The IMF Talks About The Big C

Recent events have made it very clear that America is incapable of making the necessary reforms to avoid its looming debt/currency crisis. Avoiding making the tough reforms now will only make the reforms  more severe when they are forced upon the nation and the world in the not-too-distant future. These severe reforms will involve a lot of pain to the vast majority of Americans and citizens throughout the world who will be forced to partake in them because they are unaware of what is going on and as a result have not prepared for what is coming. Wealth confiscation will be one of the required reforms or tools to deal with this crisis.

The ground is being prepared by various governments and the IMF--the epitome of free markets supporters, said sarcastically -- for wealth confiscation in America and in the rest of the world. In America, wealth was confiscated during the Great Depression and recently there has been talk and preparation for confiscating retirement accounts and laying the foundation for bail-ins; and in the rest of the world you have plenty of recent examples of wealth confiscation in Argentina, Cyprus, and Poland. Additionally, you have a plethora of examples in history where bankrupt governments have confiscated the wealth of their citizens.


The IMF is aware of the economic situation the world finds itself in and the inevitable need for wealth confiscation and massive tax increases. As Forbes magazine points out, the IMF recently:

The International Monetary Fund (IMF) quietly dropped a bomb in its October Fiscal Monitor Report. Titled “Taxing Times,” the report paints a dire picture for advanced economies with high debts that fail to aggressively “mobilize domestic revenue.” It goes on to build a case for drastic measures and recommends a series of escalating income and consumption tax increases culminating in the direct confiscation of assets. 

The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”— a one-off tax on private wealth—as an exceptional measure to restore debt sustainability. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair). … The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away. … The tax rates needed to bring down public debt to precrisis levels, moreover, are sizable: reducing debt ratios to end-2007 levels would require (for a sample of 15 euro area countries) a tax rate of about 10 percent on households with positive net wealth. (page 49)

You can read the report here. At pg. 40 the IMF laments the fact that wealth is mobile and then it talks about the need to tax wealth differently according to how mobile it is: 

The modern history of recurrent wealth taxes, however, is not encouraging. Relief and exemptions—for land, for instance, and family-owned businesses—creep in, creating avoidance opportunities, as do ferociously complex aspects of the legalities (in dealing with trusts, for instance). Financial wealth is mobile, and so, ultimately, are people—generating tax competition that largely explains the erosion of these taxes. There may be a case for taxing different forms of wealth differently according to their mobility—meaning a higher rate on nonfinancial wealth (largely real estate) than financial. In fact, it appears that both forms of wealth are quite large (Figure 23) and, perhaps surprisingly, that nonfinancial assets are very important for the very wealthy (Table 13). Substantial progress likely requires enhanced international cooperation to make it harder for the very well-off to evade taxation by placing funds elsewhere and simply failing to report as their own tax authorities in principle require"  pg. 40

The report is revealing and provides a glimpse of what to expect in the not-too-distant future. What does this mean for you? If you don't educate yourself and plan accordingly, you can expect to loose a significant portion of your savings, retirement, and other assets through direct confiscation and/or indirect confiscation through currency debasement and inflation. History provides a detailed map of what to expect regarding wealth confiscation. The writing in on the wall. 

A Federal Europe By The Back Door

Here is clip in honor of the late Margaret Thatcher who warned against the Euro.

And here is a clip of Nigel Farage speaking the truth about the European Union and discussing the recent wealth confiscation of the people of Cyprus. (This is a portent of what will happen in the next economic crisis here and around the world.)

The current economic crisis in the EU was predicted by some of the finance ministers of the various European nations that signed up for the Euro. They had wanted to create a political and economic union that would have created a united states of Europe. They couldn't get the political union by consent of the European people, so they settled for an unsustainable economic union that would force the political union on the people of Europe through an economic crisis:

  "On 1 January 1999, with the introduction of the an important part of national sovereignty, to wit monetary sovereignty, was passed over to a European institution...The introduction of a common currency is not primarily an economic, but rather a sovereign and thus eminently political act...political union must be our lodestar from now on: it is the logical follow-on from Economic and Monetary Union,” then German foreign minister Joschka Fischer told European Union lawmakers just days after the introduction of the euro in 1999.
Fischer was not alone, with many of the founding members of the euro zone making it clear that the single currency was significant as a stepping stone to political union.

"The single currency is the greatest abandonment of sovereignty since the foundation of the European Community...it is a decision of an essentially political nature. We need this United Europe...we must never forget that the euro is an instrument for this project” said Felipe Gonzalez, then Spanish prime minister. Even those who opposed the idea and refused to join agreed that the euro had little to do with economics.

"A single currency is about the politics of Europe. It is about a Federal Europe by the back door,” John Major, the former U.K. prime minister, said two years before the euro was born and six months before being routed at the polls by Tony Blair.

Historian Niall Ferguson wrote in this weekend’s Sunday Times that the euro’s founding fathers were well aware that the introduction of the euro would lead us to a crisis very like this one. [Emphasis is mine.]

Vladimir Bukovsky states that the European union is the new Soviet Union:

The European Union is template for the coming world government that will be forced upon the people of the world in the coming economic crisis.

The World Bank Makes Recommedations To China

I have plans to do a more in depth post on the IMF and World Bank and how they promote socialism and state-dominated economies under the guise of free market language. In the mean time I will do a short post that illustrates, to an extent, this point. I readily admit that the stated goals of the IMF and World Bank do make it sound as if their policies are promoting free markets; but when you examine more closely their recommendations you can see that they do not advocate nor promote free markets but instead promote a state-controlled economic system where the state uses the market mechanism to advance its agendas and goals. Part of this is using state control in the form of market incentives, like carbon taxes, to promote sectors of the economy that the state deems worthy to be promoted . This is opposed to a free market system where the market is the entity determining which sectors will dominate. A perfect example that illustrates this point is the recent report by the World Bank that forecasts that the China will become the world largest economy before the year 2030 and make recommendations on how the Chinese should reform their economy:

China must relax its grip on industry and move towards a free-market economy, the World Bank said on Monday in a report that forecast the country would become the world's largest economy before 2030.[...]
An executive summary of the 400-plus page report, made public by Zoellick, had six broad recommendations for Beijing: strengthen a market-based economy, foster innovation, go "green", provide social security for all, improve the fiscal system and seek mutually beneficial relations with the world.

I know that "move towards a free-market" might take our breath away and make us go out and be cheer leaders for the World Bank. Just like saving the environment makes us want to support the environmental movement. But we have to look more closely at the issue. One thing that caught my eye was the "go green" statement. The world bank has bought in to the lie of man-made climate change: "Fifth, while China’s green development strategy is driven almost entirely by domestic considerations, it will make a significant contribution to tackling global climate change." As has been noted before, the green movement is not about saving the environment but is rather about advancing communism and socialism and that there is no man- made climate change. When you take a closer look at at the specifics of the World Bank's recommendations( around page 39), it appears that the belief in man-made climate change is being used to promote a government-led economic system and not a free market system:

A key goal of using market incentives is to harness the creativity and entrepreneurial energy of China’s private sector and state enterprises to protect the environment and turn China’s green industries into an important source of growth by making them world-class innovators and competitors. Market incentives are also the best way to foster efficiency, which, in the case of green development, goes beyond financial efficiency to include resource use efficiency and the reduction of environmental externalities. [...]

Instead, the government should consider market mechanisms such as taxes, fees, tradable permits, tradable quotas, and eco-labeling. In degraded ecosystems, rehabilitation is warranted, especially through expanded payments for ecological services in poor and ecologically important rural areas (for example, upriver watershedsor downriver flood plains).

There is no better place to begin than by ensuring that market prices of goods and services reflect the true cost of production and consumption to society. For example, the price of oil, water, coal, and other natural resources should include a tax to reflect the social and environmental costs incurred with their use. Complementary actions would involve removing direct and indirect subsidies, raising pollution taxes, and canceling export tax rebates for high-pollution, high emissions, and resource-intensive industries. (Indeed, export targets for these industries should also be curtailed, if not abolished altogether.)[...]

Given the global push on climate mitigation, the most effective way for China to establish itself as a global green technology leader is by implementing stringent and effective policies to reduce greenhouse gas emissions and to internalize the cost of carbon emissions in the operating costs of enterprises. Stringent emissions reduction policies, achieved through such diverse market mechanisms as carbon trading, a carbon tax on fuels, technology standards, and regional carbon partnerships, can act as a powerful mobilizing force for innovation in green technologies. This, in turn, will help lower economic costs associated with improving the quality of the environment and help drive overall growth.[...]

To mobilize collective action on environmental protection and climate change, the
government needs to launch mass education campaigns to increase public awareness of these issues and the actions that individuals and households can take to contribute
toward the national effort. China can make emissions reduction and environmental protection a desirable lifestyle, thereby increasing market demand for green products. To do so, it could mobilize nongovernmental organizations, industry associations and the, media. It can also change consumer behavior by providing better information, through energy efficiency labeling for example.

While these recommendations sound good--externalize costs, internalization cost, using market incentives, carbon tax, and etc.-- and even seem like they are promoting the free market, they do not promote the free market and they are not free market based. They instead advocate the state functioning as the mechanism which determines the economic sectors that are to be dominate and how scarce resources are to be utilized.

Communism has proven to be a failed economic system and those that advocate for the communist economic system are no longer advocating for the old version of communism with total state control over the economy, but instead are advocating for more of a fascist economic model where the state determines how scare resources are to be allocated for the purpose of advancing the goals and agenda of the state--usually social justice or environmental justice. It is yet to be seen if the Chinese government will actually listen to the advice of the World Bank, but the main point to take away from this is that the World Bank does not an advocate for free markets. The World Bank and the IMF that were created out of the Bretton Woods conference are evolving into a world central bank that will issue a single currency, just as its founder Keynes had envisioned. A world-socialist-economic system with international organizations like the IMF and World Bank functioning as a world central bank is being created before our eyes.