Ukraine's poorest and most vulnerable will pay
The IMF noose demands that loans be allocated for specific purposes in exchange for tough reforms of the whole economy. The main requirements of the 'institution' are to cut social spending, which always inordinately effects the most vulnerable and poorest in the society, and privatize publicly owned assets like some of the best agricultural land in the world and huge proven fossil fuel reserves.
The initial IMF loan less than a year ago, a loan the former elected president rejected, of 15bn was bumped up to 18bn. As everyone except the delusional in Kiev expected, Ukraine is already broke and the noose tightens. Yesterday Kiev confirmed that the IMF aid package conditions mean Ukraine gas prices must go up 280% and that as a result inflation could be 25-26 percent by the end of 2015.
Where once the armies of resource depleted empires conquered and slaughtered to secure those resources and expand the empire's domain, now the empire unleashes it's phoney money and debt. As Charles Hugh Smith explained the details of the scam on his blog recently but stopped short of condemning the outright imperialist goals of the US that determine the IMF's policies. Policies where the common assets of the debtor nations are the target of the 'loan to pay off the last loan' scam. All the loans are credit and fiat currency - thin air mixed with paper - but the assets that secure the loan as part of 'conditionality' are real wealth like Ukraine's soil or oil and gas reserves.
One year ago today The Mud Report asked: 'Why is Ukraine, Once Again, Where Continents, Cultures and Empires Collide?' and answered: 'Follow the Money'. Unfortunately Ukrane has taken every possible wrong turn in the last year, in every direction, including their now total subservience to the IMF and their henchmen. Ukraine is a colony of the Empire of Debt, the plunder of their natural wealth and common assets will ensue as soon as those pesky Russian supplied rebels are squashed.
The IMF program crushes the poor to plunder resources and expand the empire. The odds of the poor somehow rising up to crush the rich is beyond hope, but the idea that the combination of people in personal debt over their heads who can't borrow/spend more and the growing hoards of fear filled folks who aren't spending on needless crap, is creating deflationary trends around the world, and it is causing the velocity of money to plummet.
The poor can't overthrow the Bankers and Billionaires Club but the global middle classes can just by turning down their consumption spigot a bit...and they are. Deflation can turn debts, big or small, upside down, non-violently, with a minimum of pain for the many and a pulling back of the Wizard's curtain in Oz and your town too.