G20 Gets Set For A Wave of Countries Going Bankrupt Posted on April 03rd, 2009 in World Crisis

from: Left Banker

In an incredible admission that a wave of countries from the periphery of the European Union to emerging markets to Eastern Europe to major countries such as the UK, the G20 has quadrupled the size of the International Monetary Fund to an incredible $1 trillion.

This fund will be used to bail out bankrupt countries and their financial systems. The funds come from the member countries. This money will be raised through future tax increases and the issuing of government debt – although the latter will prove difficult given the lack of success of recent government bond sales globally. This raises the spectre of raging inflation, as was experienced in the 1930s, with this level of money being literally printed.

The money will not be used to create jobs but to bail out collapsing economies and financial systems. In the long run the mass of ordinary people will pick up the final bill.

A report issued by the Organization for Economic Cooperation and Development (OECD) shows the depth of the crisis of capitalism and it expects the 30 major economies to shrink by 4.3% in 2009 and unemployment to reach an incredible 36 million in the same countries. They are predicting that we are half way to a global depression (10% shrinkage of an economy).

In addition the G20 are pumping $100 billion into the World Bank to bail out the poorest countries with the usual strings attached to such aid and another $250 billion to help world trade which is collapsing – for example Japanese exports are down 50% in one month

Many of the G20 members may renege on their commitments to contribute to the $1 trillion plus pot as they are faced with further bailouts of their own financial system and industries.

The world is literally facing bankruptcy in 2009. Capitalism is not only bankrupt as a system put looks set to try and take us all down with it.