Good site about SDR's

[simon13]

It looks likely that SDR's will be the new reserve currency when the USD can no longer take the strain.

www.philosophyofmetrics.com has a wealth of level headed information on the SDR.

In late 2015 the IMF will hold its 5 year SDR composition review. The RMB will certainly be included and all the papers i've read suggest the addition of gold anywhere from 5% to 50% of the SDR basket.

Anyone looked into SDR's much?

[Danny-boy]

It might help if you said what SDR's are in your SDR thread.

[simon13]

SDRs, Special Drawing Rights are a form of fiat currency or international reserve asset issued by the IMF, International Monetary Fund). SDR's are traded between IMF member countries and represent a claim on currency held by another member.

Currently SDRs are composed of a basket of currencies and is currently the US$ (41.9%), Euro€ (37.4%), Japanese Yen ¥, 9.4% and British £, (11.3%)

[Danny-boy]

Thanks Simon, I'll have a little read up on them.

[simon13]

Essentially SDRs are positioned as the lady in waiting as the new international reserve currency. And will definitely include the Yuan and probably gold by the end of 2015... Think of it as World Money and the only clean balance sheet left.

[shemyaza]

My questions are these;

Has the reset already happened?

If so, do any of us know the after effects of a reset on world markets?

What happened to the markets in past resets?

[simon13]

My questions are these;

Has the reset already happened?

If so, do any of us know the after effects of a reset on world markets?

What happened to the markets in past resets?

1. No

2. Although SDRs exist, they are poised to take the place of the dollar.  Either the USD will rescind its reserve status for the SDR or it will become the reserve currency when there is a major currency crisis , in which case it will have a stabilizing effect but will be relatively bad for the USA (because of the loss of reserve status) and not so bad for everyone else.

[sillverjedi]

Terrible news for the USA given that they will lose the hold on sanctioning nations that fall out of of line to there way of thinking. The Russians are currently experiencing a weak Ruble with high interest of 17% up from 10.5%. I'm sure if we had rates as high in the western world it would quickly bankrupt the majority of the western world Economies

[Stu]

http://www.nationmultimedia.com/opinion/Beijing-preparing-for-role-in-global-finance-by-en-30258621.html

Unsure how reliable this article is as a source, however the salient point is China will have to provide A statement on their gold reserves to include the renminbi/yuan in SDR's with the IMF this October. If this is the case, China may still understate their hoardings, however this could be a huge wake up call for the unsuspecting West and a cause a substantial increase in PM prices?

It was my intention to slow my pace of stacking lately, however adding this info to the mix, I think I will increase my efforts as long as spot price behaves itself over the next few months! (Like I needed an excuse)

[Stu]

http://www.bbc.co.uk/news/business-34961012

The yuan is confirmed as a component in the basket of currencies of the SDR's. Another significant weight placed on the east side of scales. At the same time China is redefining the weight standard in PM's to metric. 

[Scuzzle]

I an led to believe the US can still do a last minute veto on Chinese Yuan acceptance into the IMF SDR in a case of extraordinary circumstances, would be really snide but you would not put it past them to make something up at the last minute.

[Oldun]

NB it doesn't come into effect until September 2016.

[Stu]

The states are bluffing regarding reserves, likewise China but from different perspectives. The biggest issue with this scenario is that when the US public realise they have little influence, wealth and national credibility, the government will attemp to shoot their way out of trouble. 

[JB3]

My view: the SDR is a million miles away from being a viable reserve currency. There just isn't enough of them to underpin world trade.

 

There are only just over 285 billion USD-worth of SDRs in existence [1]. Meanwhile, seasonally-adjusted M2 stands at over 12 trillion USD [2].

 

If we switch to the SDR as the world's currency for the settlement of debt, what are we going to do after the first 30 mins?

 

 

[1] https://www.imf.org/external/np/exr/facts/sdr.htm

[2] http://www.federalreserve.gov/releases/h6/Current/

[shemyaza]

You'll find the currencies fluctuate around 789 SDR's per Gold oz and 1? SDR's per Silver oz. To understand the Global Barter (Derivative) System you must understand currency the 2nd System. Will do a recap of SDR values in Week 52's review. Per 3-4 Year Ratio bottom to top, top to bottom cycle (7-9yrs wave) Asset wealth in mass terms doubles (Outside of Monetary valuation) hence $4 Quadrillion if snapshot valued in the 2nd system. I'll go even further, Negative or Positive Money inflation hides the cycles. Zero inflation shows the cycles in full view to everyone. Intriguing where the data leads too. Just one conclusion, the above. Do the critical thinking and see what you come too.