Why is the IMF an organization that people love to hate? This report
will shed some light on the subject.
According to its own literature, the 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
The IMF was actually created in December, 1945 when the first 29 member
nations signed its
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
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
sovereignty 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
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.
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.
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
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.
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
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.
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.
[COMMENT: When money is loaned to a
government, all the people of that nation become liable for the debt.
If money is loaned to a corporation, only that corporation becomes
liable for the debt. This loaning is one more means of getting
international agencies in control of a multitude of nations.
With honest government for a free people,
there is a separation of commerce and state, just as with religion and
state. They are both under God, but they stick to their own proper
jurisdictions. Government is properly a defender and a
referee, not a player in the game. When a referee becomes a
player, there will always, of course, be a tilted playing field.
The Purpose and Structure of the IMF
According to the IMF pamphlet, A Global Institution: The IMF's Role at a
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
The IMF works for global prosperity by promoting