The pool of money the IMF loans and redistributes around the world helps to stabilize countries if they are failing or economically unstable. But many people do not understand who, and how they are funded. While the IMF exerts a fair amount of influence, it is political in nature and pushes the way the wind blows. This bring up the issue and questions as to how muddled this system is. With a loud voice the IMF is overrated, it often uses only a small amount of money to make the very desperate march in line, at times this means not solving problems but helping to kick the can down the road.
Who and what is the IMF? We all know IMF stands for, the International Monetary Fund (IMF) is an organization of 188
countries, working to foster global monetary cooperation, secure
financial stability, facilitate international trade, promote high
employment and sustainable economic growth, and reduce poverty around
the world. It is a way for rich nations like the United States to manipulate, redistribute or loan money to troubled nations without putting the issue out in the open. As an institution the IMF acts as a mechanism to stabilize the world economy, it is merely an expensive mouthpiece for the worlds economic powers seeking stability, its goal to shore up the weak, thus protecting loans about to default.
The mechanisms of economic stabilizers, can be used to move, support or break currency trends, some more quietly then others. Currency swaps, both reported, and "unreported" can lead to games, abuses, and the false illusion of stability. For example, Goldman Sachs helped Greece raise over a billion dollars of off- balance-sheet funding in 2002 through a currency swap. This allowed the government to hide debt. Greece had previously succeeded in getting approval to join the euro on 1 January 2001, in time for the physical launch in 2002, looking back we now see this was done by faking its deficit figures.
When the IMF weighs in it adds validity to the message rich countries want to promote, this is often the message of "be responsible". The amounts of loans and monies promised often do not appear large to many of us. Why do these numbers seem so small? You might think that it is because these countries are so very small, another possibility is America is just 'crazy stupid" in the way they spend and treat money. With the dollar being the reserve currency of the World we have become a bit warped, it is hard to internalize how large a store of value a billion dollars represents.
The International Monetary Fund (IMF) says there is no
"single bullet" that will fix many of the worlds economic ills. For example what recipe will allow Caribbean countries to deal with their
various problems such as high debt, low growth, mitigation of
vulnerabilities and strengthening financial system. The IMF notes that growth in the Caribbean has stagnated in the last two decades, except in commodity exporters. The IMF is currently involved in Cyprus, Tunisia, Argentina, Ireland, Greece,and many more countries, guiding and tweaking their economic policies.