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IMF Prepares For “Threat To International Monetary System”
Back in April 2010, before Waddell and Reed sold a few shares of ES, effectively destroying the market on news that Europe was insolvent, we made the following observation: “The IMF has just announced that it is expanding its New Arrangement to Borrow (NAB) multilateral facility from its existing $50 billion by a whopping $500 billion (SDR333.5 billion), to $550 billion.” Little did we know that our conclusion “something big must be coming” would prove spot on just a month later after Greece, then Ireland, then Portgual, and soon Spain, Italy, Belgium, and pretty much all other European countries would topple like dominoes tethered together by a flawed monetary regime. Well, based on news from Dow Jones we can now safely predict the following: “something bigger must be coming.” As if the IMF’s trillions in open lending facilities (many of which have recently been adjusted to uncapped) were not enough, we now learn that the world lender of last resort (which in theory is the Fed, but apparently Bernanke has been getting a little Read more…
IMF says weaker dollar would help global growth
AFP – The International Monetary Fund called for a weaker dollar to help the United States reduce its deficits with the rest of the world and rebalance the global economy, in a report released Wednesday.
In the report prepared for a Group of 20 finance chiefs meeting last week, the IMF said that its calculations showed the dollar remains “on the strong side” of medium-term fundamentals, while the euro and the Japanese yen were “broadly in line” and several Asian currencies, including China, were undervalued.
To address global imbalances, the G20 should allow the dollar to Read more…
IMF Calls for Dollar Alternative
The IMF is trying to move the world away from the U.S. dollar and towards a global currency once again. In a new report entitled “Enhancing International Monetary Stability—A Role for the SDR“, the IMF details the “problems” with having the U.S. dollar as the reserve currency of the globe and the IMF discusses the potential for a larger role for SDRs (Special Drawing Rights). But the IMF certainly does not view SDRs as the “final solution” to global currency problems. Rather, the IMF considers SDRs to be a transitional phase between what we have now and a new world currency. In this newly published report, the IMF makes this point very clearly: “In the even longer run, if there were political willingness to do so, these securities could constitute an embryo of global currency.” Yes, you read that correctly. The SDR is supposed to be “an embryo” from which a global currency will one day develop. So what about the U.S. dollar and other national currencies? Well, they would just end up fading away.
CNN clearly understands what the IMF is trying to accomplish with this new report. The following is how CNN’s recent story about the new IMF report begins….
“The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world’s reserve currency.”
That is exactly what the IMF intends to do.
They intend to have SDRs replace the U.S. dollar as the world reserve currency.
So exactly what are SDRs?
Well, “SDR” is short for Special Drawing Rights. It is a synthetic currency unit that is made up of Read more…
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