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The International Monetary Fund is in the news again for scandals of a more personal and dubious type—the arrest of fund chief Dominique Strauss-Kahn over allegations of sexual assault. This comes at a time when the IMF can least afford to be embroiled in political scandals—the global recovery is tenable at best, and the combination of rising prices, declining credit, and falling faith in fiat currencies is becoming a cocktail for disaster. But this does give us a great opportunity to help people understand what the IMF does, who pays for it, and how it works.

What the Heck is it?

Most people in the world couldn’t describe what the IMF does; yet if your country is one of the 187 member countries, you have paid for it. ABC World News says this:

And what do they do with all that fiat currency? To answer that, we need a little history lesson.

The IMF was founded after World War II during the beginning of the Bretton Woods system. In the Bretton Woods system, exchange rates were Read more…