This article by The Hill is further evidence that pressure to get the US Congress to pass the 2010 IMF reforms is ramping up. Here are some quotes, then my added comments.
"Sometimes a crisis can usefully clarify things. So it is that events in Ukraine have given new focus to the Obama administration’s long frustrated efforts to get Congress to approve the 2010 IMF quota reform package."
"... events in Ukraine provide a clear and immediate answer to the question of why Capitol Hill should care about the IMF. The fund’s role here follows a familiar but compelling script for the United States. A strategically important country experiences a political and economic crisis. The United States and its allies worry about the influence of unfriendly actors in the midst of this instability and move quickly to mobilize a sizeable financial package to shore up pro-western elements in the country."
"And this is where the IMF comes in. Secretary Kerry and the White House are making the most of the $1 billion in bilateral loan guarantees on offer to Ukraine, but the fact is, this amount looks pretty meager compared to the $15 billion Ukraine’s interim government is now seeking from the IMF. This is a scale of assistance that the U.S. simply can’t muster on its own. Hence, the IMF’s role as a critically important strategic partner to the U.S. and its allies becomes immediately clear."
" US inaction on quota reform has created a vacuum within the IMF that Russia seems poised to exploit. President Putin has already expressed interest in working with the IMF on Ukraine, a seemingly friendly gesture that belies his underlying motivations."
my added comments:
readers of this blog will not find any of the above surprising. we have become more and more convinced that this IMF reform proposal is the real key behind the events in the Ukraine. Why you ask? We think that this reform package is the first step to open the door for the IMF to become much more involved when the next global financial crisis arises. We think they are likely working on solutions to that crisis right now.
An expansion of IMF reserves and more influence by the BRIC nations may be keys to how the next crisis will be addressed. We think gold will be involved as well. We expect to have more on this later this year. If our speculation is correct, people may be surprised at how all this eventually plays out. It may be awhile before things go public though; so we will just keep it in mind for now. Hold that thought as they say.
Addendum 5:30 pm - In case you still don't think this IMF reform package matters, here is the latest. A deal in the works to get the House to go along with the IMF reform package. The deal would trade approval by the House for the IMF reforms in exchange for dropping an IRS proposal to curb political activity by tax exempt groups. We'll keep watching it.