IMF SDRs as New Global Fiat Currency?

[Brian4Liberty]

IMF Silently Creates New Money Layer, Why You Need to Leave the Banks: Willem Middelkoop

The International Monetary Fund’s special drawing right (SDR) – the international reserve asset created in 1969 to prepare for a new dollar crisis – is undergoing a renaissance with important worldwide repercussions says Willem Middelkoop, author of the Big Reset. "The announcement of the largest-ever increase in SDR allocations, which will greatly improve the liquidity of many developing nations, signals alignment between the US and China in a key area of global monetary power," he tells our Daniela Cambone.

Key point: The IMF SDR is a basket of currencies including the Chinese Yuan, thus the Chinese have wanted to expand the SDR program. The Trump Administration had opposed SDR expansion, but Biden and Yellen have given them the green light to fire up the SDR printing presses.

[Brian4Liberty]

IMF’s $650 billion liquidity boost could happen in August -U.S. Treasury officials

WASHINGTON (Reuters) -A $650 billion increase in International Monetary Fund reserves could be distributed to member countries in August, but only a small portion is likely to be converted to hard currency by poor countries, U.S. Treasury officials said on Thursday.

The Treasury has formally notified Congress of its plans for the new allocation of IMF Special Drawing Rights, starting a 90-day consultation process that will be completed in early July, officials told reporters on a conference call.

While the amount is below the threshold requiring approval by Congress, the $650 billion SDR allocation must be approved by the IMF’s Board of Governors, made up of the institution’s 190 member countries. Treasury said the expansion aims to provide providing additional liquidity to countries struggling with the coronavirus pandemic, helping to avoid debt problems.

U.S. Treasury Secretary Janet Yellen first backed the SDR allocation – previously opposed by the Trump administration – in late February. Last week, IMF Managing Director Kristalina Georgieva said she would present the fund’s smaller executive board with a $650 billion SDR expansion proposal by June.

Some Republicans in Congress have criticized the move for providing reserves to rich countries that don’t need them, as well as to countries they view as U.S. adversaries, including China, Russia, Iran and Venezuela. They have also raised concerns about more U.S. borrowing needed for countries to convert their SDRs to hard currency.
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More: https://www.metro.us/imfs-650-billion-liquidity/

[Brian4Liberty]

To Protect American Taxpayers, the U.S. Must Block Massive Expansion of International Monetary Fund’s Special Drawing Rights
James Roberts - October 16, 2020

There is a proposal circulating in Washington, under the pretext of aiding developing countries affected by the pandemic, to increase the amount of Special Drawing Rights (SDRs) to be available at the International Monetary Fund (IMF) by up to 2 trillion SDRs (about $2.8 trillion). It is being promoted by politicians and think tanks on the left, the foreign aid community, George Soros,1

“Soros’s suggested method provides aid that will “enable, encourage, and reinforce” voluntary compliance with international standards relating to environment, education, and labor. His proposal? The richer countries in the IMF issue Special Drawing Rights (SDRs) for international assistance—i.e., international reserve assets—a process that shares the burden equitably, with the United States paying its fair share. A board of “eminent persons” chooses who’s eligible for assistance, and a separate audit commission evaluates those chosen.” George Soros, and the Chinese Communist Party, among others. The concept of a vast expansion of SDRs was discussed at the IMF’s spring 2020 meeting of the International Monetary and Financial Committee.
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The annual cost to American taxpayers to fund just the associated interest-rate and credit-risk subsidies of that massive additional amount could run into the tens of billions of dollars annually.
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China is also pushing hard for the SDR expansion. There are a number of reasons why the ruling Chinese Communist Party wants the increase. The most obvious motive, at the moment, is General-Secretary Xi Jinping’s desire to burnish China’s image as a world power on par with the United States. In that quest, Xi won a major victory when the IMF added the Chinese renminbi to the SDR basket of world reserve currencies in 2016.

That was done by the IMF in spite of the fact that the Chinese currency is not fully convertible. Convertibility is central to the definition of a global reserve currency. Xi wants the renminbi to be perceived as fully convertible due to its presence in the IMF basket, while retaining his government’s power to manipulate the Chinese currency.
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More: https://www.heritage.org/internation...sive-expansion

[devil21]

But but but Zippy told us all for many years that the SDR was useless because it was so old and lame and wouldn't be expanded?!?

It's interesting how he was booted off RPF right before all of the stuff we said was being planned, which he swore we were wrong on all of it, started rolling out....


(Though, fwiw, he would have said that the SDR is not a currency but rather is a global unit of account made up of weighted currencies, and he would be correct)