IMF Commitments
Stocks fell today as concern for the US economy was imposed on US stocks. Bonds also increased in value (decrease in interest rates) in sympathy.
The Dollar strengthened – a normal occurrence in times of fear.
Oil, gasoline and gold all went sideways.
In the news today…..
Have you been reading about the Swine Flu epidemic? You should be if you aren’t. This topic is now moving the stock markets as people are anticipating what could happen if an epidemic hits the US. Less spending by the public across the board is the death knell to any economic recovery.
The G20 Finance Ministers (Tim Geithner for us) met this last weekend to talk about funding the IMF as promised by the heads of states recently. Here are two important results, and it’s important that you know them:
1. The US has committed $100B to give to the IMF, as our share of the $500 committed by all nations. President Obama must ask Congress for those funds. Remember that this $100B is YOUR money, and comes from your taxes, or your grandchildren’s taxes in years to come. This should be very controvertial in Congress – but will it be?
2. The IMF is going to sell bonds to raise a ton of money to lend to those poor nations around the world. Those are the nations who don’t pay back their loans, I might add. China has stated they would purchase those bonds. Who pays if those loans are not paid back? You can bet that the US will pay MORE than its fair share. One other very important question is “What currency will those bonds be denominated in?” This is a backdoor way of bypassing the US Dollar as the reserve currency, and please remember that our President said he wouldn’t support a change in the reserve currency.
Here are the last numbers for today:
Dow Jones 30 Industrial – 8025 (down 51 points)
10 Year Treasury Bond – 2.92% (down 0.08%)
Euro – $1.3027
Gold – $908 (down $5)
Oil – $50.11 (down $1.41)
Gasoline – $1.40 (down $0.04)
