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To: Jacob Snyder who wrote (139986)	12/22/2001 9:26:48 AM
From: Terry Maloney	Respond to of 436258

Doug Noland's latest has a slightly different take on the IMF: In developments indicative of deep global structural financial problems, we are now watching the largest U.S. bankruptcy being followed immediately by what will be the world’s largest debt default. From today’s Wall Street Journal: “In a striking contrast with his predecessors, (Treasury Secretary O’Neill) said he wasn’t even talking to Argentine officials this week and referred most questions about the situation to the IMF. Reminded that Mr. Clinton’s Treasury would have been in more constant contact, Mr. O’Neill replied: ‘They also would have been in there giving them money -- endlessly.’” I am not necessarily supporting previous policies, but has the pendulum swung so far back in the other direction that “policy” has regressed to U.S. politicians doing their best to distance themselves from a significant regional neighbor working desperately to forestall financial and economic collapse? And doesn’t it count for anything that Argentina placed its future with an exalted currency board regime tied to the U.S. dollar, and that enormous government, corporate and household debt were then denominated in the U.S. currency? Watching this terrible death spiral unfold over many months has been as sad as it has been maddening. What, then, is the current-day function of the IMF if it is not to work arduously to assist a country such as Argentina from descending into deadly chaos and anarchy? And does the U.S. Treasury and Federal Reserve now take no leadership role or global financial responsibility for a dysfunctional global financial system that it largely created and for which it irresponsibly manages the “world’s reserve currency”? Maybe I am going off on a rant here, but whose decision was it to completely abandon the international lender of last resort mechanism, anyway? And while folks on Wall Street and within the beltway are blessing their stars at the lack of contagion effects, history will look back and see the Argentine collapse as one more critical blow to a vulnerable and faltering global financial system. prudentbear.com