• 388 days Could Crypto Overtake Traditional Investment?
  • 393 days Americans Still Quitting Jobs At Record Pace
  • 395 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 398 days Is The Dollar Too Strong?
  • 398 days Big Tech Disappoints Investors on Earnings Calls
  • 399 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 401 days China Is Quietly Trying To Distance Itself From Russia
  • 401 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 405 days Crypto Investors Won Big In 2021
  • 405 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 406 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 408 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 409 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 412 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 413 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 413 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 415 days Are NFTs About To Take Over Gaming?
  • 416 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 419 days What’s Causing Inflation In The United States?
  • 420 days Intel Joins Russian Exodus as Chip Shortage Digs In
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

  1. Home
  2. Markets
  3. Other

IMF Fears $3 Trillion Credit Crunch; Lagarde Says 'IMF Credibility at Stake', Calls for US to Give China More Voting Power

IMF head Christine Lagarde says "IMF credibility is at stake". She blames the US for that development, and calls on US to give more voting power to China to solve the problem.

Credibility?

I have a simple question: Precisely what credibility does the IMF have?

To address my simple question, please consider the ZeroHedge report This Is How The IMF "Predicted" China's Slowdown

As the following chart compiling the IMF's various quarterly economic forecasts over the past 5 years clearly shows, what the IMF had actually forecast, was a constant hockeystick rebound in China growth starting in 2011... until 2014 when the monetary fund finally gave up.

IMF's Revision of China Growth


Credibility Recovery

In a "credibility boosting" exercise Zerohedge comments ...

"The IMF's forecast of China's growth after the fact is now so negative, it is well below the consensus projections, as the IMF is all too happy to boast ..."

China Real GDP Forecasts


Ta-Da!

The IMF's credibility has been magically restored by impressive revisionist history. But as we see today, that credibility is once again at stake.


3 Trillion Credit Crunch Coming Up

Meanwhile, please note the IMF is concerned that a $3 Trillion Corporate Credit Crunch Looms as Debtors Face Day of Reckoning.

Governments and central banks risk tipping the world into a fresh financial crisis, the International Monetary Fund has warned, as it called time on a corporate debt binge in the developing world.

Emerging market companies have "over-borrowed" by $3 trillion in the last decade, reflecting a quadrupling of private sector debt between 2004 and 2014, found the IMF's Global Financial Stability Report.

This dangerous over-leveraging now threatens to unleash a wave of defaults that will imperil an already weak global economy, said stark findings from the IMF's twice yearly report.


Mercy!

Q. How did this happen?

A. The answer of course is corporations took on insane amounts of debts precisely as central banks and the IMF wanted them to do.

Q. Why did the IMF and central banks encourage this debt?

A. To help stimulate the global economy.

Q. Did it work?

A. Obviously not.

Q. So why do they think still more debt will fix a problem caused by debt?

A. You tell me.


Mish Proposal

If the IMF wants China in the name of credibility, please let them have it.

In return, I ask one simple thing: The US cuts off all IMF funding, as it should have done long ago.

 

Back to homepage

Leave a comment

Leave a comment