I’m sure that most of you have heard of the organization The IMF – but likely not in this light. I have been researching this for some time now, and over the next couple posts hope to share with you what I’ve learned.
The International Monetary Fund (IMF) is an international organization that was initiated in 1944 at the Bretton Woods Conference and formally created in 1945 by 29 member countries. The IMF’s stated goal was to stabilize exchange rates and assist the reconstruction of the world’s international payment system post-World War II.
Countries contribute money to a pool through a quota system from which countries with payment imbalances can borrow funds temporarily. Through this activity and others such as surveillance of its members’ economies and policies, the IMF works to improve the economies of its member countries.
The IMF describes itself as “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.” The organization’s stated objectives are to promote international economic cooperation, international trade, employment, and exchange rate stability, including by making financial resources available to member countries to meet balance of payments needs. Its headquarters are in Washington, D.C., United States.
Voting power in the IMF is based on a quota system. Each member has a number of “basic votes” (each member’s number of basic votes equals 5.502% of the total votes), plus one additional vote for each Special Drawing Right (SDR) of 100,000 of a member country’s quota. The Special Drawing Right is the unit of account of the IMF and represents a claim to currency. It is based on a basket of key international currencies.
Ok so we get it – an international financial group all pitching in to a communal “fund” where the more that your country contributes the greater the number of votes (and influence) is given.
I wonder if you’ve already got some idea as to where I’m going with this.
Any idea of which country is the largest contributor and in turn receives the most votes/influence?
Next in the series: Inside The IMF – U.S Pulls Strings
Must be US ?
You’ve got it Rolo.
This “IMF” is yet another organization that is essentially governed by a small group of elite family/friends and bankers – with the largest influence coming from those of the Unites States. Currently Tim Geithner is the acting governor for the U.S with (you guessed it!) – Ben Bernanake listed as the “alternate”.
I am still tracking the 21 week Squeeze in AUD/USD waiting for this to fire, currently trending the mean of the KC. Should this fire on the positive side above 1.06099 we could very well tag the 1.08/1.10 range as the top. This could or should be the drive in the PM sector to tag or break the &1900 mark in Gold. Until then I suspect we will continue on this current flat action we have in the sector.
I am all in on just one pair. long AUD/USD here……
Don’t forget how US and the Europeans basically colluded on the head of both “World Bank” and “IMF”. Where World Bank is always led by an American and IMF is always led by a European. Nice cozy oligopoly here.
Yes it’s a cozy little set up that’s for sure.
I just find it interesting on this Cyprus deal why the IMF is actually involved ( from what I understand contributing only 1.3 billion ) when the entire thing is relatively small “monetarily speaking”.
Cyprus seeking a funding solution directly from Russia would represent a major blow to the IMF, and Im seeing that the implications are considerable. Russia/China – East vs West type thing. I guess we’ll see how things play out – but if you ask me, a major blunder by IMF / ECB in creating concern over bank savings safety.