Saturday, May 10, 2014

Voice of Russia Attacks IMF loan conditions

This article clearly shows that virtually all hope of finding agreement within the IMF has broken down.

It appears to us that the breakdown in relations between Russia and the US is becoming so deep that any chance for the IMF to become the place where all the parties come together is evaporating. 

We have been following news story after news story where we see the BRIC nations moving forward with their own version of the IMF and World Bank. The stalled IMF reforms were one thing motivating them. But now it seems like the conflict over who will gain influence in the Ukraine has removed any chance for cooperation within the IMF. 

Below is a quote from the final paragraph of the article linked above:

"The Fund's action highlight the need to establish a new, BRICS-sponsored financial institution that could provide a viable alternative to the IMF and also explains why Washington does its best to keep the IMF under its full control. The Fund pays for war crimes and should be therefore considered a criminal organization. The IMF has crossed the ultimate red line."

We now have an article in the Voice of Russia stating the IMF "pays for war crimes and should therefore be considered a criminal organization." and "The IMF has crossed the ultimate red line."

I don't see much chance of a happy ending between the BRIC nations and the US led western nations within the IMF with that kind of rhetoric. Unless something dramatic changes, it appears the BRIC's are just going to move forward on their own as quickly as they can. 

And things could certainly ramp up and get worse based on how things are headed right now.
Not that long ago Putin was calling on the IMF to help resolve the Ukraine situation.

How this turns out will clearly impact the US dollar at some point and is the most critical thing we have to keep watching here

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