IMF: Overview Jeff, Shanna, and Matt  Conditional Lender to troubled nations  1954: Peru receives first IMF aid package  1960: IMF sets first guidelines.

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Presentation transcript:

IMF: Overview Jeff, Shanna, and Matt  Conditional Lender to troubled nations  1954: Peru receives first IMF aid package  1960: IMF sets first guidelines to ensure uniformity for all nations  1974: IMF begins to hold nations’ governments more responsible for actions  1990’s: IMF forced to deal with new set of world problems

Tequila Crisis  1994: Overvaluation of Peso leads to currency crisis as foreign investors dump investments in Mexico  Peso falls in value over 50%  IMF forced to bail out Mexico  Mexico recovers, but word is out that IMF bails out deadbeats

Tequila Ripple Effect  Asian economies experience excess lending from foreign investment  Investors nervous about another Tequila Crisis  When Asian economies stumble slightly, investors panic, pulling money and causing a crisis  IMF steps in and helps, but not with the same results as Mexico  Many IMF loans to Asia still outstanding  IMF continues trend of helping deadbeats but IMF will soon pay the price

Argentina: The King of the Deadbeats  Tequila ripple effects Argentina as well  Argentina suffers from high interest rates and a falling stock market as a result of Tequila Crisis  IMF aids in recovery, which was successful for a time, but then…….

KABOOM!!!! December 2001, Argentina defaults on biggest loan in history!!!! $132 billion unpaid!!! Argentina officially the KING of the DEADBEATS! Prensa Libre de Argentina La edicion del Segundo de Diciembre, 2001

Present Day  Amount of money owed the IMF today has doubled since 1994  This trend shows how careless deadbeats have become  IMF should stop bailing out these deadbeat nations  By allowing individual nations to help themselves, IMF can judge how willing they are to reform  Deadbeats will learn best by correcting their own mistakes