Special Drawing Rights

I did a quick poll in my own small circle of family and friends, and asked them if they'd ever heard about the IMF's Special Drawing Rights, or SDR. Only one of them, who also is into crypto-currencies like myself, had...

Based on my mini poll I guess that most of you, dear readers, also never heard about SDR. Because SDR has been in the back-pages of the news lately, and because of the public's relative unfamiliarity with it, I write today's short post as an introduction, and as a warning. In short, SDR is a currency created by the IMF in 1969 in anticipation of a possible dollar-crisis. As most of you may know, the U.S. made a promise to the world's nations in Bretton Woods, 1944, in which the then participating countries, the United States, Canada, Western European countries, Australia, and Japan, essentially agreed upon an international monetary management system with the U.S. Dollar as its main currency. Back then, the U.S. Dollar was still convertible to physical gold, and the promise made is still world-famous, namely that "the U.S. dollar is as good as gold".

However, when more and more nations began to exchange their dollars into gold, America had to default on their promise; then President Nixon announced in a 1971 address that the dollar would not be backed by gold anymore. In anticipation of this inevitable event, the IMF created the SDR in order to be able to add liquidity to nations in case of a dollar crisis:

The SDR was created as a supplementary international reserve asset in the context of the Bretton Woods fixed exchange rate system. The collapse of Bretton Woods system in 1973 and the shift of major currencies to floating exchange rate regimes lessened the reliance on the SDR as a global reserve asset. Nonetheless, SDR allocations can play a role in providing liquidity and supplementing member countries’ official reserves, as was the case amid the global financial crisis.
_{source: IMF}

As you can see in the quote from the IMF's official website, the SDR is nothing more than yet another layer of fiat currency, even if they claim on that same page that "the SDR is neither a currency nor a claim on the IMF." You see, the trick here is that "the value of the SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling," and that the SDR is exchangeable into these currencies. This all amounts to a hidden form of inflation. With the current pandemic that's lasted for more than one year now, more and more nations turn to the IMF for liquidity-assistance, and the latest news is that the IMF will create out of thin air 500 billion SDR for this emergency; that's almost triple the amount of SDR that's been created between 1969 and 2020...

This is yet another reason for people to leave the current system, to leave the banks and look for alternatives to fiat money in order to safeguard their income. The "smart money", that is rich people, are already doing this, which is part of the reason why bitcoin's price is skyrocketing; the price of silver and gold is artificially suppressed. I'll leave it to Willem Middelkoop, a Dutch investor, to explain in more detail. Please watch the below linked video; the IMF might become the first official Central Bank of the world...

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