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U.S. Postal Service Starts Quoting SDR to Dollar Conversion Rates, and IMF Endorses Replacing Dollars with SDRs

George Washington's picture




 

Washington’s Blog

I have repeatedly pointed out that it is possible that the IMF's special drawing rights (SDRs) will become the world's reserve currency.

And as I noted in April 2009, there is some possibility that the "Bancor" will ultimately fill that role:

But you probably have not heard that:

China's
government has floated a variant of this idea, suggesting a currency
based on 30 commodities along the lines of the "Bancor" proposed by
John Maynard Keynes in 1944.

Indeed, the head of the China's central bank wrote recently:

Though
the super-sovereign reserve currency has long since been proposed, yet
no substantive progress has been achieved to date. Back in the 1940s,
Keynes had already proposed to introduce an international currency unit
named "Bancor", based on the value of 30 representative commodities.
Unfortunately, the proposal was not accepted. The collapse of the
Bretton Woods system, which was based on the White approach, indicates
that the Keynesian approach may have been more farsighted. The IMF also
created the SDR in 1969, when the defects of the Bretton Woods system
initially emerged, to mitigate the inherent risks sovereign reserve
currencies caused. Yet, the role of the SDR has not been put into full
play due to limitations on its allocation and the scope of its uses.
However, it serves as the light in the tunnel for the reform of the
international monetary system.

Keynes proposed that the
Bancor was to be fixed in terms of 30 commodities, of which one would
be gold. The arguments for currency fixed on a basket of commodities
was that it would stabilize the average prices of commodities, and with
them the international medium of exchange and a store of value.

As
China's central banker said, the goal would be to create a reserve
currency “that is disconnected from individual nations and is able to
remain stable in the long run, thus removing the inherent deficiencies
caused by using credit-based national currencies”.

But Keynes' Bancor proposal did not only entail pegging SDR's to a basket of currencies:

He
proposed a global bank, which he called the International Clearing
Union. The bank would issue its own currency - the bancor - which was
exchangeable with national currencies at fixed rates of exchange. The
bancor would become the unit of account between nations, which means it
would be used to measure a country's trade deficit or trade surplus.

 

Every
country would have an overdraft facility in its bancor account at the
International Clearing Union, equivalent to half the average value of
its trade over a five-year period. To make the system work, the members
of the union would need a powerful incentive to clear their bancor
accounts by the end of the year: to end up with neither a trade deficit
nor a trade surplus. But what would the incentive be?

 

Keynes
proposed that any country racking up a large trade deficit (equating to
more than half of its bancor overdraft allowance) would be charged
interest on its account. It would also be obliged to reduce the value
of its currency and to prevent the export of capital. But - and this
was the key to his system - he insisted that the nations with a trade
surplus would be subject to similar pressures. Any country with a
bancor credit balance that was more than half the size of its overdraft
facility would be charged interest, at a rate of 10%. It would also be
obliged to increase the value of its currency and to permit the export
of capital. If, by the end of the year, its credit balance exceeded the
total value of its permitted overdraft, the surplus would be
confiscated. The nations with a surplus would have a powerful incentive
to get rid of it. In doing so, they would automatically clear other
nations' deficits.

As FT Alphaville's Izabella Kaminska reported recently, the IMF has recently floated the idea of SDR and perhaps ultimately Bancor as world reserve currency:

FT Alphaville missed this IMF paper when it first came out in April, 2010.

Authored by Reza Moghadam, director of the IMF’s strategy, policy and review department, it discusses how the IMF sees the International Monetary System evolving after the financial crisis.

 

***

 

In
the eyes of the IMF at least, the best way to ensure the stability of
the international monetary system (post crisis) is actually by
launching a global currency.

 

And that, the IMF says, is largely
because sovereigns — as they stand — cannot be trusted to redistribute
surplus reserves, or battle their deficits, themselves.

 

The
ongoing buildup of such imbalances, meanwhile, only makes the system
increasingly vulnerable to shocks. It’s also a process that’s
ultimately unsustainable for all, says the IMF.

 

***

 

All in all, the IMF believes there has simply been too much reserve hoarding going on:

Reserve accumulation has accelerated dramatically in the past decade, particularly since the 2003-4. At
the end of 2009, reserves had risen to 13 percent of global GDP,
doubling from their 2000 level, and over 50 percent of total imports of
goods and services. Emerging market holdings rose to 32 percent of
their GDP (26 percent excluding China). Twenty-seven of the top 40
reserve holders, accounting for over 90 percent of total reserve
holdings, recorded doubledigit average growth in reserves over
1999-2008.

 

Holdings have also become increasingly concentrated, with over half the total held by only five countries.
These numbers exclude substantial foreign assets of the official sector
not recorded as reserves, including in sovereign wealth funds (SWFs),
and yet invested in liquid, dollar denominated financial instruments,
that have grown even more in recent years.1

Of
course, in the first instance, the solution probably lies in closer
collaboration between sovereigns, most likely via the more active use
of such things as special drawing rights, says the IMF.

 

But
in the end, a global currency makes the most sense, the paper concludes
— especially since the SDR is currently just an accounting tool that
draws on the freely usable currencies of member states , not an actual
currency itself.

As they summarise:

48. From SDR to bancor.
A limitation of the SDR as discussed previously is that it is not a
currency. Both the SDR and SDR-denominated instruments need to be
converted eventually to a national currency for most payments or
interventions in foreign exchange markets, which adds to cumbersome use
in transactions.

 

And though an SDR-based system would move away
from a dominant national currency, the SDR’s value remains heavily
linked to the conditions and performance of the major component
countries. A more ambitious reform option would be to build on the
previous ideas and develop, over time, a global currency. Called, for
example, bancor in honor of Keynes, such a currency could be used as a
medium of exchange—an “outside money” in contrast to the SDR which
remains an “inside money”.

But before you get ready to burn your fiat currency, it’s not actually a turnaround the IMF sees being executed any time soon.

 

As they conclude:

It
is understood that some of the ideas discussed are unlikely to
materialize in the foreseeable future absent a dramatic shift in
appetite for international cooperation.

However, in a possible indication of how seriously the SDR is being taken, the U.S. Postal Service is quoting SDR to dollar conversion rates:

  1. Convert the U.S. dollar amount to the special drawing right (SDR) value and enter it in the SDR value block. For example:
  2. INSURED VALUE
    $100.00 (U.S.)
    65.76 SDR

(Here is the original web page, without highlighting.).

A search of the U.S. Postal Office website shows that - as of April 2008 - the relevant web page did not have any reference to SDRs. The most recent revisions to this web page were made on July 30, 2010. However, I cannot tell whether the references to SDRs were added in the most recent July revision, or in a previous edit.

I
am not implying that this is nefarious. I'm not entirely sure what this
means, but - as far as I can tell - no other currencies other than SDRs
and the U.S. dollar are mentioned in this section of the Postal Service
website. At the least, it is interesting.

The Swedish postal service is also purportedly giving SDR conversions.

Whether or not SDRs (or Bancors) are coming soon, one thing is for
certain.  The dollar is losing its luster as world reserve currency. 
See this, this, this and this.

Update: Further digging shows that
some postal services have adopted SDRs as part of the international
multilateral agreements of the Universal Postal Union, an international organization of postal services. See
this website from the Czech Republic, for example, from October 2009.

The earliest reference to postal service use of SDR's which I have found is a January 2007 version of the Swedish post office's website, stating:

Posten's
responsbility for lost or damaged International Parcel Post is limited
to SDR 40 per mailing + SDR 4.50 per kilogram of the gross product
weight, in accordance with the acts of the Universal Postal Union (UPU).

 

 

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Mon, 09/20/2010 - 13:33 | 592418 David Merrill
David Merrill's picture

 https://docs.google.com/leaf?id=0B1EaV_bU7VImY2RkZmVjYTMtYTA0Yy00ZTVmLTgwYjctNmU2ODIwODMyN2Fh&hl=en&authkey=CM7a0qwO

 

To help prevent this trend toward SDR's being the world's reserve currency print out these three pages, publish them at your county clerk and recorder and in your federal evidence repository if you have one ($39 Miscellaneous Case file will suffice) and send certified copies in to the address on the Notice before the deadline!

 https://docs.google.com/leaf?id=0B1EaV_bU7VImY2RkZmVjYTMtYTA0Yy00ZTVmLTgwYjctNmU2ODIwODMyN2Fh&hl=en&authkey=CM7a0qwO

 

Enjoy!

David Merrill.

Sat, 08/28/2010 - 10:26 | 550155 VWbug
VWbug's picture

ok george, i take it all back, you ARE a great cut and paster, the best ever, and i think you SHOULD quit your job.

i mean, that little bureaucrats job you have only lets you blog for like, what, half the day? I mean, come on, grab your gold plated pension that none of us private sector types have, and just do it!

but before you quit, get a loan so you can fund your book, self publishing is the way i'd go, you could pre sell it here on zh, i'm sure your legions of followers would send you some $$ in advance, i mean, they've seen your work.

i'm absolutely sure this venture will give you the reward you so richly deserve, and i am not being sarcastic!

come on george, you have the balls, you have mad skillz, do it!

Sat, 08/28/2010 - 23:18 | 550862 Apocalypse Now
Apocalypse Now's picture

Too desperate sounding, like you need attention.  Emotional heckling is the sure sign of a troll.  Your nom de plume of bug is most appropriate.  Who spends their time heckling bloggers, what is your motivation and who is paying you?

 

Sat, 08/28/2010 - 08:50 | 550085 TheDuke
TheDuke's picture

According to David Wynn Miller the world is controlled by the Universal Postal Union. Whilst I have reservations about this claim, I do find it interesting that postal services are recognising SDRs at this point in time.

Sat, 08/28/2010 - 10:12 | 550140 VWbug
VWbug's picture

no wonder dogs don't like postmen! they are aliens!

it's all fitting together now, ROTFLMAO

Sat, 08/28/2010 - 10:11 | 550138 VWbug
VWbug's picture

According to David Wynn Miller the world is controlled by the Universal Postal Union

hahahahahahahahahaha

i really should start reading some of these conspiracy sites, they sound far more hilarious than the latest apatow flick  lol

Sat, 08/28/2010 - 00:33 | 549887 Babalooee
Babalooee's picture

What about knowing your world's reserve currency will be ending in sdrs or the like......wouldn't it make sense to take advantage of the opportunity to distribute the pain of international ownership by printing while the printings still good?

Fri, 08/27/2010 - 21:50 | 549657 tony bonn
tony bonn's picture

sdrs , bancors, frn they are frauds by the bankster international masters of the universe to impose more control, servitude, and tyranny on the world....gold is more than sufficient to serve the role of money....anything else is a central banksters wet dream....

fuck the fed and the usps....

Fri, 08/27/2010 - 23:58 | 549847 JR
JR's picture

+1000, tony bonn.  You said it first and better; I spoke above before reading your comment. Glad, though, there's someone with your expertise who agrees with how I see this!!!

Fri, 08/27/2010 - 21:32 | 549627 silvertrain
silvertrain's picture

 Wouldn't SDR's eliminate the ability for the Fed to print in the future?

Sat, 08/28/2010 - 16:28 | 550553 knukles
knukles's picture

NO.

Fri, 08/27/2010 - 21:46 | 549651 Hephasteus
Hephasteus's picture

Doesn't matter the mechanics of it. It's secret. It's not understood. It's basing the most fundamental and prime social contract on something that nobody but the people who started it understand the basic premises of it.

Anything that starts with no explanation is a scam. Period.

Fri, 08/27/2010 - 23:51 | 549838 JR
JR's picture

As you say, six of one and half a dozen of the other—all the same people, members of the same monopoly dynasty devoted to the use of a power structure built on their tremendous quantities of fiat currency to manipulate, intimidate and control on a world scale.

As Griffin saw it, looking forward in his “pessimistic scenario” of the future, the Federal Reserve System would operate “as a subdivision of the IMF which is now the central bank of the world.”

Fri, 08/27/2010 - 20:34 | 549543 surfsup
surfsup's picture

"The dollar is losing its luster as world reserve currency.  See thisthisthis and this."

...

 

Yeah but with all the credit still outstanding the USD has what can be considered a "naked short" on it which as the debt goes back to source will pull the value of the USD up...  Until all the debt unwinds the prospect of another short covering rally in the USD is sitting right there...  Its like a 50:1 ratio of derivative value vs. what is in actual circulation so good luck on that USD short...    

Bring a helmet...

Fri, 08/27/2010 - 20:26 | 549531 Silversinner
Silversinner's picture

We in europe have had a convergion.In Holland we would get 1 euro for 2.2 gilders

Now ten years later a euro buys the same amount of shit a gilder did ten years ago.

Do the math and you know what will happen next time,we will be screwed.

 

Fri, 08/27/2010 - 20:21 | 549526 dryWash
dryWash's picture

good post, I consider the info as revealing the underlying process they are working towards-one currency, whether sdr's, bancor or something similar-what's in a name

Fri, 08/27/2010 - 20:13 | 549515 Hephasteus
Hephasteus's picture

There's one thing you guys are forgetting. This is all coming fast and hard and against alot of peoples wills. They are trying to shove cap and trade, SDR's, Green Movement, the whole 9 yards through like it didn't already go to shit. This is a drive the tires off the car moment.

Think broke government, unable to get the money to bring troops home much less supply them. Think divisions within the government so deep the grand canyon goes GOD DAMN would you look at that.This was all supposed to hold together till after elections where people would be demoralized by yet another lack of change and then followed by a resurged push.

This is going the force it anyway. Lose everyone your trying to force route. Upside. Everyone was going to retrench even harder next month until the end and then stock up again. Downside people won't restock as much so the inventory problems will be a breaking point sooner than october or november.

Fri, 08/27/2010 - 19:50 | 549484 Buck Johnson
Buck Johnson's picture

I've wrote about this before that their may be one currency for countries to use for trade and such and another for use internally of the country.  What this means is that imports are going to be expensive for many people and their will be inflation in said country, because what items that are able to be bought and/or manufactured in the US will cost more also (dollars chasing after fewer products).  I think something is in the works and they are slowly getting it set up so that it can transition without anybody feeling to much pain, at first.

Fri, 08/27/2010 - 19:31 | 549462 George Washington
George Washington's picture

I added this to the end of the post:

 

Update: Further digging shows that some postal services have adopted SDRs as part of the international multilateral agreements of the Universal Postal Union, an international organization of postal services. See this website from the Czech Republic, for example, from October 2009.

The earliest reference to postal service use of SDR's which I have found is a January 2007 version of the Swedish post office's website, stating:

Posten's responsbility for lost or damaged International Parcel Post is limited to SDR 40 per mailing + SDR 4.50 per kilogram of the gross product weight, in accordance with the acts of the Universal Postal Union (UPU).

Sat, 08/28/2010 - 02:20 | 549954 Lux Fiat
Lux Fiat's picture

Did a search on the USPS website for "SDR" and came up with the following from their 2004 annual report (http://www.usps.com/history/anrpt04/freview_018.htm):

Foreign Currency Exchange Rate Risk

We have foreign currency risk related to the settlement of terminal dues and transit fees with foreign postal administrations for international mail. The majority of our international accounts are accounted for based on International Monetary Fund special drawing rights (SDR). The SDR exchange rate fluctuates daily based on a basket of currencies comprised of the euro, the Japanese yen, the pound sterling, and the U.S. dollar. Changes in the relative value of these currencies will increase or decrease the value of our settlement accounts and result in a gain or loss from revaluation. The actual currency used to settle accounts varies by country based on individual agreements.

We purchase the required currency at the time of settlement, but when we know the timing and the amount of scheduled payments in advance, we may purchase short duration forward contracts.

At year end, we adjust the reported receivable and payable balances to reflect the fair value based on the SDR rate published in the Wall Street Journal on the last day of September. This resulted in a $10 million gain from the revaluation in 2004 compared to a loss of $9 million in 2003. We do not use derivative financial instruments to manage the risk of changes in the value of the SDR.

It appears that some geniuses on the Trilateral Commission (as one prior poster commented on), or other global harmonization effort (which have been ongoing for decades) thought that this was a great way to show progress in some annual update report.  Alone, I'm not concerned.  However, if you started seeing this popping up in many more places within a short period of time, I would get concerned that a 35% USD devaluation (or worse, as the first devaluation is usually not the last) was coming down the pike.

Fri, 08/27/2010 - 19:26 | 549451 spinone
spinone's picture

OK, folks, hold on

This is not some kind of switch to a new WRC.

I bait the ammo hoarders, but this is serious.  The dollar is WRC for the medium term.

The USPS may quote SDR's for some insurance reasons, but there is no conspiracy.

Everyone settle.  We have enough real problems without inventing problems.

Fri, 08/27/2010 - 19:22 | 549448 digalert
digalert's picture

Goodbye sawbuck, it was nice knowing ya.

Fri, 08/27/2010 - 19:01 | 549414 bigkahuna
bigkahuna's picture

GW, the keynes idea of equilizing deficits and surpluses is the lightning rod taking everyone to the lowest common denominator. There would be incentive to slack off, because someone else would take up the slack.

Fri, 08/27/2010 - 19:00 | 549411 minus dog
minus dog's picture

I distrust anything pegged to a basket of goods.  50 years later it'll be a basket of pocket lint, frozen waffles, and fill dirt.

Fri, 08/27/2010 - 18:31 | 549360 bugs_
bugs_'s picture

amerobancor

Fri, 08/27/2010 - 17:54 | 549278 Fred Hayek
Fred Hayek's picture

The U.S. Postal Service quoting SDR to dollar conversions?! 

It's like seeing Cliff Clavin and Newman at a Trilateral Commission meeting or something. 

Fri, 08/27/2010 - 17:25 | 549221 cbaba
cbaba's picture

Dumb ideas from Keynes and IMF, they are trying to steal our money again with a system of world reserve currency.

We dont need a world currency. Every country has to balance their own budget and spend accordingly.

Who the hell IMF is ? its another Rothschild's institution.

Why not every country backs their currencies by gold ? same as up until 1970's.

its that much simple. If US has not enough gold,  the relative purchasing value of dollar will decrease , that's simple math.

eveything else is another version of reserve currency.

 

Fri, 08/27/2010 - 19:29 | 549457 JR
JR's picture

Yes.

“When the IMF was created, it was the vision of Fabian Socialist John Maynard Keynes that there be a world central bank issuing a reserve currency called the ‘bancor’ to free all governments from the discipline of gold.  With the creation of SDRs, the IMF had finally begun to fulfill that dream.” – G. Edward Griffin

It’s clear that U.S. Treasury officials, IMF executives and Central Bank officials not ony favor but are working toward establishment of a single international currency, and SDRs could serve the purpose if the politics can be handled.  Recently, “Geithner was asked at a Council on Foreign Relations event in New York about People's Bank of China Governor Zhou Xiaochuan's call for a new international reserve currency," as reported in Bloomberg news.  “He said while he had not read Zhou's proposal, he understood it as a plan ‘designed to increase the use of the IMF's special drawing rights. And we're actually quite open to that.’"

It goes without saying that this would complete the Rockefellers’ dream of world government—with central bankers in charge.

It was John D. Rockefeller, III, who presented a check for $8,500,000 to Trygve Lie, First Secretary-General of the United Nations, to buy the land on Manhattan Island to house the UN building.  The date was March 25, 1947. 

Thus, the Warburg/Morgan (Rothschild) - Rockefeller group had not only established their private central bank, the Fed, in 1913 on US soil to control the world's soon-to-be reserve currency and to manipulate interest rates and the money supply around the globe, but they were able to gain a US headquarters, the UN, which they hoped would manipulate world events.

Although the bankers’ hopes that the UN would be the harbinger of world government did not materialize along the lines they had envisoned, the establishment of a world government can just as easily be achieved by a power jump to a world currency as part of a global fiat money monopoly.

A single currency means one-world government.  It would no longer be a debatable point.

 

Fri, 08/27/2010 - 20:43 | 549549 tip e. canoe
tip e. canoe's picture

JR, the bancor was to be derived from something tangible, real : gold, silver, oil, wheat, cocoa, copper, palladium, etc etc etc.  the sick brilliance of the SDR (nickname : paper gold) is that they took the concept and derived it instead out of something virtual, other fiat currencies (or current seas as johnjimi likes to say), heavily weighted on King Dolla.

with all due respect, you're allowing tiny tim to twist your conception of the original idea, which again is exactly what his intention is.

Fri, 08/27/2010 - 23:38 | 549821 JR
JR's picture

Gotcha on this one, I think,  tip.

In the words of Fed historian G. Edward Griffin:

“The methods by which the IMF/World Bank were to achieve their goals “was to terminate the use of gold as the basis of international currency exchange and replace it with a politically manipulated paper standard.  In other words, it was to allow governments to escape the discipline of gold so they could create money out of nothing without paying the penalty of having their currencies drop in value on world markets.”

Prior to the Bretton Woods conference, “currencies were exchanged in terms of their gold value, and the arrangement was called the ‘gold-exchange standard.’ This is not the same as a ‘gold-standard’ in which a currency is backed by gold. It was merely that the exchange ratios of the various currencies—most of which were not backed by gold—were determined by how much gold they could buy in the open market. Their values, therefore, were set by supply and demand.  Politicians and bankers hated the arrangement, because it was beyond their ability to manipulate…

“The method by which this was to be accomplished was exactly the method devised on Jekyll Island to allow American banks to create money out of nothing without paying the penalty of having their currencies devalued by other banks.  It was the establishment of a world central bank which would create a common fiat money for all nations…

“The theoreticians who drafted this plan were the well-known Fabian Socialist from England, John Maynard Keynes, and the Assistant Secretary of the U.S. Treasury, Harry Dexter White.”

White, who was simultaneously a member of the CFR and a member of a Communist espionage ring in Washington while serving in the treasury, eventually became the first Executive Director for the United States to the IMF.  Interesting that the current managing director if the IMF, Dominique Strauss-Kahn, is a Socialist/Communist. 

Robert Zoellick, the current president of the World Bank who replaced Paul Wolfowitz, is the former managing director of Goldman Sachs and a signatore to a letter drafted by the Project for a New American Century (co-founded by neoconservatives William Kristol [a former Trotskyite] and Robert Kagan) to President Clinton calling for "removing Saddam [Hussein]'s regime from power."

Fri, 08/27/2010 - 20:11 | 549514 RichardP
RichardP's picture

Doesn't the experience with the Euro in Europe right now suggest there might be some difficulty in implementing that world-wide for any length of time?  The natural tendency for humans is to break down into tribes and smaller groups.  There are quite a number of black markets going on just in Los Angles where members take care of their own and the medium of exchange is not always dollars.  I've always thought that humans were to ornery for the idea of one-world government to take hold in any meaningful way.  I've known many folks who were quite content to milk their cow, pick up their eggs, tend to their garden, and watch the sun set.  Who was president (or world ruler) at any given moment meant nothing to them.

Fri, 08/27/2010 - 20:44 | 549556 JR
JR's picture

Yes, there are barricades ahead for establishing a world currency and world government.  But the success of the Rothschilds and their satellites in nailing down nearly complete monetary and political control of the world’s only superpower and by far the largest economic power doesn’t quiet my nerves.  I would congratulate George Washington for keeping his eyes open. It is a wise strategy to fear an enemy that would cause wars without end upon innocents and would steal the livelihoods of mankind and rob the prospects of freedom forever.

As G. Edwad Griffin concluded in his magnum opus: “The Creature has grown large and powerful since its conception on Jekyll Island.  It now roams across every continent and compels the masses to serve it, feed it, obey it, worship it.  If it is not slain, it will become our eternal lord and master.”

Fri, 08/27/2010 - 19:38 | 549471 DosZap
DosZap's picture

And again,THE DOORS.

"THE END".

Fri, 08/27/2010 - 20:30 | 549534 JR
JR's picture

The End
This is the end
Beautiful friend
This is the end
My only friend, the end

Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end

Kill, kill, kill, kill, kill, kill

Fri, 08/27/2010 - 17:50 | 549267 tip e. canoe
tip e. canoe's picture

cbaba, b/c if Nixon didn't delink the dollar's allegiance from gold, we wouldn't be communicating with each other right now (again, see FOFOA's latest for reference).

now we can bicker about woulda, coulda, shoulda til the oil runs out but that ain't gonna change a damn thing.   the question is: what is the proper way moving forward?

is gold really the only answer?  not saying it isn't a component of an answer, but is it the only component?   feel free to chew on this question as you're eating your dinner tonight, especially if there is any grains in your meal.

Sat, 09/18/2010 - 23:24 | 590281 David Merrill
Tue, 01/25/2011 - 16:02 | 903713 GDE
GDE's picture

What's the source of these documents ?

Fri, 08/27/2010 - 18:22 | 549335 SpykerSpeed
SpykerSpeed's picture

Money arises spontaneously in a society.  Hayek and Mises explained this well.  Gold and Silver usually end up being the commonly-used coinage, and you don't need a central planner to make that happen.

Fri, 08/27/2010 - 20:45 | 549536 tip e. canoe
tip e. canoe's picture

yes, agreed, all for the spontaneous self-organization of society.  hell, i believe open-source complementary currencies is the wave of the future, but i'm strange like that.  

however, keynes never developed the bancor to be used between individuals, but between sovereigns in order to minimize trade imbalances.   is it perfect?  hell no.   but it seems that most are objecting to it not from the principle behind it, but through the names attached to it.   which plays right into the IMF's little greasy hands.

the questions are: is there a place/role right now for a global reserve currency that is not controlled by one sovereign entity and/or its minions?   if so, what should it based upon?   fiat currencies?  one commodity (for lack of a better word)?  a basket of commodities?

central planning really has nothing to do with these questions.

the issue i have with gold (or any other single 'commodity') - backed currencies is that it can be too easily manipulated and/or controlled.   a bunch of them, much less so.

Fri, 08/27/2010 - 19:36 | 549469 DosZap
DosZap's picture

Salma is a Economist too?.

Dayum!.

Fri, 08/27/2010 - 16:52 | 549154 TheMonetaryRed
TheMonetaryRed's picture

 

Why do people believe the story that the bulk of cash is held in government reserves?

It's held in private hands (very rich private hands). Those are just the numbers. 

I'm sorry if the rich people from whom the government borrows are not willing to pay themselves back in taxes, but why is it my problem? 

If they default on themselves, so be it. 

Fri, 08/27/2010 - 17:27 | 549223 tip e. canoe
tip e. canoe's picture

my thoughts exactly

Fri, 08/27/2010 - 17:25 | 549210 HungrySeagull
HungrySeagull's picture

Actually cash is just in the form of binary.

All of our cash or very nearly so is in the form of Binary language held in the bank computer listed by name, account number and it's amount.

The Federal Reserve working with the Treasury through certain cities and assisted by secondary locations hold actual cash. While the Mint continues to make more; from raw materials and other processed items further down the line.

If my credit union has about 200 people withdrawing payday today on friday, ... 500 dollars each perhaps? The Credit Union probably ordered from the Little Rock Reserve approximately 120,000 to 150,000 dollars to cover the expected average withdraws in cold cash last night or recently.

There is a hell of alot of payday withdrawls going on all over Arkansas today in varying amounts. ATM machines need feeding, Bank tellers need fresh money and so on all the way down.

But that is nothing compared to what Uncle Sam can move in a half day or a day if given enough notice.

The Nation can move much more green paper cash into millions of payday withdrawls and add up more electronically much much faster and in greater volume than a few fat and slumbering rich people can ever dream of in moments of clarity.

Fri, 08/27/2010 - 19:33 | 549468 DosZap
DosZap's picture

Ah So,

Well last I HEARD 2/3rds of real FRN's were all outside the USA.

Since it's the reserve currency used worldwide.

Fri, 08/27/2010 - 18:13 | 549323 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

much much faster and in greater volume than a few fat and slumbering rich people can ever dream of in moments of clarity

WAG THE DOG.

Fri, 08/27/2010 - 16:36 | 549124 Hannibal
Hannibal's picture

 

  1. "Convert the U.S. dollar amount to the special drawing right (SDR) value and enter it in the SDR value block. For example:
  2. INSURED VALUE
    $100.00 (U.S.)
    65.76 SDR"

Hm....Really? Looks more like a 35% devaluation of the USD

 

Fri, 08/27/2010 - 19:30 | 549461 DosZap
DosZap's picture

Well,it said 1.5-1......that's 33.33333, but, hey, what's 2.7777 among FWENDS?

Fri, 08/27/2010 - 16:30 | 549118 Bartanist
Bartanist's picture

Gee ... central banks for multiuple nations have worked so well for Europe. Why don't we do it for the whole world!!

Fri, 08/27/2010 - 16:21 | 549092 Joe Sixpack
Joe Sixpack's picture

"A search of the U.S. Postal Office website shows that - as of April 2008 - the relevant web page did not have any reference to SDRs. The most recent revisions to this web page were made on July 30, 2010. However, I cannot tell whether the references to SDRs were added in the most recent July revision, or in a previous edit."

 

This was going around last year. GHere is one example.

 

https://www.kitcomm.com/showthread.php?t=47779&highlight=USPS

Fri, 08/27/2010 - 15:53 | 549014 lookma
lookma's picture

Hi GW,

As others have pointed out, the Universal Postal Union uses SDRs as a currency unit for puposes of international postage. 

Example - http://www.mpo.cz/dokument65554.html

The international multilateral agreements of the Universal Postal Union (UPU), the so—called Acts of UPU, which regulate the international postal traffic among 191 member countries of this specialised governmental organisation of the UN system, use the SDR as the currency unit. SDR is a currency unit of the International Monetary Fund (SDR = Special Drawing Right — its currency code is XDR). According to the provisions of the Acts of UPU, the member states have to determine an average value of SDR in their national currency, to be effective for the coming calendar year, for the purposes of determining the postal rates' equivalents, compensations for items within the international postal traffic, the insured value for postal items or values of the international reply coupons. Section 36 of the Postal Services Act stipulates that the Ministry of Industry and Trade is the competent authority to determine this rate.

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