Greece Pays IMF Back with IMF Monopoly Money

This is great! I love it. It’s so insane even I didn’t think of this. So apparently, all IMF countries have this account of IMF monopoly money, its own IMF currency, that is actually the IMF’s money that I guess can be exchanged for currency at an agreed exchange rate upon joining the loot ball.

The money can be used in emergencies as effectively an IMF loan, and must be replenished within 30 days (June 11) by the IMF rules. I would guess the funds are supposed to be used for emergency defense, or natural disasters or whatever. But Greece drew down €650M in IMF monopoly money to repay…

the IMF itself.

As Zerohedge puts it:

In sum: the IMF paid itself on behalf of Greece and will now be forced to pay itself back for paying itself later this month. Or, put differently, Greece has prepaid the IMF with IMF money it doesnt have.

This isn’t any more crazy, really, than the idea of the IMF bailing out Greece so Greece can pay the IMF.

Here’s a piece out this morning even more instructive of the Klein Bottle of finance that the Greek State just did:

Earlier today, we learned that, contrary to what Greek government officials had been implying for the better part of a week, Athens did not have enough money to make a €750 million payment to the IMF on Tuesday. Instead, Greece borrowed most of the money (€650 million according to unnamed officials) from its IMF SDR reserves. This money must be paid back within 30 days. This effectively means that the IMF paid itself and it sets up a hilariously absurd scenario wherein assuming Greece manages to convince creditors to disburse a €7.2 billion tranche of aid later this month, the IMF will send money to Greece, who will send it right back to the IMF to replenish an IMF fund, which was drawn down by the IMF to pay itself back for money it loaned to Greece a long time ago. Put simply: Greece has taken circular funding schemes to a whole new level.

But that’s it though. Greece has about €50M in cash left, and after that, it’s game over people. The IMF has said it is not going to participate in another Greek bailout just so it can pay itself for even longer. By the end of the month, the first domino, finally, falls, and the chain reaction begins.

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3 thoughts on “Greece Pays IMF Back with IMF Monopoly Money

  1. Is this the SDR (Special Drawing Right) rate? (named also XDR in exchange charts)? SDR vs. euro has been increasing lately (more euros / SDR) which means euro values less and less in front of SDR. SDR is defined as the sum of euro+dollar+sterling pound+yen reported to the US dollar. Now I see why you said it’s self-reflective – it’s defined by the dollar in part and reported to the dollar.
    In 1969 instead of euro was the very strong Deutsche Mark and the weak French coin.
    The way I see it IMF needs to keep fairly up all of these four coins and the US dollar so the SDR values something.
    In 1969 SDR/XAU(gold) = 0.88.
    Today (18.05.2015) SDR/XAU = 0.035 (I interpreted through exchange rates for euro and dollar) or officially on market 0.001 (here: http://www.likeforex.com/currency-converter/gold-ounce-xau_xdr-special-drawing-right-sdr.htm/1)
    I now see fully what you mean.
    I’m not gonna pretend that SDR didn’t help along the past decades people to feel safe and govts to make certain plans come true. I would say it sponsored the happiness of the hippie dream!
    Maybe it was doomed from the start or maybe it’s cruelty of fate or maybe it’s the murderous incompetence of people abusing it. I think it deserves a nice epilogue about good intentions and pavement and the heat.
    R.i.p.

      • I thought about it seriously after feeling pushed towards this issue, I googled the sites and also some voices in my head as I told you.. Maybe this means other stuff is real too from my hunches, but the point is Thank You for saying this to me. You are kind. If I said things useful to other people regarding spiritual stuff I also got some offensive replies that floored my faith in the human spirit and in myself. But now I see not all hopes are in vain.

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