Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Alex who wrote (18939)	9/15/1998 4:12:00 PM
From: Bucky Katt	Respond to of 116762

Soros calls for global credit insurance agency NEW YORK, Sept 15 International investor George Soros repeated his call for a global credit insurance body and called on the U.S. Congress to authorize increased funding for the International Monetary Fund (IMF). In an article published in Sept. 15 edition of The Wall Street Journal and based on his planned testimony to the House Committee on Banking and Financial Services on Tuesday, Soros said, ''The global capitalist system that has been responsible for our remarkable prosperity is coming apart at the seams.'' Soros, the chairman of Soros Fund Management, said the default of Russian banks on their obligations and the subsequent shutdown of Malaysia's financial markets to foreigners has led to a ''global credit crunch in the making.'' ''The flight of capital has how spread to Brazil and put the rest of Latin America at risk,'' he said. Soros cautioned U.S. policymakers against complacency just because most of the trouble is occurring outside the borders of the United States. He said the global capitalist system involves not only free trade but, even more importantly, the free movement of capital in a ''gigantic circulatory system'' in which capital is sucked up by financial markets and institutions at the center and pumped out to periphery. The Asian crisis reversed the direction of that flow, Soros said. Capital began to flee the periphery, at first to the benefit of the financial markets at the center. The U.S. economy then enjoyed the best of all possible worlds as cheap imports helped to keep inflation in check and stock prices moved to new highs. But Soros said the crisis has reached the point where distress at the periphery is not good for the center. ''The pain at the periphery has become so intense that individual countries have begun to opt out of the capitalist system, or simply fall by the wayside,'' he said. Finally, the programs of the international monetary authorities have not worked and thus, those authorities have been unable to reassure the financial markets, Soros said. To help maintain stability in financial markets, institutions besides the World Bank and the International Monetary Fund (IMF) may be necessary, he said. Soros repeated his proposal for an International Credit Insurance Corp. to establish some kind of supervision over national supervisory authorities. ''At the same time, there remains the urgent need for Congress to authorize an increase in the capital of the IMF,'' he said. Soros also called for the creation of Special Drawing Rights that could be used to guarantee the rollover of the already existing debt of countries that receive the IMF's seal of approval. ''If there is no reward for good behavior, meltdowns and defections will multiply,'' he said. But Soros admitted that such ''radical ideas'' could not even be considered until Congress ''changes its attitude toward international institutions in general and the IMF in particular.'' He is real full of ideas to spend our money......