THE BLOG

Obsequiousness to Power -- the IMF's to OPEC

Oct 10, 2012 | Updated Dec 10, 2012

In what must be one of the most flagrant abasements of principle and pandering to power, not to speak of a crushing void of good sense, IMF chief Mme. Christine Lagarde spoke in Riyadh earlier this week at the Gulf Cooperation Council. The audience comprised senior officials from Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Bahrain and Oman, the lead battalion of the malign oil price manipulator, the OPEC cartel:

"It gives me an opportunity to THANK (my emphasis) the GCC countries for their... stabilizing role in the global economy because of the good management of oil prices, and oil reserves..." the managing director of the International Monetary Fund said.

These paeans to a coven of producers who managed to help manipulate a price increase of some 20% since their last meeting this June alone, in spite of the difficult economic realities throughout the world other, of course, than those of the Persian Gulf States. The issues of economic stress throughout the world were highlighted by dire warnings emanating from the very same IMF within days of Mme. Lagarde's rite of absolution in Riyadh.

Mme Lagarde, in one fell swoop legitimized the outrageous manipulation of the OPEC mafia that is stripping economies around the world of hundreds of billions of dollars. Some time ago we were piously told by that OPEC don Ali al-Naimi, who speaking on behalf of his King Abdullah, instructed us that $75 a barrel was a fair price. Today the price for Brent crude is $114/bbl, a price that brings hosannas of praise from Mme. Lagarde and carte blanche for even higher prices. She then complimented the her assembled audience for their "good management" with Saudi Arabia alone having produced 9.8 million barrels/day of oil last month; this with an installed production capacity which is now 12.5 million barrels/day, a difference that in and of itself exceeds Iranian daily oil exports in the best of times.

Perhaps we should take Mme. Lagarde's effusiveness to heart and learn from her standards. If one of the world's most prestigious international institutions can render such homage to brazen price conspirators, we should act accordingly. Immediately Congress should move to restrict the export of corn, wheat, and soybeans (the U.S. is the largest world supplier of corn and wheat and the second largest of soybeans) placing responsibility with a single export agency whose aim would be to enlist other major grain exporting countries such as Canada, Brazil, Argentina, Australia, Ukraine, France to collude in restricting production and exports, to force up prices to margins enjoyed by the OPEC producers. Russia, an important producer as well needn't join, but as with OPEC, becoming a member in spirit, given its vast oil riches.

And when the first formal meeting of GEPO (Grain Export Producers Organization) is organized Mme. Lagarde should be invited to address the assembled member states to extend to them her and the IMF's blessing. Amen!