Global Banking: The International Monetary Fund
The triad of global monetary controllers includes the IMF, the Worl Bank and the Bank for International Settlements. As evidenced by growing demonstrations outside of every IMF meeting, the IMF is an organization people apparently find easy to hate. Funded by taxpayers around the world, the IMF doles out money by the billions to keep globalization alive. The world is their oyster and the global elite are the harvesters.
The International Monetary Fund (IMF) is a public institution, established with money provided by taxpayers around the world. This is important to remember because it does not report directly to either the citizens who finance it or those whose lives it affects. Rather, it reports to the ministries of finance and the central banks of the governments of the world.1
This authoritative statement comes from Joseph Stiglitz, who served for seven years as chairman of President Clinton's Council of Economic Advisers and as chief economist for the World Bank. Stiglitz is a mainstream globalist, but still honest enough to have become disillusioned with the corrupt practices of the IMF and the World Bank. His first-hand witness is very insightful: International bureaucrats - the faceless symbols of the world economic order - are under attack everywhere. Formerly uneventful meetings of obscure technocrats discussing mundane subjects such as concessional loans and trade quotas have now become the scene of raging street battles and huge demonstrations... Virtually every major meeting of the International Monetary Fund, the World Bank, and the World Trade Organization is now the scene of conflict and turmoil.2
Why is the IMF an organization that people love to hate? This report will hopefully shed some light on the subject.
According to its own literature, the International Monetary Fund (IMF) was "established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment."
This innocuous description hardly describes the critical functions that the IMF provides to the process of globalization. Indeed, the IMF is one of the leading agents of change in the global economy and global governance.
The IMF was actually created in December, 1945 when the first 29 member nations signed its Articles of Agreement, and began operations on March 1, 1947. (Note: there are 184 member countries today.)
The authorization for the IMF came a few months earlier at the famous Bretton Woods conference of July 1944.
On the heels of World War II, the Bretton Woods Agreements established a system of procedures and rules, together with institutions to enforce them, that called for member countries to adopt a monetary policy that was fixed in terms of gold. Although the Bretton Woods system utterly collapsed in 1971 after President Nixon suspended convertibility of the dollar into gold, the institutions created in 1944 continued on uninterrupted.
While any country may become a member of the IMF, the road to membership is noteworthy. When application for membership is submitted to the IMF's executive board, a "Membership Resolution" is made to the Board of Governors that covers the member's quota, subscription and voting rights. If approved by the Board of Governors, the applicant must amend its own laws in order to permit it to sign the IMF's Articles of Agreement and to otherwise fulfill the obligations required of members. In other words, the member subordinates a certain part of its legal to the IMF. This sets the stage for the IMF to take an active role in the affairs of the member country.
The IMF is viewed by some as a global organization, but it should be noted that the U.S. has 18.25 percent of the vote on the IMF board, or three times more than any other member. In addition, it is based in Washington, DC. IMF
Founders: Harry Dexter White and John Maynard Keynes
The principal architects of the Bretton Woods system, and hence the IMF, were Harry Dexter White and John Maynard Keynes.
Keynes was an English economist who has had an enormous impact on global economic thinking despite the fact that many of his economic theories have been thoroughly discredited. During WWII, he had called for the dissolution of the Bank for International Settlements because of its domination by Nazi operatives. After WWII however, when disbanding the BIS was actually mandated by Congress, he argued against the dissolution pending the creation of the IMF and World Bank. His latter argument was the often and over-used rationale "If we close it down too soon, the world financial system will collapse." Keynes globalist instincts led him to call for a world currency, called Bancor, that would be managed by a global central bank. This idea flatly failed.
Harry Dexter White was also considered to be a brilliant economist, and was appointed in as 1942 assistant to Henry Morgenthau, Secretary of the Treasury. He remained Morgenthau's most trusted assistant throughout his term, and argued verbosely against the Bank for International Settlements. Like Morgenthau and most all Americans, White was strongly anti-Nazi. White, however, was NOT pro-American.3
On October 16, 1950, an FBI memo identified White as a Soviet spy whose code name was Jurist.
Following the collapse of the Soviet Union in 1991, formerly secret intelligence documents were made public and shined new light on the matter. White was not just a spy among the 50-odd identified American spies, he was likely the top spy for the USSR in the U.S.
In 1999, the Hoover Digest wrote:
In their new book Venona: Decoding Soviet Espionage in America, Harvey Klehr and John Haynes argue that of some fifty Americans known to have spied for Stalin (many more have never been identified), Harry Dexter White was probably the most important agent.
The Venona intercepts revealed that at the 1945 conference in San Francisco founding the United Nations, White met with a Soviet KGB officer and informed him of the U.S. negotiating position on a number of issues. (White’s KGB code name was at various times “Lawyer,” “Richard,” and “Reed.”) Another KGB message noted that White was thinking of resigning his high Treasury post and entering the private sector because he needed more income to pay one of his daughter’s college tuition. White was regarded as so important to the Kremlin that his handlers proposed to pay the tuition so White could remain at Treasury.4
Had White lived beyond 1946, he likely would have been prosecuted for high treason against the U.S., the penalty for which is execution.
Such is the moral fiber and intellectual credentials of the creators of the IMF: One was a English ideologue economist with a markedly global bent, and the other a corrupt and high-ranking U.S. government official who was a top Soviet spy.
Trying to figure out where these two really stood in the eyes of the core global elite has more twists than a Sherlock Holmes mystery story. It is more easily perceived by the end result -- the successful creation of the IMF and the World Bank, both of which were heartily endorsed by the likes of J.P. Morgan and Chase Bank, among other international bankers. Positioning: IMF vs. the World Bank and the BIS
There is a triad of monetary powers that rule global money operations: the IMF, the World Bank and the Bank for International Settlements. Although they work together very closely, it is necessary to see which part each plays in the globalization process.
The International Monetary Fund (IMF) and the World Bank interact only with governments whereas the BIS interacts only with other central banks. The IMF loans money to national governments, and often these countries are in some kind of fiscal or monetary crisis. Furthermore, the IMF raises money by receiving "quota" contributions from its 184 member countries. Even though the member countries may borrow money to make their quota contributions, it is, in reality, all tax-payer money.5
The World Bank also lends money to governments and has 184 member countries. Within the World Bank are two separate entities, the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The IBRD focuses on middle income and credit-worthy poor countries, while the IDA focuses on the poorest of nations. The World Bank is self-sufficient for internal operations, borrowing money by direct lending from banks and by floating bond issues, and then loaning this money through IBRD and IDA to troubled countries.6
The BIS, as central bank to the other central banks, facilitates the movement of money. They are well-known for issuing "bridge loans" to central banks in countries where IMF or World Bank money is pledged but has not yet been delivered. These bridge loans are then repaid by the respective governments when they receive the funds that had been promised by the IMF or World Bank.7
The IMF has become known as the "lender of last resort." When a country starts to crumble because of problems with trade deficits or excessive debt burdens, the IMF can step in and bail it out. If the country were a patient in a hospital, the treatment would include a transfusion and other life support measures to just keep the patient alive -- full recovery is not really in view, nor has it ever happened.
One must remember that rescue operations would not be necessary if it were not for the central banks, international banks, the IMF and the World Bank leading these countries into debts they cannot possibly ever repay in the first place. The Purpose and Structure of the IMF
According to the IMF pamphlet,
A Global Institution: The IMF's Role at a Glance,
The IMF is the central institution of the international monetary system—the system of international payments and exchange rates among national currencies that enables business to take place between countries.
It aims to prevent crises in the system by encouraging countries to adopt sound economic policies; it is also—as its name suggests—a fund that can be tapped by members needing temporary financing to address balance of payments problems.
The IMF works for global prosperity by promoting the balanced expansion of world trade, stability of exchange rates, avoidance of competitive devaluations, and orderly correction of balance of payments problems
The IMF's statutory purposes include promoting the balanced expansion of world trade, the stability of exchange rates, the avoidance of competitive currency devaluations, and the orderly correction of a country's balance of payments problems.8 [Note: Emphasis is theirs]Although the IMF has changed in significant ways over the years, their current literature makes it quite clear that the statutory purposes of the IMF today are the same as when they were formulated in 1944:
i. To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems.
ii. To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy.
iii. To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.
iv. To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade.
v. To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.
vi. In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.8
As lofty as this might sound, one can interpret meanings by matching up its actions. For instance, "consultation and collaboration" often means "we will enforce our policies on your country" and "adequate safeguards" mean the "collateral and concessions we demand in return for borrowing our money."
The IMF has been likened to an international credit union, where members who contribute reserves have the opportunity to borrow as the need may arise. The IMF is further able to raise funds by borrowing from member countries or from private markets. The IMF claims to have not raised funds from private markets as of yet.
This report will examine four aspects of IMF operations: Currency and monetary roles, moral hazard, bailout operations during currency crisis and conditionalities.
Currency, Monetary Roles and Gold
Two years prior to the collapse of the Bretton Woods system, the IMF created a reserve mechanism called the Special Drawing Right, or SDR.
The SDR is not a currency, nor is it a liability of the IMF, rather it is primarily a potential claim on freely usable currencies. Freely usable currencies, as determined by the IMF, are the U.S. dollar, euro, Japanese yen, and pound sterling.9
Since the value of the component currencies change relative to each other, the value of the SDR changes relative to each component. As of December 29, 2005, one SDR was valued at $1.4291. The SDR interest rate was pegged at 3.03 percent.
There should be no mistake in the readers mind that the IMF correctly views itself as the "currency controller" for all countries who have hitched a ride on the globalization express. According to an official publication, The IMF is therefore concerned not only with the problems of individual countries but also with the working of the international monetary system as a whole. Its activities are aimed at promoting policies and strategies through which its members can work together to ensure a stable world financial system and sustainable economic growth. The IMF provides a forum for international monetary cooperation, and thus for an orderly evolution of the system, and it subjects a wide area of international monetary affairs to the covenants of law, moral suasion, and understandings.10
The IMF works closely with the Bank for International Settlements in promoting smooth currency markets, exchange rates, monetary policy, etc. The BIS, as central bank for central banks, more likely tells the IMF what to do rather than vice versa. This notion is bolstered by the fact that on March 10, 2003, the BIS adopted the SDR as its official reserve asset, abandoning the 1930 gold Swiss franc altogether.
This action removed all restraint from the creation of paper money in the world. In other words, gold backs no national currency, leaving the central banks a wide-open field to create money as they alone see fit. Remember, that almost all the central banks in the world are privately- or jointly-held entities, with an exclusive franchise to arrange loans for their respective host countries.
This is not to say that gold has no current or future role in international money. Under Bretton Woods, gold was the central reserve asset, and original subscribers contributed large amounts of gold bullion. Gold was abandoned completely in 1971, but the IMF continues to own and hold gold into the present: 103.4 million ounces (3,217 metric tons) with a current market value of about $45 billion. This is no small amount of gold!
The U.S. Treasury claims to have 261.5 million ounces of gold, but there has never been an official, physical audit of Fort Knox and other repositories to back up this claim. By comparison, Great Britain claims to own 228 million ounces of gold.
The BIS, IMF and major central banks (notably the New York Federal Reserve Bank and the Bank of England) have collectively and methodically sold portions of their gold stocks while claiming that "gold is dead". This manipulation has tended to suppress the price of gold since the early 1970's. Antony Sutton's 1979 book, The War on Gold, dealt definitively on this matter. More recently, the group Gold Anti-Trust Action Committee (GATA) was founded in 1999 with essentially the same argument: gold has been unfairly manipulated.
Suffice it to say that if so many organizations have conspired to keep "gold as money" out of the public mind, then gold is not dead but just temporarily on the shelf. When fiat currencies have been drained dry by the global cartel, gold will likely be brought back by the same people who told us it was forever a dead issue.
This is a technical legal term with a precise meaning, but it easily understood. Moral hazard is the term given to the increased risk of immoral behavior resulting in a negative outcome (the "hazard"), because the persons who increased the risk potential in the first place either suffer no consequences, or benefit from it.
While the IMF is riddled with specific instances of moral hazard, its very existence is a moral hazard.
The eminent economist Hans F. Sennholz (Grove City College) sums up the IMF operations this way:
The IMF actually encourages bankers and investors to take imprudent risk by providing taxpayer funds to bail them out. It encourages corrupt governments to engage in boom and bust policies by coming to their rescue whenever they run out of dollar reserves.11
The money shuffle goes like this: The World Bank and the BIS develop markets for credit by enticing governments to borrow money. They (and the private banks along side of them) are encouraged to make risky loans because they know that IMF stands ready to rescue countries with defaulting loans -- the moral hazard. As the usury interest builds up and finally threatens the entire financial stability of the affected country, the IMF steps in with a "bail out" operation. Defaulted loans are replaced or restructured with (taxpayer provided) IMF loans. Additional money is loaned to repay back interest and allow for further expansion of the economy.
In the end, the desperate country is even further in debt and is now saddled with all kinds of additional restrictions and conditions. Plus, under the phony aegis of "poverty reduction", citizens are invariably left worse off than in the beginning.
This is also a technical term that has a specific meaning: A or the World Bank. One example of conditionality is Structured Adjustment Programs which include stringent austerity measures that in many cases have had devastating effects on struggling economies.
Conditionality is a condition attached to a loan or a debt relief granted by the IMF or the World Bank. Conditionalities are typically non-financial in nature, such as requiring a country to privatize or deregulate key public services.
Conditionalities are most significant within so-called Structural Adjustment Programs (SAP) created by the IMF. Nations are required to implement or promise to implement the attached conditionalities prior to approval of the loan.
The fallout of conditionalities is notable. The globalist think-tank Foreign Policy in Focus published IMF Bailouts and Global Financial Flows by Dr. David Felix in 1998.
The report's introduction makes these key points:
The IMF has been transformed into an instrument for prying open third world markets to foreign capital and for collecting foreign debts.
This transformation violates the IMF charter in spirit and substance, and has increased the costs to countries requesting IMF financial aid.
The IMF’s operational crisis stems from growing debtor resistance to its policy demands, soaring fiscal costs, and accumulating evidence of IMF policy failure.12
The general public has not seen such "internal criticism" of the IMF. If an outsider were to make the very same criticism, he would be ostracized for being part of the radical fringe.
So, conditionalities are instruments of forcing open markets in third-world countries, and of collecting defaulted debts owed by public and private organizations. The accumulating result of conditionalities is increasing resistance to such demands, bordering on hatred in many countries.
The countries who can least afford it are saddled with soaring costs, additional debt and reduced national sovereignty.
Perhaps the most authoritativ
e report on this topic was produced in 2002 by Axel Dreher of the Hamburg Institute of International Economics entitled The Development and Implementation of IMF and World Bank Conditionality.
Dreher notes that there was no consideration of conditionalities at the founding of the IMF, but rather they were gradually added in increasing numbers as the years passed and mostly by U.S. banking interests.13
Conditionalities are arbitrary, unregulated, and imposed in varying degrees on different countries according to the whims of the negotiators. The recipient countries have little, if any, bargaining power.
The August Review has observed several times that 1973, with the creation of the Trilateral Commission, was a pivotal year in the stampede to globalization. It is no surprise then that conditionalities became a standard business practice in 1974 with the introduction of the Extended Fund Facility (EFF).14 EFF created lines of credit, or "credit tranches", that could be drawn on as needed by a troubled country, thus creating additional moral hazards as well.
Dreher also points out the tight coordination with the World Bank:
The reforms under IMF programs have mainly been designed by World Bank economists. Fund conditionality often was supportive of measures contained in Bank supported public enterprise reform operations. The selection of public enterprises to be reformed as well as the modalities and time table was developed by the Bank as well.15
So, we see that the IMF does not act alone in the application of conditionalities and in some cases, it is pointedly driven by the World Bank.
Dreher's meticulous research uncovered another interesting statistic: The most frequent condition included is bank Privatization -- included in 35 percent of the programs analyzed!16 International bankers have always had disdain for banking operations run by governments instead of by private or corporate ownership. Thus, they have used the IMF and World Bank to force privatization of what remains in government hands in the third-world.
If all of this was not disturbing enough, Dreher informs us that there are direct connections between conditionalities imposed and various private banks who work in concert with the IMF and World Bank:
Since private creditors were willing to lend further only if IMF programs were in effect, the Fund's leverage was enhanced... since for crisis resolution sometimes more money is needed than can be provided by the IFIs, IMF and World Bank depend on these private creditors who should therefore be able to press for conditions which lie in their interest.17
With the IMF, World Bank and other international banks forcing governments to run their countries in ways not of their choosing, and with the United States viewed as the primary driver of these organizations, it is no wonder that the third-world musters such intense hatred for the U.S. and for the self-interested globalization it exports wherever possible. The globalization process is most often anti-democratic and completely ineffective at accomplishing it's lofty stated goal of poverty reduction.
It should be plainly evident by now that the "can opener" for globalization to take place is the power of money. Borrowed money enslaves the borrower, and puts him at the mercy of the lender. When President Bill Clinton finally acknowledged the error of his ways during his affair with Monica Lewinski, he stated that it was for the absolutely worst of reasons: "Because I could." Why do these global financial organizations take such advantage of those whom they systematically put in jeopardy? Because they can!
IMF Bailout of Brazil
The 1998 the Brazil currency crisis was caused by that country's inability to pay inordinate accumulated interest on loans made over a protracted period of time. These loans were extended by banks like Citigroup, J.P. Morgan Chase and FleetBoston, and they stood to lose a huge amount of money.
The IMF, along with the World Bank and the U.S., bailed out Brazil with a $41.5 billion package that saved Brazil, its currency and, not incidentally, certain private banks.
Congressman Bernard Sanders (I-VT), ranking member of the International Monetary Policy and Trade Subcommittee, blew the whistle on this money laundering operation. Sander's entire congressional press release is worth reading:
IMF Bailout for Brazil is Windfall to Banks, Disaster for US Taxpayers Says Sanders
BURLINGTON, VERMONT - August 15 - Congressman Bernard Sanders (I-VT), the Ranking Member of the International Monetary Policy and Trade Subcommittee, today called for an immediate Congressional investigation of the recent $30 billion International Monetary Fund (IMF) bailout of Brazil.
Sanders, who is strongly opposed to the bailout and considers it corporate welfare, wants Congress to find out why U.S. taxpayers are being asked to provide billions of dollars to Brazil and how much of this money will be funneled to U.S. banks such as Citigroup, FleetBoston and J.P. Morgan Chase. These banks have about $25.6 billion in outstanding loans to Brazilian borrowers.
U.S. taxpayers currently fund the IMF through a $37 billion line of credit.
Sanders said, "At a time when we have a $6 trillion national debt, a growing federal deficit, and an increasing number of unmet social needs for our veterans, seniors, and children, it is unacceptable that billions of U.S. taxpayer dollars are being sent to the IMF to bailout Brazil."
"This money is not going to significantly help the poor people of that country. The real winners in this situation are the large, profitable U.S. banks such as Citigroup that have made billions of dollars in risky investments in Brazil and now want to make sure their investments are repaid. This bailout represents an egregious form of corporate welfare that must be put to an end.
Interestingly, these banks have made substantial campaign contributions to both political parties," the Congressman added.
Sanders noted that the neo-liberal policies of the IMF developed in the 1980's pushing countries towards unfettered free trade, privatization, and slashing social safety nets has been a disaster for Latin America and has contributed to increased global poverty throughout the world. At the same time that Latin America countries such as Brazil and Argentina followed these neo-liberal dictates imposed by the IMF, from 1980-2000, per capita income in Latin America grew at only one-tenth the rate of the previous two decades.
Sanders continued, "The policies of the IMF over the past 20 years advocating unfettered free trade, privatizing industry, deregulation and slashing government investments in health, education, and pensions has been a complete failure for low income and middle class families in the developing world and in the United States . Clearly, these policies have only helped corporations in their constant search for the cheapest labor and weakest environmental regulations. Congress must work on a new global policy that protects workers, increases living standards and improves the environment." [Emphasis added]
IMF Bailout of Asia
The Asian currency crisis came to a head in 1998, and the IMF was on the spot for a massive bailout. Vocal critics of the IMF at that time included George P. Schultz (member of the Trilateral Commission), William E. Simon (Secretary of the Treasury under Nixon and Ford) and Walter B. Wriston (former chairman of Citigroup/Citibank and member of the Council on Foreign Relations). They jointly wrote Abolish the IMF? for the Hoover Institution, where Shultz is also a distinguished fellow. The article states:
The $118 billion Asian bailout, which may rise to as much as $160 billion, is by far the largest ever undertaken by the IMF. A distant second was the 1995 Mexican bailout, which involved some $30 billion in loans, mostly from the IMF and the U.S. Treasury. The IMF's defenders often tout the Mexican bailout as a success because the Mexican government repaid the loans on schedule. But the Mexican people suffered a massive decline in their standard of living as a result of that crisis. As is typical when the IMF intervenes, the governments and the lenders were rescued but not the people.18 [Emphasis added]
Their scathing attack continues throughout the article, and concludes with
The IMF is ineffective, unnecessary, and obsolete. We do not need another IMF, as Mr. (George) Soros recommends. Once the Asian crisis is over, we should abolish the one we have.18
It's interesting that these core members of the global elite are throwing stones at their own institution. What is outrageous is that they are completely side-stepping their own personal culpability for having used it to drive globalization with all of its ill side-effects. The fact that they succinctly describe the damage done by the IMF clearly dispenses their typical claim of "ignorance." Are they setting the stage to disband the IMF in favor of another, more powerful monetary authority? Time will tell.
Argentina: A Case Study of Privatization
In 2001, the IMF handed a bailout package to Argentina, valued at $8 billion. The major beneficiaries were the European megabanks, which held about 75 percent of the country's foreign debt. The money river flowed like this: IMF gives $8 billion (about $1.6 billion of which was tax money collected from hard working Americans) to Argentina; Argentina buys U.S. Treasury bills (U.S. gets the dollars back after being "monetized"); Argentina delivers Treasury Bills to creditor banks who graciously agree to retire their worthless Argentinian bonds.
Less than a decade earlier, the IMF and the World Bank backed Argentina in the largest water privatization project in the world. In 1993, Aquas Argentinas was formed between Argentina's water authority and a consortium that included the Suez group from France (largest private water company in the world) and Aquas de Barcelona of Spain. The new company covered a region populated by over 10 million inhabitants.
Now, after 10 years of higher water rates, decreased quality of water and sewage treatment, and neglected infrastructure improvements, the consortium is breaking its 30-year contract and pulling out. Bitterness between Aqua and government officials runs deep because of broken promises and political backlash.
The aftermath of Aqua Argentina is recorded in the November 21, 2005 online edition of the Guardian:
More than 1 million residents in the rural Argentinian province of Santa Fe are facing an anxious wait to discover if their taps will still flow or their toilets flush over the next few weeks.
Since 1995, the province has had its water supply and sewage services provided by a consortium led by the French multinational Suez; now the giant utility wants out, and plans to leave within the month.
The decision, which follows the high-profile collapse of other water privatisation schemes in countries including Tanzania, Puerto Rico, the Philippines and Bolivia, has again raised questions about the viability of privatising utilities in the developing world.
Suez is also preparing an early departure from its formerly lucrative concession in the Argentine capital, Buenos Aires. The deal, struck in 1993, marked the largest water privatisation project in the world.
In both cases, the French utility is terminating its 30-year contract a third of the way through. Suez cannot get the concessions to turn a profit - at least not under the terms of its current agreements.
The French utility giant snapped up both service agreements in the mid-1990s when Argentina was undergoing a massive reform of its public sector, largely at the behest of the World Bank and other lending agencies.19
Aqua Argentina milked the market as long as it could, and then simply bailed out. And, why not? The profit dried up and it's not their country!
Global statistics show that some 460 million people around the world must rely on private water corporations like Aqua Argentina, compared to only 51 million in 1990. The IMF (and World Bank) levered the extra 400 million people into privatized contracts with water mega-companies from Europe and the U.S. Now that the cream has been skimmed off the top of the milk, these same companies are excusing themselves from the party -- leaving a shambles, angry customers and incapable governments still saddled with the billions of dollars of debt incurred (at their insistence) to start privatization in the first place.
[Note: In February 2003, CBC News in Canada produced an in depth report Water for Profit: how multinationals are taking control of a public resource that included features and segments that were delivered across five days of broadcasting.]20
This report does not pretend to be an exhaustive analysis of the IMF. There are many facets, examples and case studies that could be explored. In fact, many critical analysis books have been written about the IMF. The object of this report was to show generally how the IMF fits into globalization as a critical member in the triad of global monetary powers: The IMF, the BIS and the World Bank.
Despite even establishment calls for the dissolution of the IMF, it continues to operate unhindered and with virtually no accountability. This is reminiscent of the BIS continuing to operate even after its dissolution was officially mandated after WWII.
For the purpose of this report, it is sufficient to conclude that...
of the two founders of the IMF, one was an outright traitor to the U.S. and the other was a British citizen totally dedicated to globalism the IMF, in coordination with the BIS, tightly controls currencies and foreign exchange rates in the global economy the IMF is a channel for taxpayer money to be used to bail out private banks who made questionable loans to countries already saddled with too much debt the IMF uses conditionalities is a lever to force privatization of key and basic industries, such as banking, water, sewer and utilities conditionalities are often structured with help from the private banks who loan alongside of the IMF the policies of privatization accomplish just the opposite of what was promised the global elite are neither ignorant nor repentant of the distress the IMF has caused so many nations in the third-world
when the public heat gets too hot, the global elite simply join the critics (thereby shunning all blame) while quietly creating new initiatives that allow them to get on with business -- that is, their business!
Stiglitz, Globalization and its Discontents (Norton, 2002), p.12
ibid, p. 3
Ladd, FBI Office Memorandum, October 16, 1950
Beichman, Guilty as Charged, Hoover Digest 1999 No. 2
IMF web site, http://www.imf.org
World Bank web site. http://www.WorldBank.org
Baker, The Bank for International Settlements: Evolution and Evaluation, (Quorum, 2002), p. 141-142
IMF, What is the International Monetary Fund?, 2004
IMF, Overview of the IMF as a Financial Institution, p.11
ibid, p. 3
Sennholz, IMF Bailouts Make Matters Worse
Felix, IMF Bailouts and Global Financial Flows, Vol. 3, No. 3, April 1998
Dreher, The Development and Implementation of IMF and World Bank Conditionality, Hamburg Institute of International Economics
ibid, p. 9
ibid, p. 17
ibid, p. 18
ibid, p. 21
Shultz, et. al, Who Needs the IMF?, Hoover Institution Public Policy Inquiry on the IMF
The trickle-away effect, The Guardian, November 21, 2005
CBC News, Water for Profit: how multinationals are taking control of a public resource