In the last two weeks there has been a curious silence about who is going to be the new chief of the International Monetary Fund. True, the decision by the appointment committee (whoever they are — variable from week to week, or even day to day, I imagine) is not expected until 30 June. And why has the front-runner, Christine Lagarde, been lying low? Has she nothing to say about the present looming catastrophe in the Eurozone? It is in the worst crisis of its 11 years of existence and now is not the time for reticence by a European candidate if she has anything at all to contribute by way of a solution.
I can only surmise that a dispute is now going on between the weightier members of the IMF. But never mind how ambitious Christine Lagarde may be, or however much she’s supported by President Sarkozy of France (who has also been curiously silent), she has spent most of her life as an antitrust and labour lawyer in America and knows little about economics au fond. If she’s appointed, then what can emergent countries such as China, or India or Brazil say other than she’ll be just a figurehead who will be manipulated by Eurozone bigwigs?
So I’m shifting back to what I wrote about a month ago — that she will not be appointed. It is probably too much for the Americans to stomach that a Chinese be appointed. So out goes who would be my choice — Justin Yifu Lin, the main economic architect of China’s 30-year resurgence, and now chief economist of the World Bank. Also, out go Grigori Marchenko of Kazakhstan (too controversial) and Stanley Fischer of Israel (too old).
Which leaves Agustin Carstens (53), the present governor of the Mexican Central Bank. Precociously talented in economics, married to a brilliant writer, C. M. Mayo, and already a deputy managing director of the IMF, he’s the only other contender who has been buying gold publicly for his bank. Most other central bankers are buying gold surreptitiously because they daren’t nail their colours to the mast in publicly stating that gold will ultimately be restored as the basic world currency. Carstens, like Robert Zoellick, President of the World Bank, has been the only eminent banker who has had the courage to say so.
Quite whether America or the European powers or Japan are yet quite ready to admit that the days of printing money ad lib are over remains to be seen.