Another Gust of Stench from IMF
Politics / Global Financial System Apr 16, 2012 - 01:26 PM GMTBy: Pravda
International Monetary Fund Senior Resident Representative in Russia, Odd Per Brekk has recently made a surprisingly lucrative suggestion to the international community. According to Mr. Brekk, one should invest their money in the development of national economies rather than saving up the funds on bank accounts. If something happens, the IMF will be there to help the country in trouble. The idea seems to be perfect, but there is a downside to it.
It would at first be good to strain our memory to recollect what kind of organization the International Monetary Fund is. The year 1944 - the peak of WWII. The Soviet troops were in fierce battles with Nazi Germany, but the USA called an international conference in Bretton Woods. Why? They did not discuss anything related to the struggle against fascism during that conference. The delegates from 44 countries gathered in Bretton Woods to discuss the post-war financial world order.
Everyone knows that the world split into two after May 5, 1945. The countries that accepted the USSR's socialist plan decided to follow their own path of development. The rest that thanked the USA and its allies for "liberation" found themselves in the zone of influence of the International Monetary Fund, which was actually founded during the Bretton Woods conference. There were officials from 44 countries participating in the conference, as we mentioned above. However, only 29 were listed as the founders of the IMF. This detail was not important at all at that time.
It was much more important, and it still remains so, that the main founder, administrator and sponsor of the financial organization was the United States of America. This country, due to its geographical and political reasons, did not suffer much in the global bloody massacre in the first half of the 20th century. Moreover, the USA gained incredible profit from the war: the US dollar became the basic currency in international settlements.
Many years have passed since that time. However, the principles and grounds remain the same. It is an open secret that any loan from the IMF to any country is connected with certain terms and conditions. A country that receives a loan from the IMF will have to take off its last shirt for that. The IMF and its principal beneficiary - the USA - miraculously receive more than just a lot in return.
Why did Mr. Brekk become so generous then? Anyone who can count to three may realize that the USA owns more than just the basic share of finance, whereas all other members are supposed to pay their shares in the same currency. One should bear in mind that this system works in spite of the fact that the USA's foreign debt is more than just enormous. Moreover, the BRICS countries have recently decided to establish their own development bank. Therefore, there is no better way to do away with the problems of one state and destroy competitors than tempt more or less developing states into making investments in their own development.
However, this suggestion implies serious investments in the economy of the United States in the first place. What if there is a country that faces the urgent need of finding a certain amount of currency assets? Is there a guarantee that this country will receive them? If it does, what kind of bonus will the country have to pay to the IMF? There are no answers to these questions.
Russia and China, formerly one of the largest buyers of US treasuries, have been reducing their share in national gold and currency reserves for years already. The statement from Mr. Brekk does not smell good at all.
Ilya Nikonov
Bigness
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