Friday, March 14, 2008

It's not your money anymore

Didn't you know that? In the deepening worldwide financial crisis, the deputy of the International Monetary Fund announced today that in order to to shore up the financial institutions, for the good of everyone, thay just may have to grab your money. Just like that. Really. I am not making this up.

IMF tells states to plan for the worst
Financial Times of London
By Krishna Guha in Washington

"Governments might have to intervene with taxpayers’ money to shore up the financial system and prevent a “downward credit spiral” from taking hold, the International Monetary Fund said on Wednesday."

"John Lipsky, the IMF’s first deputy managing director, said: “We must keep all options on the table, including the potential use of public funds to safeguard the financial system.”

"IMF deputy managing director’s comments make it clear that the fund is open in principle to the possibility of taxpayer-funded intervention in the market for mortgage securities as well as intervention to save individual banks from bankruptcy. Mr Lipsky warned: “The risks of further escalation of this crisis are rising and decisive policy action will be needed.”

He said this crisis was different from recent past crises because both the financial markets and the banking system “have faltered simultaneously.” The first priority had to be to reverse the “spreading strains” in global financial markets and restore the functioning of the financial system in advanced economies."

Now, there is some debate among the tiny pinheads like me that 'taxpayer money' means 'already paid into public funds like transportation accounts' or if it means dipping into deposit liquidity in individual banks. Likely the former, but either way, it's not good.

I love the carefully couched euphemisms, particularly 'spreading strains.' In laymen's terms it means: "we're cooked."

No comments: