The IMF is nothing but an Instrument for Meddling in the Finances of sovereign states, by Washington...who else?The International Monetary Fund has a nice, internationalist ring to it, raising notions of altruism and solidarity to countries in need. Nothing could be further from the truth. The fact is that the IMF does not and cannot provide a financial service to remedy the ills of a sick economy. The IMF is yet another tool used by Washington to deliberately destabilise unstable economies further, to make sick economies sicker and to create total financial, economic and political dependence on Washington in countries which can ill afford it.
If an economy needs to apply for external financing to shore it up, it is because it is already ill. In providing external financing, the IMF runs a huge risk (if indeed it is not done on purpose) of creating what is known as a moral hazard, which means it is interfering in an economy without knowing exactly how this economy will behave.
The IMF thus contributes towards a climate where assymetric information would be more fluid than perfect information, creating a scenario of instability which could lead to a banking crisis and an ensuing currency crisis, creating the need to borrow yet more money to stave off impending disaster.
As the meltdown proceeds, the knocks on the door of the IMF would become more and more frequent, resulting in a massive foreign debt whcich leads to the IMF dictating the economic (and political) policy of the debtor. For IMF, read "Washington".
Where instability does not already exist, it can easily be created through speculative attacks, through disinformation provoking volatile capital flows or by political instability, causing unpredictable crises in the money markets and leading to favourable conditions for more speculative attacks, once the behaviour of the internal economic and financial system and the threshhold reserve levels have been ascertained.
In short, it is a full circle, any point of which the cycle can be begun or finished at any time with the right planning. There is only one winner in this situation. For those who eat from the hand of the IMF, it is a lose-lose situation.
Maybe there will be temporary respite from a disastrous state of affairs, such as a banking crisis (for example where undercapitalised banks are forced to close through panic withdrawals, often created by disinformation from the lenders themselves), however, the long-term effect will be a protraction of the crisis and a passing of the political and economic initiative to foreign players. And here, all roads lead to Washington.
Far from being an academic paper, this article is a re-run of the recent history of countless Latin American States and indeed, of Russia herself. It is time for countries to make an effort to pay off their foreign debt once and for all, so as to stop making these ogres even fatter and to consider all alternatives before giving any confidence whatsoever to Washington or to its minions.
Rescuers found the pilot of one of the two Su-34 fighters that had collided in midair in the Far East on January 18