The SDR (Special Drawing Rights), created by the IMF in 1969 is a non-convertible reserve asset distributed by the IMF. Let\u00e2\u20ac\u2122s back up\u00c2\u00a0before we\u00c2\u00a0move forward. Any currency is simply a tool of barter that enables a population to specialize because it can be converted into the goods and services needed. For example, if you want an apple, you do not need to own an apple tree. If you have US dollars you can go to the grocery store and convert them into an apple. The US dollar is a convertible reserve asset, and as \u00e2\u20ac\u0153The\u00e2\u20ac\u009d world\u00e2\u20ac\u2122s convertible reserve currency, it was the only currency that could be used globally to settle debts, therefore it could be used to convert (buy) to oil, steel etc. between countries.<\/p>\n
The SDR, as a non-convertible reserve asset, acted more like an ice cube in a glass of water. You have a glass of water half full, you throw a bunch of ice in and now it looks full, but when you drink the water, you\u00e2\u20ac\u2122re left with the ice cubes. So the IMF would give the SDR\u00e2\u20ac\u2122s primarily to third world nations and that would make their reserves look full and then they could take the limited amount of US Dollars they held in reserves and convert them into oil, steel etc. In addition it was used to increase a particular country\u00e2\u20ac\u2122s foreign exchange reserves so that their books looked stronger making it easier to borrow money on a global basis.\u00c2\u00a0 Originally the SDR\u00e2\u20ac\u2122s value was based upon gold, but now its value is based on a basket of four of the top trade weighted currencies. This basket reweights every 5 years and according to the IMF website, the next scheduled reweighting is the end of 2010.<\/p>\n
About a year ago it seemed as if everybody was calling for a new world reserve currency to supplant the US Dollar.\u00c2\u00a0 China and the UN happened to mention the SDR. This made the most sense because of the SDR\u00e2\u20ac\u2122s long history and significant infiltration throughout the global postal services, the travel industry, not to mention that all governments now hold them in their reserves, so governments and central bankers are used to them.<\/p>\n
In August of 2009 the members of the IMF met and passed the fourth amendment, which went into effect on September 9, 2009. With regards to the SDR, the IMF allocated $250 billion worth of SDR\u00e2\u20ac\u2122s in order to increase global liquidity (inflate the world\u00e2\u20ac\u2122s monetary system).\u00c2\u00a0 There have been two other SDR distributions; the first was between 1970 and 1972 and the second time was between 1979 and 1981. Can you remember the bouts of inflation experienced during these time frames? But those SDR amounts were miniscule compared with the current allocation. This allocation increased the amount of SDR\u00e2\u20ac\u2122s in existence from $4.3 billion to $254.3 billion.\u00c2\u00a0 Quite a significant jump, but here is the kicker.\u00c2\u00a0 The SDR prior to September 9th 2009 was a non-convertible reserve asset.\u00c2\u00a0 On September 9th 2009 the SDR became convertible.\u00c2\u00a0 That means that whoever holds SDR\u00e2\u20ac\u2122s can now convert them into oil, steel etc. and is in direct competition with the US dollar.\u00c2\u00a0 What\u00e2\u20ac\u2122s more, as of February the SDR was listed on the Forex currency exchange under the symbol of XDR, making the conversion to a full official currency complete.<\/p>\n
The dollar\u00e2\u20ac\u2122s dominance is being eroded in a world of debt based currencies. No currency\u00e2\u20ac\u2122s purchasing power is safe as long as it remains under the control of governments out of control spending, and central banks unlimited ability to create more debt and stick the citizens with the bill.\u00c2\u00a0 Everyone who owns dollars needs to start buying gold coins<\/a>.\u00c2\u00a0 Build your position before it is too late.<\/p>\n","protected":false},"excerpt":{"rendered":" The SDR (Special Drawing Rights), created by the IMF in 1969 is a non-convertible reserve asset distributed by the IMF. Let\u00e2\u20ac\u2122s […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1207],"tags":[58,111],"class_list":["post-256","post","type-post","status-publish","format-standard","hentry","category-blog","tag-global-economic-crisis","tag-sdrs"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/256","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/comments?post=256"}],"version-history":[{"count":0,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/256\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media?parent=256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/categories?post=256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/tags?post=256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}