The year is coming to an end and as expected the 2010 IMF Quota and Governance Reforms have not been passed through the US Congress. True to her word, Christine Lagarde has been quick to respond to the lack of movement on the reforms and has issued a press release.
Things will now begin to escalate across a broad spectrum, with instability in the USD expanding and global stock markets adjusting dramatically. We can also likely expect increases in the valuations of gold as the liquidity crisis deepens and global money seeks liquidity outside of the dollar. The propaganda promoting US instability will increase internationally and the script stating alternative sources of liquidity must be utilized will begin to be distributed to global media outlets.
The press release can be read here. The text can also be read below.
Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), made the following statement today:
“The IMF’s membership has been calling on and was expecting the United States to approve the IMF’s 2010 Quota and Governance Reforms by year end. Adoption of the reforms remains critical to strengthen the Fund’s credibility, legitimacy, and effectiveness, and to ensure it has sufficient permanent resources to meet its members’ needs.
“I have now been informed by the U.S. Administration that the reforms are not included in the budget legislation currently before the U.S. Congress. I have expressed my disappointment to the U.S authorities and hope that they continue to work toward speedy ratification.
“As requested by our membership, we will now proceed to discuss alternative options for advancing quota and governance reforms and ensuring that the Fund has adequate resources, starting with an Executive Board meeting in January 2015.”
Those “alternative options” can be reviewed here.
The blatant disregard by the US Congress towards the Executive Branch and Treasury, as well as the IMF and G20 countries is staggering. Whether you agree with the reforms or not, the fallout from this will be huge. It could potentially create the pretext for the exchange of USD in foreign reserve accounts with SDR securities, through the substitution accounts which we have discussed many times. Which may have been the plan all a long. Expect to see almost immediate escalations stemming from this moment. – JC