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Trust Us!We have been told ad-nauseum, that our future is "safe" in the hands of experts. People with the skills, knowhow, dedication and will to "manage" our economy "for the greater good". No organization epitomizes this "need" for management more than the International Monetary Fund (IMF). This is so because the IMF is typically the lender of last resort for all countries and in wielding such power they get to decide the economic fate of billions of people. Fair enough, if this is the argument then it is only fair to take a look at the leaders of such organization because in ultimate analysis it is they who are responsible. Remember, the IMF is not a democratic organization. Its leaders are selected behind closed doors by the representatives of certain countries based on political considerations at least. There is no plausible argument there that we, the people, got what we have chosen. All IMF Managing Directors are un-elected apparatchiks, selected by un-elected apparatchiks. Clear? Gooooood. Now to task.

The table below lists the people that have acted as directors, and a few historical facts about them for your consideration.

Who?

Achievements

Commentary

Madame Christine Lagarde, from France, is Managing Director and Chairman of the Executive Board starting July 5, 2011

Lawyer and politician. Put under formal investigation by French magistrates for alleged negligence in a political fraud affair dating from 2008 when she was finance minister. Referring to the financial disaster in Greek, she stated "it's payback time". As a Finance Minister of France she sent a list of 1991 Greek customers bank accounts information from the HSBC Geneva branch to the Greek government.

Not an economist, a politician... running an economic institution. A person with a criminal record currently on trial for…fraud!, which happens to be an economic and/or financial "crime". Vindictive, at least to Greek people and lastly disregarding Swiss banking laws. Yeah… this is the sort of person you definitively want directing an all-powerful economic organization that has such an impact on billions of lives. Yeah…

Mr. Dominique Strauss-Kahn, from France, was Managing Director and Chairman of the Executive Board from November 1, 2007 to May 18, 2011.

Economist and politician. In 1999, he was accused of corruption in two financial scandals related to Elf Aquitaine and the MNEF and decided to resign from his ministerial office to fight these charges. He was acquitted in November 2001.

In 2008 the IMF Board investigated allegations by a subordinate to have been coerced into a sexual affair. The Board concluded that the affair was "regrettable and reflected a serious error of judgment on the part of the managing director"

On 26 July 2013, French prosecutors announced that Strauss-Kahn was to stand trial concerning allegations of "aggravated pimping" at the Carlton hotel in Lille. He took the stand in a bid to convince judges he was not at the core of a prostitution ring. Acquitted of these charges on 12 June 2015.

Here we have a person tried for "corruption" and for "aggravated pimping" who describes himself as a "libertine" and commits serious errors of judgement. Yeah… this kind of high morals, principled person is exactly what we need directing an all-powerful economic organization that has such an impact on billions of lives. Yeah…

Mr. Rodrigo de Rato, from Spain, was Managing Director from June 7, 2004 to October 31, 2007.

Business administrator and politician. Arrested in Spain over allegations of tax evasion, fraud, embezzlement and money laundering. The case is ongoing. He resigned for ‘personal reasons’. Listed as the worst CEO ever in 2012 of Bankia due to concerns over the solvency of the bank  and charged in July 2012 for ‘accounting irregularities’.

Not an economist. A person under investigation for financial crimes such as tax evasion, fraud, embezzlement and money laundering. A person who, at the very minimum, decimated the financial strength of an otherwise sound bank (Caja Madrid) through suspicious mergers, financial dealings and political influence. Yeah… this is exactly the type of experience that we need in a person directing an all-powerful economic organization that has such an impact on billions of lives. Yeah…

Mr. Horst Köhler, from Germany, was Managing Director from May 1, 2000 to March 4, 2004

Economist and politician. As a head of the IMF, its influence amounted to, well, not much. German President Horst Köhler announced his resignation on Monday 31 May 2010 in response to fierce criticism of comments he made about Germany's military mission in Afghanistan. "A country of our size, with its focus on exports and thus reliance on foreign trade, must be aware that ... military deployments are necessary in an emergency to protect our interests -- for example when it comes to trade routes, for example when it comes to preventing regional instabilities that could negatively influence our trade, jobs and incomes," Köhler said. In other words, Germany should be ready to go to war to defend their own interests of free-trade and to crush instability and regional insecurities in the world (so as to maintain standards of German revenue and trading possibilities).

Horst did not do much as the head of the IMF, conducting "business as usual"… which is exactly what you would expect from apparatchiks. Later on, as the president of Germany (a title more honorary than anything else) he made the mistake of publicly stating what all other politicians think: that wars are there to protect and enhance economic benefits for a group or, in this case, a country. This is Imperialism pure and simple. And so the question lingers, when Horst was the head of the IMF, which Empire did he protect and/or support? Yeah… this is exactly the type of thinking that we need in a person directing an all-powerful economic organization that has such an impact on billions of lives. Yeah…

Michel Camdessus, from France, was Managing Director from January 16, 1987 to February 14, 2000

Economist and bureaucrat. Tendered his resignation November 9, 1999 citing personal reasons. In the midst of several investigations into laundering of misappropriated IMF loans to Russia, the timing raises questions over the extent to which the institution has been tainted by the scandals.

Strongly criticized for his blinkered imposing of measures in East Asian countries and in Latin America. It caused unprecedented crises in countries like Argentina and rioting in Mexico and Indonesia among others.

A person that at least should have known that 4.5 Billion USD (yes, Billions with capital B) of IMF funds vanished from Russia. It's not like this is pocket change. But even if he did not know, he is still responsible because this happened under his watch. And what does this example of probity does? He resigns for "personal reasons".

And what else did this luminary of international finance do? He imposed such a bone headed conditions for IMF (financial) help that several countries went right into crises including rioting and civil disobedience. Which, we presume, was not the goal, right? And remember, Michael was an economist, so there is no possible excuse that he did not know what the economic consequences will be. Yeah… this is exactly the type awareness and technical competency that we need in a person directing an all-powerful economic organization that has such an impact on billions of lives. Yeah…

Jacques de Larosière, from France, was Managing Director from June 17, 1978 to January 15, 1987

Bureaucrat. French government's massive bail-out in the early 1990s of Crédit Lyonnais, a formerly state-owned bank, cost the country's taxpayers more than euro 25 billion ($29 billion). But who was to blame for the alleged cover-up of the huge losses on financial dealings that took the bank to the brink of ruin? The Governor of the Bank of France, Jacques perhaps? Nobody knows because he was acquitted of any wrongdoing in the Credit Lyonnais accounting scandal. And what was he accused of? Well: "dissemination of false information and complicity market presentation and publication of inaccurate financial statements." no less.

In November 1982, when Mexican and Argentine loan agreements were being considered by the IMF, De Larosiere sent telegrams to major commercial lenders, inviting them to a meeting. At the session, he told the bankers that if they did not put up $5 billion in new money for Mexico and $1.5 billion for Argentina, the IMF would not approve rescue programs for those countries, further jeopardizing chances of the banks' getting back any part of their money.

A person with a criminal record involved somehow with a massive taxpayer bailout of a private bank. A person that is not above "incentivising" banks to do "the right thing", even if this "right thing" is financial suicide as it is to keep loaning vast amounts of money to debt-addicted politicians in banana countries. Yeah… this is exactly the type of measures and acts that we must expect from a person directing an all-powerful economic organization that has such an impact on billions of lives. Yeah…

H. Johannes Witteveen, from the Netherlands, was Managing Director from September 1, 1973 to June 16, 1978

Economist and politician. According to Witteven, IMF -- and not the European Central Bank -- should solve to the sovereign debt crisis. The way to do so is to create an IMF "debt facility" which will allow the IMF to borrow heavily from Central Banks with large reserves such China, Japan or Middle East. With this gigantic source of finance, the IMF could aid Italy and Spain than the ECB could amass because the IMF is not limited to Europe alone.

Witteveen also implied that the IMF could hold nations to more stringent economic policies than the ECB.

"A final advantage would be to bring big countries such as Italy and Spain under IMF conditionality. The fund could then take over the work of the ECB, whose courageous buying of indebted countries’ bonds requires adequate fiscal policies. This is clearly more the task of the IMF than of the ECB. It would restore market confidence, so the financing can eventually be taken over again by the normal market mechanisms. International action is now urgent to avert a vicious recessionary cycle, which many governments – bound by their debt problems – would be unable to counter, even becoming a recessionary force themselves."

Let's see. Here we have an economist advocating an international organization to be able to borrow massively from other Central Banks, thus reducing their reserves and making them more vulnerable to market issues. And what would Johannes do with this money? He would lend it to countries with "sovereign debt" issues; countries so financially stable as Italy, Spain and the ones known as PIIGS nowadays. This would be good, because the IMF could force their policies onto those countries, policies that have created massive crisis and unrest elsewhere. Not only that, but buying worthless bonds with tax money from bankrupting countries happens to be "courageous". It is clear that "International action" is necessary to avoid a vicious recessionary cycle, such as the boom and bust cycle created by Central Banks in the first place! So, according to Johannes, the IMF needs to borrow heavily from Central Banks and give this money to bankrupted countries whose own Central Banks have created cycles of boom and bust. Of course! Silly us! Yeah… this is exactly the type of thinking that we must demand from an economist who is also the director of an all-powerful economic organization that has such an impact on billions of lives. Yeah…

Pierre-Paul Schweitzer, from France, was Managing Director from September 1, 1963 to August 31, 1973

Lawyer, economist and politician. Pierre-Paul Schweitzer, visited Frankfurt in 1971 to discuss with Germany's top economic brass what action was needed to calm the markets after a cut of the discount rate had not stemmed the dollar deluge.

The central bank was represented by its president, Karl Klasen, who (opposed to letting the mark float and who favored applying capital controls to keep out unwanted Dollars), and his deputy Otmar Emminger (who leaned toward floating).

The dominant figure was Karl Schiller, who was an exponent of floating exchanges.

On one side, the autocratic Klasen vigorously condemned floating rates, supported by Schweitzer, who feared for the IMF's future relevance if floating currencies were to become the norm. On the other side was the other Karl, strongly recommending letting the German mark find its own way on the markets, where it would no doubt rise against other currencies.

The decision taken in this meeting lead to a new record of Central Bank intervention in the currency markets in a single day (1 Billion USD).

This represents the classic thinking of a bureaucrat. If there is a critical topic that requires careful consideration and will affect millions of people (such as to float or not to float a currency), what is important is the survival of its own bureaucratic organization and not the people!  The decision taken then (to float) proved to be disastrous. Although Pierre was against it, he was so for the erroneous reasons, following the classic "me first" motto. Yeah… this is exactly the type of self-preservation that we must demand from an economist who is also the director of an all-powerful economic organization that has such an impact on billions of lives. Yeah…

Per Jacobsson, from Sweden, was Managing Director from November 21, 1956 to May 5, 1963

Economist and lawyer. In 1956 the UK Parliament debated the economic crisis, partly because the money came from the IMF.

The condition of the loans was that the British Chancellor should carry through a deflationary programme as stiff as the IMF considered necessary. What was not divulged was that Dr. Per Jacobsson, the director-general of the Fund, had demanded a 7 per cent Bank rate which Mr. Lloyd was loath to grant. At the time 7 percent would hit hard investment, rent increase, slow down trading, rising the cost of manufacturing, impact entrepreneurship, farming, exports and significantly increase the costs of carrying a debt. At the time this was considered a "quackery", to " slash national output and make war on the workers"

The Economist has described Dr. Jacobsson as "a tremendous one-man band, and although it regards the success of the IMF as largely his personal achievement it suggests that an inner directorate—`a compact; creative and decision-making group keeping in touch with the informed public'—might be better for the IMF than the present dictatorship.

Per managed to impose a ridiculous set of financial conditions to UK. This represents the archetypical type of conditions that subsequent IMF Directors will impose on other countries with so much success that several countries have opted to leave the IMF altogether than having to bow to ridiculous demands. In this sense, it was argued that Per acted as a dictator, which is the style that other IMF directors have also adopted. And remember, Per was an economist so it is not credible that he did not know the type of chaos and damage that these "measures" would cause in UK. Yeah… this is exactly the type of measured and commonsensical actions that we must demand from an economist who is also the director of an all-powerful economic organization that has such an impact on billions of lives. Yeah…

Ivar Rooth, from Sweden, was Managing Director from August 3, 1951 to October 3, 1956

Lawyer and economist. Ivar classified by the US government as "ineffective".

Being classified as "ineffective" by the US government is as close as somebody can get to being told he is useless without actually breaking protocol. This is even more pathetic, considering that Ivar was an economist and, surprise, surprise, the IMF is a financial institution! Yeah… this is efficiency level that we must demand from an economist who is also the director of an all-powerful economic organization that has such an impact on billions of lives. Yeah…

Camille Gutt, from Belgium, served as the IMF's first Managing Director from May 6, 1946 to May 5, 1951

Economist, politician and industrialist. When the International Monetary Fund (IMF) was created, the US wanted to determine its director. However, the US candidate Harry D. White was discarded following espionage accusations. Then the Belgian-born Camille Gutt was proposed. Gutt was originally a journalist and a jurist, who was described as having "a very high sense of integrity and honesty, both in political and personal life." In the 1930's as finance minister he is credited with helping to save the Belgian franc both before and after the Second World War. In March 1939, he was instrumental in transferring part of the Belgian gold reserve away from the Nazi threat, to London, the US and France. After WWII he conducted a monetary reform to fight inflation which "is now the example of what should be done after liberation," and "it set the example for France’s revaluation and creation of the New Franc in 1959."

Being a "Plan B" after a guy being suspected of espionage is not exactly flattering. If anything, Camille got appointed for not being a spy. Additionally, although he save some of the Belgian gold from the Nazis (which was sort of common sense), he conducted a monetary reform which is an example that was copied in 1959 when France switched to the New Franc…which lost 84% of its value due to devaluation in about 40 years. Yes. That New Franc. Brilliant example! Yeah… this is exactly the type actions that we must demand from an economist who is also the director of an all-powerful economic organization that has such an impact on billions of lives. Yeah…

These are the people who so far, have managed the IMF. Remember, vast amounts of your money is in their hands. For any intent and purpose, they are dictators in our organization (the IMF) which is paid with our money and to which we loan our wealth. People that are allegedly or really corrupt, libertines, masters of the economic universe, rush to act, impulsive and all around dictatorial. These are the people we trust to deliver the goals of the IMF:

The IMF’s main goal is to ensure the stability of the international monetary and financial system. It helps resolve crises, and works with its member countries to promote growth and alleviate poverty.

Of course! Silly us. The fact that they get out of their ways to lend money tin pot or crack pot dictators or politicians who are addicted to easy money will undoubtedly foster "stability of the international monetary and financial system". Obviously. And when these tin or crack pot people waste all the loaned money, we should not worry because the IMF will be there to "resolve crisis" and work with those very tin or crack pot people to promote growth and alleviate poverty. Of course! Silly us!

Look, this is not complicated. To "defer" to "experts" (yes, we are being politically correct) these kinds of decisions is downright lunacy! What we see is that mini-dictatorial apparatchiks make massive decisions with our money based on deeply flawed ethical, moral or -even worse- economic theories! And when inevitably crisis, debacles and disasters arrive, they all scream in unison: How is this possible?! We did all we could!

The whole point is that anytime you have a single failure point, you will have massive failures because single points tend to fail miserably, no backup, no safety net; particularly in economic or financial issues (we talked about this in our article In Latin Sounds Better).

And do you know what the punch line is here? That our analysis above was perform from a Mainstream perspective! Using their data! This is, even according to current -ridiculous- legal and economic rules, the people above criticized failed our expectations!

Yeah… right… Like the Four Horsemen of the Apocalypse (if you subscribe to that sort of thing); Conquest (economic and financial), War (economic, financial and actual), Famine (what else is there to say) and Death (yeah… the "final" solution). Because this is actually what the IMF delivers in the end. And yes, being the IMF a dictatorship we are fully entitled as citizens, residents and tax payers to rise our hands towards these people and point our collective fingers: Guilty!

Look, we don't really care if in their spare time they walk through lava with their bare feet in order to save cuddly kittens or if they hunt fluffy animals at night in order to practice buggery and other medieval sports. We really don't. The only thing we ask is that they do it with their money! If they are so sure of their actions, then they should put their money where their mouth is. How about a little incentive program, such as the ones that hedge fund managers "enjoy"; no profits, no salary! Only in their case it would be, no stability or no growth or no decrease in poverty or crises, no firgging salary!

Unless you believe that the IMF is doing such a wonderful job. That oh-so-many-people sing praises to this organization because they are oh-so-grateful of their dealings. Sure. Just one thing. If you ever take a vacation in a country that was so… helped… by the IMF, we have an advice for you: don't mention it! In general terms, the human body does not react well to beatings. You have been warned.

Note: please see the Glossary if you are unfamiliar with certain words.

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