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Posts Tagged ‘International Monetary Fund’

The dollar’s 70-year dominance is coming to an end

Posted by Ram Kumar Shrestha on January 15, 2015

Within a decade, greenback’s could be replaced as the world’s reserve currency

In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order after the Second World War.

The US was already the world’s commercial powerhouse, having eclipsed the British Empire several decades earlier. America was also on course to be among the victors of “Europe’s conflict”, even though its economy was largely unscathed by war. As such, Bretton Woods was US-dominated and produced a settlement largely on US terms.

Seventy years ago this week, that fateful summit ended. Its close marked the moment the dollar’s unquestionable supremacy was secured. Since then, global commerce has been conducted largely in dollars and leading economies have held the greenback as their primary reserve currency.

The same system remains intact today, with the lion’s share of commercial settlements worldwide still clearing the US banking system – even if the parties involved have nothing to do with the States.

Read the rest of this entry »

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World Oil Price to Double by 2022 – IMF Report

Posted by Ram Kumar Shrestha on May 15, 2012

World oil prices may double in the next decade with a disastrous effect on the global economy

World oil prices may double in the next decade with a disastrous effect on the global economy

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World oil prices may double in the next decade with a disastrous effect on the global economy according to a report commissioned by the IMF, The Telegraph reported on Tuesday .

Global oil prices are currently hovering at historically high levels of $110 per barrel but a combination of rising demand and constrained supply could have major consequences for the global economy, the paper said. Read the rest of this entry »

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At World Economic Forum, Fear of Global Contagion Dominates

Posted by Ram Kumar Shrestha on January 29, 2012

DAVOS, Switzerland — They came, they feasted on smoked sturgeon and black truffle risotto, drank liquor paid for by global banks, endured dozens of security checks, and tried not to fall down in the snow. They talked about the perilous state of the global economy and the future of capitalism. Then, they headed back to their home countries — many in chauffeured limousines, some by private jet.

But as the people who run much of the planet wrapped up the annual festival of influence known as the World Economic Forum on Saturday, any sense of achievement was hard to discern. The participants arrived amid elevated unemployment in many economies, worries about government budget deficits, and fears that contagion from a financial crisis in Europe could infect the rest of the world. They went home with all of these worries intact, and perhaps reinforced.

Nouriel Roubini, the economist who — not for nothing — is known as “Doctor Doom,” noted that world leaders are divided on a great array of crucial issues, from arguments over trade imbalances and currency valuations to the threats posed by Iran and North Korea and the challenge of climate change.

“On all these issues that require international coordination, there is no agreement,” he said during a Saturday morning panel. “It’s a world of chaos that can lead to potential conflicts.”

European officials confronted a palpable sense of impatience and resentment from their counterparts, drawing accusations that they have imperiled the fate of the globe by repeatedly failing to prop up ailing member states. Read the rest of this entry »

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Why Would China Want to Help Bail Out the Euro Zone?

Posted by Ram Kumar Shrestha on November 2, 2011

By LEO CENDROWICZ / BRUSSELS

A Chinese paramilitary officer stands in front of the European Union flag outside the office of the E.U. delegation to China in Beijing on Oct. 28, 2011 Ng Han Guan / AP

In years to come, economists and historians might hark back to this week as the moment the balance of world power tipped toward China. The signs have been there for while, but the symbolism is especially potent now, in the few days between yet another euro-zone crisis summit, held in Brussels on Oct. 26, and the Nov. 3-4 G-20 summit in Cannes, France. The reason for choosing this as the watershed is crudely financial: at the Brussels summit, European leaders made a previously unthinkable appeal for China to use its $3.2 trillion currency reserves to help dig the euro out of its debt hole. And while the euro zone is anxiously awaiting an answer, China — inscrutable about its intentions — is milking the moment.

China is being targeted as a potential investor as part of a complicated scheme agreed to at the summit to leverage Europe’s bailout fund up to €1 trillion ($1.4 trillion), along with other potential outsiders like Russia, Brazil, Middle Eastern countries and the International Monetary Fund. On Oct. 27, French President Nicolas Sarkozy, who is hosting the Cannes G-20 gathering, phoned Chinese President Hu Jintao to seek backing. “If the Chinese, who have 60% of global reserves, decide to invest in the euro instead of the dollar, why refuse?” Sarkozy said after his call. “Why would we not accept that the Chinese have confidence in the euro zone and deposit a part of their surpluses in our funds or in our banks?”(See “Europe’s Debt Crisis Agreement: The Good, the Bad, the Ugly.”)

China can certainly spare the €100 billion ($140 billion) reportedly being discussed among officials. The real question is why China would want to plant it in a low-growth region like the euro zone. The bond-leverage scheme has already  Read the rest of this entry »

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Europe’s Elusive Gold Reserves: Are Greece, Portugal Sitting on Billions of Dollars?

Posted by Ram Kumar Shrestha on July 4, 2011

By Daniel Eckert and Holger Zschäpitz / Die Welt / Worldcrunch

This post is in partnership with Worldcrunch, a new global-news site that translates stories of note in foreign languages

Jonathan Nourok / Getty Images

into English. The article below was originally published in Die Welt.

The first thing any insolvent private person is forced to do is relinquish the family silver. But other rules seem to apply to governments. Whether they’ve been living above their means for a few years or for decades, certain countries hold on tight to their assets, declare themselves unable to pay back their debts and turn to other countries for help.

The European Union has seen many an example of this. Right now, Greece is negotiating with the troika of the E.U., the European Central Bank (ECB) and the International Monetary Fund (IMF) for a new rescue package while Athens sits on an impressive 114-ton stash of gold, about what four large, fully loaded trucks could carry.

The gleaming bars in the vaults of the Greek central bank are worth $5.8 billion. If Athens were to sell that gold, the Greek state would theoretically be able to meet at least part of the debt payments due soon without any outside help.(Read how the Greek economic crisis is threatening the euro.)

Another country in crisis, Portugal, also holds a significant amount of precious metal dating back to the days of António de Oliveira Salazar’s regime. Instead of aid, Lisbon could have converted its $19 billion worth of gold into cash.

Nick Moore, chief commodities strategist at the Royal Bank of Scotland in London, reports that a question often asked by bank clients is why these governments don’t sell some of their gold. After all, it is recognized worldwide as an asset that can be sold even in tough economic times. The gold in the central banks of euro-zone members is altogether worth some $545 billion.

With that, 4.5% of Euroland’s $12 trillion public debt could be paid off in one fell swoop. In relation to its debt, Portugal is particularly gold rich. Lisbon could put 383 tons of it on the market and make $19.3 billion at the present rate. Read the rest of this entry »

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Early French Reaction To News That DSK Case May Collapse

Posted by Ram Kumar Shrestha on July 1, 2011

by 

Reaction in France to the bombshell news from U.S. that prosecutors’ case against former International Monetary Fund

Former IMF head Dominique Strauss-Kahn, June 6, 2011. (Photo: Eric Feferberg / AFP Getty Images)

head Dominique Strauss-Kahn for attempted rape and sexual assault was nearing collapse has thus far been muted—though that’s certain to change when the nation’s talking heads awake and learn of the late-breaking information out of New York. However, awaiting response from the pundits, politicians, and average news junkies who will inevitably air analyses of this latest twist in the extremely high-profile affair, here’s a preview of what we’ll be inclined to to hear—or not:

  • Caution, caution, then a bit more caution: Because the May arrest and indictment of Strauss-Kahn provoked claims of his innocence that were as categorical as the opposing condemnation that the notorious sexual predator should have been unmasked years ago, French reactions aired in hindsight Friday are bound to be more measured. Indeed, awaiting the still slumbering talking heads who assumed the role of lead bloviators the first time around, France’s media have thus far played the story about as straight as possible—and with a degree of wait-and-see that was rare in May. “Accusations Against DSK May Fall Apart” headlined le Monde online, an almost literal translation of the New York Times story that le Monde dispassionately details. (Daily rival Libération went the same route, with almost an identical headline.)Similarly, news radio station France Info led with the stunning news early Friday, but was equally carefully in recounting the contents of the original Times piece, and remained strictly conditional about the doubts and consequences it involves. Meanwhile, in deference to the numerous unexpected twists in—and intemperate reactions to— the DSK case already, France Info‘s only editorial addition to the dramatic news of prosecutors’ questioning aspects of the victim’s credibility was the sage comment, “what a mess”.
  • Shift targets of suspicion: As the various elements of his dilemma gradually lined up against him, Strauss-Kahn’s French backers found it increasingly difficult to continue flatly refuting the charges against him  as fabrication, a conspiracy, or a French-bashing miscarriage of justice. As a result, his supporters fell back to reminders about presumption of innocence—and attacks of an American justice system that they (and many others in France) found brutal in its humiliating presumption of guilt. It’s that theme we’re likely to see reprised in the early hours of Friday—and explode if American courts decide to dismiss the charges or relax the conditions of DSK’s release during a new hearing expected Friday. Read the rest of this entry »

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Dominique Strauss Kahn: IMF Chief On Suicide Watch In New York Jail

Posted by Ram Kumar Shrestha on May 18, 2011


No idea whether he had other rape cases in his life, but this rape fully ruined his life.
Read the Article at HuffingtonPost

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