a new Reserve Currency

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investorzzo's picture
Status: Diamond Member (Offline)
Joined: Nov 7 2008
Posts: 1182
a new Reserve Currency

A week ago, the head of the International Monetary Fund, Dominique Strauss-Kahn, suggested the global lending organization might be called upon to provide its 186-nation constituency an alternative to the U.S. dollar as a reserve currency.
In response to calls by China and Russia to supplant the greenback with special drawing rights—the IMF's internal accounting unit—Strauss-Kahn said, "That day has not yet come. But I think it is intellectually healthy to explore these kinds of ideas now."
Special drawing rights were devised by the IMF in 1969 to replace gold and silver in large international transactions and to serve as a supplement to central bank reserve positions. Though freely convertible in IMF transactions, SDRs aren't a currency. Instead, they're credits that a nation with a trade deficit can use to settle balance-of-payment debts. Since SDRs are ledger entries, their use eliminates the logistics of shipping bullion back and forth to settle national accounts.
SDRs represent the value of a trade- and reserve-weighted basket of currencies, including the U.S. dollar, the euro, the Japanese yen and the pound sterling. The SDR basket's makeup is determined every five years by the IMF executive board and is due for its next revamp later this year. Currently, the SDR basket is weighted as:
U.S. dollar: 41.1 percent
Euro: 36.1 percent
Japanese yen: 13.5 percent
British pound: 8.9 percent
The IMF recently increased the SDR float to 204.1 billion, now worth about $313.2 billion.
This year's reset of SDRs is bound to reflect ongoing shifts in central bank reserves positions. In particular, the IMF executive board will consider rejiggering the SDR to reflect a diminution in the dollar's heft.


Davos's picture
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: a new Reserve Currency

New reserve currency: Gold and silver Money mouth

John99's picture
Status: Gold Member (Offline)
Joined: Aug 27 2009
Posts: 490
Re: a new Reserve Currency

If the IMF currency is adopted, we are lost - everyone on the whole planet included.

A supranational fiat money printer, issuing all currency as debt with a world police force to collect the interest payments. We will be forever debt slaves. We have to fight this, big time!

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