Kristalina Georgieva, the International Monetary Fund (IMF) Managing Director at Washington DC, has effectively declared the Bretton Woods financial system set up after the second world war as finished.
“We must seize this new Bretton Woods moment,” she said, “to address some persistent problems like low productivity, slow growth, high inequalities, a looming climate crisis.”
“We have seen global fiscal actions of $12 trillion. Major central banks have expanded balance sheets by $7.5 trillion. These synchronized measures have prevented the destructive macro-financial feedback we saw in previous crises.”
So she argued, with the other side of it being an expectation that 2021 debt levels will go up significantly, “to around 125 percent of GDP in advanced economies, 65 percent of GDP in emerging markets; and 50 percent of GDP in low-income countries.”
The IMF is a government owned global bank of last resort for bankrupt countries which is often criticized for imposing harsh austerity measures.
In this address however Georgieva plays the sweetheart tune, saying we must invest in young people and all the good things.
She does not say what exactly is this new Bretton Woods. Instead she appears to argue for a continuation, stating “what was true at Bretton Woods remains true today.”
So making it quite difficult to read what exactly she is saying, but her idol, and presumably that of IMF, appears to be John Maynard Keynes.
A communist, who strongly believed in centralized power, and argued markets are irrational rather than affected by the government or central bank decisions that lead to artificial booms and busts.
His chief rival was and remains Friedrich Hayek, the Austrian economist who argued if we follow Keynes we will fall into communism.
Keynes argued for more and more state intervention, something that gives IMF more and more power. Hayek argued for market freedom, blaming ill-thought gov...