What is more stable? A world filled with economically viable nations, or a world filled with economic uncertainty? Clearly, the former scenario is more suggestive of peace, as well as prosperity. Hence there is a continued need for the International Monetary Fund to promote global stability by fostering stable currencies and orderly exchange arrangements. The dissolution of the Bretton-Woods system of fixed exchange rates, based upon gold reserves in 1973, meant that now governments were
This also meant that a world of stable governments could now be directly equated with a more stable international currency exchange. This meant that the IMF, which was begun in 1945, would play a more crucial role than ever in ensuring global stability as now currency values were tied to perceptions of government integrity, rather than gold reserves. free to print as much money as they desired, and it was up to governments themselves to ensure that inflation did not spiral out of control ("Gold at the IMF," 2006, IMF). The IMF constantly monitors general global economic trends and provides advice to member nations so they can maintain effective and free market economy within their borders and it promotes cooperation between members by training nationals of member nations for government and central bank offices ("What is the IMF" 2007, IMF Official Website). It also provides aid to nations that need help with easing their balance of payments. This means that when nations find themselves short of foreign currency based on changes in the exchange rate and their payments to other countries will exceed their foreign exchange earnings, the IMF will step in and provide a loan ("What is the IMF" 2007, IMF Official Website). As well as promoting financial stability and political stability the IMF also works to sustain high levels of employment by providing technical assistance and advice to countries in need, such as developing nations. The guiding presence of the IMF promotes cooperation, a healthy market economy and a more stable world.