OPPOSE

FOREIGN OPS APPROPRIATIONS

CONFERENCE REPORT
November 3, 19 97

Dear Colleague:

T he Foreign Operations Appropriations bill passed by the House wisely omitted any funding for the
International Monetary Fund. We must oppose the Conference Report appropriating $3.5 billion for
the IMF’s New Arrangements to Borrow (NAB), “ justified” as “ protecting the international monetary
system” (bailing out countries which have spent and inflated more than others and seek their salvation
at U.S. t axpay er e xp ense) .

T he most facetious argument made is that there no is “cost” f or the “transfer of assets” ev en tho ugh it
requires an appro pria tion: w
e give the IM F $3 .5billion an d it give s us a fina ncial inst ru men t en titling
us to the $3.5 billion, plus interest. T he fallacy, of course,
s thiat th is mo ney is tak en ou t of the
economy, re moved fr om av ailable sour ces o f cr edit and is n o lo nger available to the ave rage Am erican
citizen. Bankers and investors on Wall Street would have purple pockets tomorrow if we put purple
dye on the money we sent to corrupt foreign governments today.

Even Bill Simon and George Schulz, both former secr etaries of the T reasu rydvo , a cate abo lish ing th e
IMF because it has a po or track r ecor d of pr even ting fin an cial cr ises. T h e p ost war Br ett on W oo ds
Agreement established the IMF to maintain the pseudo fixed-exchange rate system. After it collapsed
in the early 1970's, the IMF recreated itself.I ts new dev elopme nt m issio n merely dup licates more
able institutions. Both the Cato Institute and the Frien ds o f th e Ea rth want it ou t of th e de velo pm ent
business.

T he IMF is nothing more than an international e ngine”

“ for in flation “ f ueled” by the c reatio n of credit .
Its Special Drawing Rights are an international fiat currency whereby weak cur ren cies bail ou t the
even weaker one s. Fluctuating fiat unbacked)
( currencies e ventually lead to financial bubbles and
inflations corrected by recessions or depressions. Worldwide currency and financial conditions today
are exactly opposite of what a market-determined, single hard currency would produce. Our
inappropriate loan subsidies, such as those through OPIC and the Ex-Im Bank, socialize the cost to
corporations of risky ventures when these weaker economies predictably threaten to default.
Although it’s tempting to divert blame from central bankers (e.g. the Fed and IMF), the responsibility
truly lies with the U.S. Congress which abdicates its responsibility over monetary policy and
appropriates funds to the IMF.

T here is no U.S. be nefit to c ontin ue d p articip ation in the IMF. Financial con ditions ar ou nd the wor ld
are as precarious now as they have ever been with a financial bubble built on inflationary fiat money,
including IMF mischief. tI warrants immediate an d se riou s discu ssio n regarding the nee d f or a sound
currency based on real value.Unfortunately, ceon omic and f inan cial chaos aro un d th e wo rld will o nly
serve as an excuse for the believers in strong international government to further intervene and pursue
their goals. We need less government, less inflation and less international management of our
currencies and our economy and more emphasis on a sound currency,
fre e ma rke ts, an d individu al
liberty.

Sincerely,

Ron Paul, M.C.