Did the Economic Hit Man Takeout the IMF?

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Did the Economic Hit Man Takeout the IMF?

Are world leaders reading Confessions of an Economic Hit Man by John Perkins?

Perkins, a former chief economist at Boston strategic-consulting firm Chas. T. Main, says he was an "economic hit man" for 10 years. He writes that his economic projections cooked the books to convince foreign governments to accept billions of dollars of loans from the IMF, the World Bank and other institutions to build dams, airports, electric grids, and other infrastructure he knew they couldn't afford.

"Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars," Perkins writes.

Now, developing nations -- Brazil, Argentina, Uruguay, Indonesia, the Philippines -- are paying off their loans early--as if they finally get the central point of Perkins' book that IMF and World Bank loans are a scam.

The IMF's lending portfolio that had totaled $100 billion in 2003 has since collapsed. It now stands at $13 billion.

"Desk managers at the Fund once micromanaged 50 different economies. But those days are now gone," writes Carnegie Mellon professor Adam Lerrick in WSJ.

So will the Economic Hit Man be able to rest peacefully in retirement? Has he put the IMF out of business? Not quite.

"...there is no talk of retrenchment . Instead, the Fund seeks to become the arbiter of global exchange rates and the arbitrator of economic disputes between nations -- grandiose positions that are not needed, wanted nor enforceable in the world economy. And the IMF seeks a new wellspring of funding to support the expansive lifestyle to which it has become accustomed," writes Lerrick.

Arbiter of global exchange rates? Not good.

The IMF is eyeing its stash of gold to fund its grandiose schemes. Writes Lerrick:


the IMF's basement... 103 million ounces in ingots...left behind from the days of the gold standard. Each ounce, deposited by member countries at $35, is now worth $650, creating a constant temptation for Funders. Selling this resource rather than leaving it in the basement would yield a gain of $60 billion and an investment income of $3 billion a year... Committee emerged with a proposal to use 13 million ounces, or an eighth of the gold stockpile, to establish an IMF endowment, an independent income stream for the Fund in perpetuity.

But this isn't really the IMF's gold. The bullion belongs to the U.S., Germany, Brazil, Ghana and other nations. More than one-quarter of it belongs to developing countries. If the IMF is allowed to open the door to this vault, fears of new missions and unrestrained spending will be confirmed. The gold and the gain it can bring should be returned to national treasuries.
What would happen to the price of gold if the IMF tried to sell its stash? 103 million ounces is roughly 3,200 tons of gold. 13 million ounces is roughly 400 tons of gold.

The signatories of the Central Bank Gold Agreement have agreed to limit their gold sales to 500 tons per year. The agreement thus allows for 2,500 tons of gold sales by the signers over the 5 year period of the agreement.

Thus, the IMF with its 3,200 tons of gold has the potential to do some impact selling if they so choose. Will they sell all of their gold? No. Will they sell some of it? Possibly.

Will they sell it slowly in a sensible manner, if they do decide to sell some? Who knows? You really have to wonder about a group that sees its new role as "arbiter of global exchange rates." Will they decide to be arbiter of the gold price as part of that role?

It may be time for the Economic Hit Man to come out of retirement. He obviously has more work to do.
Labels: gold, IMF

posted by Raymond Weber @ 10:12 AM

Kudos to the Bolivians for standing up against them both for trying to privatize their water. All their water.

Refinancing their loans so the borrowers get out of their clutches and terms and into good economic shape. Another reason to love Chavez!

Perhaps he'll leave office before ultimate power corrupts.

That's why, before Chavez, the government was able to kill a couple thousand people in a protest over raising the price of bus fare.

And it's why the people were able to reverse a coup against Chavez after he became president.

permalink here:

http://www.economicpolicymonitor.com/2007/04/did-economic-hit-man-takeout-imf.html

I admit I haven't read Perkins books. I've heard many interviews with him on Amy Goodman's Democracy Now, and read some excerpts from his books and commentary on them on other blogs, and there's something fishy about him.

For one thing, he has a whole other line of books about shapeshifting. He teaches workshops in shapeshifting and says basically, you can turn yourself into a jaguar on a cellular level like South American native shamans. He claims to have cured a friend, dying of fluid on the lungs, with magical orbs that turned into bats that flew into her body and drank the fluid.

That in itself wouldn't cause me to automatically dismiss him, but there are a few other things.

He says he was recruited by the NSA to be an economic hitman. But the NSA is involved in signals intelligence. I could see if he had said the CIA, but the NSA?

I also question the term "economic hitman." He says it is widely used. I've worked on the fringes of the international development bank system, and I've never heard the term used.

He also doesn't seem to understand, or if he does understand doesn't make clear, the difference between the World Bank and the IMF. They are very, very different institutions, with very different roles. The World Bank is much more liberal and has done some good things, even though they have screwed up a lot of other things. For example, Joseph Stigletz, who has emerged as a great critic of globalization and the IMF was the chief economist of the World Bank, and blames the IMF much more than the WB.

Something just doesn't add up about Perkins.