can be found and documented.
The IMF is serious. I do not believe they and the rest of the world are bluffing. Notice has been served to the USA. Judgment Day for the USA’s long-standing lack of any fiscal discipline will come after the end of this calendar year if the USA does not accept the changes demanded by the IMF.
I do not think that Americans understand the enormity of this confrontation and how it will affect lifestyles of all Americans, the value of the dollar, the changes to costs of all imported goods, etc. I commend the USA Today for making an initial effort to inform the US public about this impending confrontation and that very serious problems for the USA will occur after the end of the year if the US doesn’t accept the diminished role for the USA within the IMF that is being demanded by the rest of the world.
As I noted in my previous post, this conflict could lead to the eventual collapse of the US dollar dominated system of global finance, fulfilling the biblical prophecy in Revelation 17-18 that such an event will occur in the biblical latter days. Keep your eyes on this developing global struggle for financial and monetary power among the nations. I know I will be doing so.