Sunday, July 18, 2010

IMF looking for cash?

With a lot of 'smoke and mirrors' going on especially with the very nervous central banks of the world and countries particularly China (where transparency is a dirty word); the one thing the market eyes more than anything is funding problems , liquidity and credit problems (both interbank and inter-country). China's banks in the coming months will start to knock on the door of PBoC (People Bank of China) for cash, which would be a clear signal to the markets that China's property market has crashed. However Europe's liquidity problems have entered a uncertain phase, with the European Central Bank absorbing vast amounts of EU debt and commercial paper, more so from Spain. With both the IMF and EU denying more loans to Hungry refer to article: Markets braced for turmoil after IMF and EU withdraw £17bn Hungary financing dea

Now the International Monetary Fund (IMF) is asking is trying to raise capital to the sum of 1000billion. Short from creating their own money (as opposed to the ECB and Fed), the IMF can only sell it's gold (large chunk) as an attempt to re-capitalize:

"The spokesperson, however, declined to elaborate on how much the IMF will increase its lending resources."

Smells funny...

Article here

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