Creature From Jekyll Island by G. Edward

That fit in quite nicely with the Soviet plan. Furthermore, the World Bank was seen as a vehicle for moving capital from the United States and other industrialized nations to the underdeveloped nations, the very ones over which Marxists have always had the greatest control. They looked forward to the day when we would pay their bills. It has all come to pass.

IMF STRUCTURE AND FUNDING

The International Monetary Fund appears to be a part of the United Nations, much as the Federal Reserve System appears to be a part of the United States government, but it is entirely independent. It is funded on a quota basis by its member nations, almost two hundred in number. The greatest share of capital, however, comes from the more highly industrialized nations such as Great Britain, Japan, France, and Germany. The United States contributes the most, at about twenty per cent of the total. In reality, that twenty per cent represents about twice as much as the number indicates, because most of the other nations contribute worthless currencies which no one wants. The world prefers dollars.

One of the routine operations at the IMF is to exchange

worthless currencies for dollars so the weaker countries can pay their international bills. This is supposed to cover temporary cash-flow" problems. It is a kind of international FDIC which rushes money to a country that has gone bankrupt so it can avoid devaluing its currency. The transactions are seldom paid back.

Although escape from the gold-exchange standard was the

long-range goal of the IMF, the only way to convince nations to Participate at the outset was to use gold itself as a backing for its

°wn money supply—at least as a temporary expedient. As Keynes explained it:

I felt that the leading central banks would never voluntarilyrelinquish the then existing forms of the gold standard; and I did notdesire a catastrophe sufficiently violent to shake them off 90 THE CREATURE FROM JEKYLL ISLAND

involuntarily. The only practical hope lay, therefore, in a gradual

evolution in the forms of a managed world currency, taking theexisting gold standard as a starting point.1

It was illegal for American citizens to own gold at that time, but everyone else in the world could exchange their paper dollars for gold at a fixed price of $35 per ounce. That made it the de facto international currency because, unlike any other at the time, its value was guaranteed. So, at the outset, the IMF adopted the dollar as its own international monetary unit.

PAPER GOLD

But the Fabian turtle was crawling inexorably toward its

destination. In 1970, the IMF created a new monetary unit called the SDR, or Special Drawing Right. The media optimistically described it as "paper gold," but it was pure bookkeeping wizardry with no relationship to gold or anything else of tangible value.

SDRs are based on "credits" which are provided by the member nations. These credits are not money. They are merely promises that the governments will get the money by taxing their own citizens should the need arise. The IMF considers these to be

"assets" which then become the "reserves" from which loans are made to other governments. As we shall see in chapter ten, this is almost identical to the bookkeeping sleight-of-hand that is used to create money out of nothing at the Federal Reserve System.

Dennis Turner cuts through the garbage:

SDRs are turned into loans to Third-World nations by the creationof checking accounts in the commercial or central banks of the membernations in the name of the debtor governments. These bank accounts

are created out of thin air. The IMF creates dollars, francs, pounds, orother hard currencies and gives them to a Third-World dictator, withinflation resulting in the country where the currency originated....

Inflation is caused in the industrialized nations while wealth istransferred from the general public to the debtor country. And thedebtor doesn't repay.