by James Rickards
The International Monetary Fund (IMF) is one of the most powerful institutions in the world. It acts as the de facto central bank of the world. The IMF makes loans to countries in distress, raises funds from its member nations and issues its own world money called the special drawing right (SDR).
It also acts as the regulatory and policy arm of the Group of Twenty, or G-20. The G-20 is a multilateral club that includes both the richest nations in the world (the U.S., Japan, the U.K., Germany, etc.) and the most populous emerging economies (China, India, Brazil) among others.
The G-20 has no permanent staff or bureaucracy, so it outsources policy tasks to the IMF. These combined roles as the world’s central bank and the G-20’s eyes and ears make the IMF the center of gravity for policy in the international monetary system.