Can someone read this & tell me what to think?

[Mega]

http://www.reuters.com/article/usDol...00107420090604

Me?
Oh am just a dumb-ass i silly enough to think its away of move toxic loans off certain balance sheets.

Mike

[ASH]

Re: Can someone read this & tell me what to think?

My impression is that the SDRs are more about the needs of governments and central banks than commercial banks. I think they are a way for country A to get access to the currency of country B... for instance, if country A has a bunch of dollar-denominated loans coming due and has SDRs but no dollars, they could exchange the SDRs for dollars to pay the loans. If usage of SDRs was greatly expanded, they could potentially become the direct basis for international exchange. Right now, the intention is to settle accounts in national currencies, but the SDRs are exchangeable for those currencies. In the future, it might be possible simply to settle the accounts directly with the SDRs.

From the horse's mouth:

The Special Drawing Right (SDR) was created by the IMF in 1969 to support the Bretton Woods fixed exchange rate system. A country participating in this system needed official reserves—government or central bank holdings of gold and widely accepted foreign currencies—that could be used to purchase the domestic currency in world foreign exchange markets, as required to maintain its exchange rate. But the international supply of two key reserve assets— gold and the U.S. dollar—proved inadequate for supporting the expansion of world trade and financial development that was taking place. Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF.

However, only a few years later, the Bretton Woods system collapsed and the major currencies shifted to a floating exchange rate regime. In addition, the growth in international capital markets facilitated borrowing by creditworthy governments. Both of these developments lessened the need for SDRs.

Today, the SDR has only limited use as a reserve asset, and its main function is to serve as the unit of account of the IMF and some other international organizations. The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions.

[*T*]

Re: Can someone read this & tell me what to think?

I think it's more likely to be a slight move towards Bretton Woods III than anything directly to do with toxic debt.

[WildspitzE]

Re: Can someone read this & tell me what to think?

I think it's more likely to be a slight move towards Bretton Woods III than anything directly to do with toxic debt.

I agree, their constant talk about having their gold position for sale seems a bit of a contradiction if they want the SDR to be the one world currency.

[Glenn Black]

Re: Can someone read this & tell me what to think?

If you have lost luggage on an international flight (Warsaw Convention), you get credited so many SDR's, and those SDR's have standard exchange rate to all currencies. That is one way to credit fairly no matter what your home currency is.

SDR's as a line of credit will give countries a little extra financial slack so they can spend without immediate consequences of exceeding their reserves.

This can help, or give them even more rope with which to hang themselves (ie. loose currency, inflation, poor investments, etc.), as it all has to be paid back eventually.

[pwcmba]

Re: Can someone read this & tell me what to think?

Just sell all of the gold and get it over with - China will write the check and take it down at one price and hand over worthless paper USD.

Let's just end this thing. We all know where it is going. Send all the money(meaning gold) over to our creditors so we can pretend for just a little while longer that we can carry on as if we are not broke.

"now let's bring in Alan Funt and end this thing.." Lost in America, Albert Brookes

[Jay]

Re: Can someone read this & tell me what to think?

Just sell all of the gold and get it over with - China will write the check and take it down at one price and hand over worthless paper USD.

Let's just end this thing. We all know where it is going. Send all the money(meaning gold) over to our creditors so we can pretend for just a little while longer that we can carry on as if we are not broke.

"now let's bring in Alan Funt and end this thing.." Lost in America, Albert Brookes

Why sell all the gold? Why not keep it, debase the currency and stick our tongues out across the Pacific?

[touchring]

Re: Can someone read this & tell me what to think?

Why sell all the gold? Why not keep it, debase the currency and stick our tongues out across the Pacific?

Before that happens, the US billionaires and hundred millionaires will take out the money and send them to Europe and Asia.

[thunderdownunder]

Re: Can someone read this & tell me what to think?

Look I'm a dumb-ass but can someone PLEASE explain in simple terms why there is such a body as the IMF. Why would a functioning world economy need an extra layer of,--- well I guess it is a bank. What is its purpose and why does it exist. How did it come into existence and why does it remain and cause such hardship. It appears to me to be like a powerful country without a population that makes nothing, doesn't trade, has no borders, no real assets, is feared worse than a nuclear armed state and makes orders that are and must be obeyed, even to the point of anarchy.

Do we really need it and why is it so ???

Ive read what I can find but it seems me to be created from pure Evil to serve a Master that has no form. It indeed seems almost unanswerable to any one, court, state, country, or Nation. It appears to be Surreal.
Just learning on Itulip, thats all!
REMEMBER KISS (keep it simple Stupid)

[kingcopper]

Re: Can someone read this & tell me what to think?

Before that happens, the US billionaires and hundred millionaires will take out the money and send them to Europe and Asia.

Not if they want Obama and our military to protect them! moohoo haha!:rolleyes:

[c1ue]

Re: Can someone read this & tell me what to think?

Look I'm a dumb-ass but can someone PLEASE explain in simple terms why there is such a body as the IMF. Why would a functioning world economy need an extra layer of,--- well I guess it is a bank. What is its purpose and why does it exist. How did it come into existence and why does it remain and cause such hardship. It appears to me to be like a powerful country without a population that makes nothing, doesn't trade, has no borders, no real assets, is feared worse than a nuclear armed state and makes orders that are and must be obeyed, even to the point of anarchy.

Do we really need it and why is it so ???

Thunder,

You need to buy and read Dr. Michael Hudson's book: "Super Imperialism - The Economic Strategy of American Expire" either the original or the newer edition.

The IMF and World Bank were created as vehicles to promote America's economic interests around the globe. Their original charter was to promote trade beneficial to the US via loans to developing nations - originally Europe.

Today the charter has morphed into protecting American financial interests via a role as financial enforcer.

The IMF/World Bank strategy is a second take after America's first stab - the enforcement of European wartime debt culminating in the Versailles treaty debts on Germany - resulted in Hitler.