Thursday, April 22nd, 2010
As you will have no doubt read in the headlines today, the IMF has proposed levying two “global” taxes on the world’s banks to make sure those greedy guys don’t get us into trouble again. If that sounds dubious, it’s because it is. In reality what is being proposed, and has been falling into place for some time, is the framework for an unelected global authority with powers above and beyond those of sovereign governments.
In our featured article today we explain how the IMF’s so called global Financial Activities (FAT) tax on banks is nothing more than a bailout slush fund that would inevitably trickle down to the consumer, and also be levied upon all financial institutions (not just the big ones that commit massive fraud on a daily basis).
This will not prevent globalist bankers from over reaching, it will in fact provide the incentive for more moral hazard by providing built in insurance against risky actions.
Such taxes will drastically reduce the profits of all banks and financial institutions, ensuring only the biggest can continue to thrive. Global competition could be killed off completely, signaling the final nail in the coffin of the free market.
Some within the banking industry also argue that reduced capital in financial institutions makes them a less attractive investment and makes it more likely that governments will have to step in when a fresh crisis hits.
The Association for Financial Markets in Europe issued a statement to this effect: “The IMF has set the right objective in addressing the need to avoid another financial crisis, but appears to have chosen the wrong means to achieve it.
“The financial sector should not rely on public funds in the event of a crisis. As an industry, it needs to put in place measures that will enable failing firms to be wound down or restructured without needing taxpayer support. Banks must be allowed to fail and the cost of dealing with any failure must be first met by shareholders and creditors, not taxpayers.”
Even The Economist has denounced the idea as “Treating the symptoms, not the cause”.
Aside from these issues is another valuable point being made by the banks themselves, as well as economists and commentators – you cannot have global taxes without a powerful enough global authority to enforce them.
Global Consensus Key to Introducing New Levies is the headline in the Korea Times, which notes that without an overarching international framework to oversee global taxation, the idea will struggle to come to fruition.
“Certainly, the recommendation will provide momentum for global discussions on whether to put the idea of this taxation into action.” The report states. “This issue is also expected to be on the top of the agenda during a G-20 meeting of finance ministers and central bankers to be held this weekend in Washington. What’s important is to build a global consensus on this contentious matter.”
The London Telegraph reiterates this key point:
“Both taxes would be tricky to enforce, as bankers were quick to point out. A FAT tax would almost certainly require global co-ordination or face “regulatory arbitrage” by banks moving operations to friendlier territories.”
The IMF is well aware of this problem, outlining in the proposal that unilateral measures “risk being undermined by tax and regulatory arbitrage, and may also jeopardise national industries’ competitiveness”. Coordinated action, it says, would promote a level playing field for cross-border institutions and ease implementation.
The Telegraph article continues:
- A d v e r t i s e m e n t
“The IMF’s idea is for the levy to support a resolution regime that would minimise the need for state support. A resolution agency would determine when a bank was insolvent and ‘replace managers, recognize losses in equity accounts, and, as necessary, expose unsecured creditors to loss’.”
Leading globalists have recently called for further empowering the IMF, as well as the World Bank as global authorities in a new economic world order under a “bank of the world”. This is not a conspiracy theory, it is written in the IMF’s own internal documents, has been reiterated by World Bank President Robert Zoellick, and is the stuff of Washington Post articles.
Last year Zoellick openly spoke of using the economic crisis to give global financial bodies the power to regulate national policy as part of the larger creation of global government.
“If leaders are serious about creating new global responsibilities or governance, let them start by modernising multilateralism to empower the WTO, the IMF, and the World Bank Group to monitor national policies.” Zoellick stated.
In his article under the headline A Bigger, Bolder Role Is Imagined For the IMF – Anthony Faiola of the Washington Post described how the IMF is on course to be transformed into “a veritable United Nations for the global economy.”
Faiola envisages a scenario where “central bankers and finance ministers would meet to convene a financial security council of sorts.”
“Serving almost as ambassadors to the IMF, they would debate ways to put out the world’s economic fires and stifle reckless policies before they ignite new ones.” he continues.
“Bowing to a new economic world order, the IMF would grant fresh powers to the likes of China, India and Brazil. It would have vastly expanded authority to act as a global banker to governments rich and poor. And with more flexibility to effectively print its own money, it would have the ability to inject liquidity into global markets in a way once limited to major central banks, including the U.S. Federal Reserve”
The article then explains that this imagined scenario is taken directly from internal IMF documents, interviews and think-tank reports. The details were thrashed out at the G20 summit in London last year, and though they may take years to fully implement, this model represents the global financial elite’s blueprint for the near future.
Following the G20 summit, the London Telegraph’s international business editor also highlighted the agenda, noting that under a clause in Point 19 of the communiqué issued by the G20 leaders, the IMF’s power to create money outside the control of any sovereign body was activated.
The new reserve currency would be formed from Special Drawing Rights (SDRs), a synthetic paper currency issued by the IMF that has lain dormant for half a century.
“The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity.” Ambrose Evans-Pritchard wrote, quipping that “Conspiracy theorists will love it”.
As we have previously reported, both the IMF and the United Nations have thrown their weight behind proposals to implement this “multilateral” de-facto global financial dictatorship. Both bodies have also expressed support for new world reserve currency system to replace the dollar as part of the acceleration towards the new economic world order.
The introduction of a new global taxation and currency system, with an overarching regulatory body, is a key cornerstone in the move towards global government, centralized control and more power being concentrated into fewer unaccountable hands. The former cannot be fully realised without the latter.
The IMF’s global taxes are part of the ongoing movement to empower a group of unelected central bankers with the authority to usurp state sovereignty by overseeing benchmarks for national financial governance and setting regulations for financial institutions all over the globe.
Currently opposition to the taxes exists in the form of Canada, Australia and Japan, countries all arguing that their banking institutions should not be punished for the failures (should read crimes) of the big banks headquartered in U.S. and Europe.
The proposals for the IMF’s global taxes are set to be debated by the G20 in June.