Yuriy Ukazkin
At the end of the last week the media published Dominique Strauss-Kahn’s statement saying that he was going to leave his post of the IMF’s Managing Director. The statement says that the decision is made in order not to besmirch the financial institution and to focus on proving his innocence.
In the near future the IMF is to hold elections in order to appoint new Managing Director of the Fund. It should be reminded that the First Deputy Managing Director John Lipsky is currently the caretaker. Most investors are focused on the issue. A member of the ECB’s board of directors said that it would be wise to appoint another European to this post. Some politicians say that Jean-Claude Trichet well may succeed Dominique Strauss-Kahn. Traditionally, no American can be the Managing Director of the IMF. However, since 1992 the US representatives can run for the First Deputy Managing Director.
It goes without saying, that the IMF’s new chief will determine the destiny of both the common Euro currency and the US Dollar. The traditions are unlikely to be broken: they won’t elect an American. If it is a Chinese representative that succeeds Strauss-Kahn, then he won’t probably care about the USA’s interests, which presents a potential threat for the American currency. All the Arab representatives would probably strive to focus on the interests of their countries. So, it is obvious that the procedure of electing the IMF’s new Managing Director will definitely make the financial markets go wild, showing the decline of either EUR or USD.
Another controversial question is the circumstances of Strauss-Kahn’s arrest. Yet there is only one logical answer to this question: there is a conspiracy against him. Of course, a couple of other question arises: Cui prodest? What is the aim? The logic of reasoning leads us to the forthcoming presidential elections in France (2012). Strauss-Kahn used to be the front runner…
Everyone understands that the election of the new Managing Director of the IMF will cause considerable market movements. However, the direction is still not clear.
Yuriy Ukazkin
