An international answer to a Leader’s prayers

This was the week when UK spin was exported to the Leaders of the world.

All were made to sing from the same soothing hymn sheet. “This is a global problem (Well that’s all right then, I wasn’t to blame, nor was my country).

We need global solutions (Phew, that saves me having to do something and take the blame).

We need more global regulation ( memo – let’s make sure they can’t boss us around – no need to disagree yet. There’s no actual rules or rule makers set out in this document).

The world needs a $1 trillion package (sounds like a lot of money, shows how important we all are, good job it’s borrowed as I couldn’t justify this spending back home) .

We will resist protectionism( We always say that but we never shop each other doing the opposite)

We don’t like hedge funds, bankers, tax havens, spam sandwiches…(fill in anything else you don’t like so we have an agreement) (That means I can go home and claim a negotiating triumph because I promised to root out the spam sandwich)

We can all go off to the IMF and borrow some more (Sounds like a great idea – I have an election coming up. I do hope I can spend those SDRs on making myself a bit less unpopular)

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8 Comments

  1. Ian Jones
    Posted April 5, 2009 at 8:29 am | Permalink

    If I understand it correctly, the IMF SDR is just another way of printing money in another currency. Especially when the Governor has said he wont print anymore than £150bn (how kind).

    So Gordon will use this to print cash and spend rather than the Bank of England. The guy is a total maniac and must be stopped. Surely Labour MP’s must know this? Are they prepared to have their name forever remembered for bankrupting the country?

    I hope Alistair Darling can see this?

    • Denis Cooper
      Posted April 5, 2009 at 9:23 pm | Permalink

      SDR’s are explained here:

      http://www.imf.org/external/np/exr/facts/sdr.htm

      but even after reading this several times I still don’t fully understand it.

      However –

      “The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members.”

      So I’m not sure that a new allocation amounts to “international quantitative easing”, as some journalists would have it.

      Reply: Yes, it’s a facility a member state can draw on and switch into other currencies. It then becomes a loan

      • Denis Cooper
        Posted April 6, 2009 at 9:27 am | Permalink

        So, as I understand, the IMF provides a mechanism for one country to borrow existing money from the other countries, rather than for example negotiating a bilateral loan, and no new money is ever created unless a national central bank creates it.

        Therefore a new general allocation of SDR’s merely increases the scope for each country to borrow relatively small sums from the other countries, easily and quickly, before it gets to the point of having to request a special loan.

        The closest, but still imperfect, analogy might be with a bank deciding to increase all its customers’ limits for unarranged overdrafts.

        In our case, 5% of $250 billion is $12.5 billion, presently equivalent to about £8 billion, and that would be the increase in our limit.

  2. mikestallard
    Posted April 5, 2009 at 8:35 am | Permalink

    One of the most powerful weapons in the “liberal” leftie’s armoury ascending, very rapidly, to the high ground. How many times have I seen that pained expression and the slightly lifted left upper lip?

    Well, now let me adopt that very position.
    Ready? Lip up! Eyes looking sadly at you…….

    Hurting poor people is wrong, wrong, wrong.
    It is absolutely against anything in the Jewish Old Testament, where, if you take a poor man’s cloak in pledge, you have to return it in the same evening. Where you must pay journeymen the very same day.
    It is also wrong in Islam to hurt poor believers. The Prophet went out of his way to protect widows and maltreated wives and orphans, for instance.
    Jesus (Holy Week) spent just as much time with poor people (foxes have holes etc) as with rich.
    Jeremy Bentham would not have approved of hurting the poor.
    Marx would not have approved.
    Stalin would not have approved.
    Point made?

    So anyone who plunges the poor into debt when they have not even been consulted is wrong, wrong, wrong.
    Not So?

    If you cannot see that, you need help. It is totally unacceptable. etc etc.
    Or perhaps Mr Brown actually believes that the rich will pay the debt of 4.5 TRILLION pounds off?

  3. Brian Tomkinson
    Posted April 5, 2009 at 8:45 am | Permalink

    Just what was actually going on at the G20 we shall discover, no doubt to our cost, at a future date. These people are like a convention of conjurers adept at distracting the audience whilst they perform their “magic”.

  4. ManicBeancounter
    Posted April 5, 2009 at 2:18 pm | Permalink

    The pschology of the G20 seems a less extreme version of a group of alcoholics meeting for up to swap stories of their problems over a few pints at the local pub. There you would hear a lot of stories about people being victims of circumstance, and saying they will cut back, but not one recognising their own addiction.

    We might need the equivalent of “alcoholics anonymous” being launched for world leaders & finance ministers. You don’t become a political leader craving anonimity. Also it would need a reformed, well-respected, former debt-addicted leader to found such an organisation. Problem is, I cannot think of any former leader who, having lead their country to financial ruin, is still respected.

    • mikestallard
      Posted April 5, 2009 at 4:16 pm | Permalink

      Mao Tse Tung?

  5. Adrian Peirson
    Posted April 5, 2009 at 4:34 pm | Permalink

    Why do you never use the C word or even the F word to describe Labour In Parliament Mr Redwood.

    No not those ones, I mean Communists and Fabian Socialists.

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    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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