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U.S. Postal Service Starts Quoting SDR to Dollar Conversion Rates, and IMF Endorses Replacing Dollars with SDRs
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.1Of
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:
- Convert the U.S. dollar amount to the special drawing right (SDR) value and enter it in the SDR value block. For example:
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).
»
- advertisements -
For Baltimore Uncle Sam had Fort Bragg's Division of Air Lift ready to drop and I think also the 10th Mountain as well as another division should Baltimore become Urban war.
It would not be the first time that City was disarmed or otherwise taken out of a bigger picture.
I think riots stopped when not only the military actions on scene but also each block organized by community center to feed the children with protection by open carrying citizens against the looters and rioters who would steal the food or try.
No matter. It got settled. I was (Along with my family) were kept out of the metro area for the year. By then much damage was done in large sections of the city.
I consider it fortunate that the two or three divisions was not called upon to engage militarily against Baltimore in that specific example.
Exactly. There were a number of riots throughout the 60's. Detroit comes to mind. And even more modern one's in the 90's (Rodney King in LA). I'd say that they perfected this strategy of letting them riot, loot, burn and kill each other for a few days before moving in back, during the 60's.
Ostensibly they use the time to organize the local troops. But it has the side benefit of making it easier for them when they do move in. The force is justified by then, and the locals are happy to see order restored.
I was in LA during the 1992 riots and it kind of seemed like that's what happened. The police vanished from the streets for the first 2 days and then the National Guard came in without ammo. The rioting stopped when the Guard announced that they had loaded their weapons.
Yeah, cocoa, these baskets smell like price controls, central planning, one world government, the EU magnified into a really big, Big Brother. Just say no to totalitarianism.
I think folks need be looking for Coming to Jesus meetings.....
This is getting real prophetic..........fast.
Everything I know about religion I learned from my big sister. She once saw me playing w/ a pile of change, and came over with a picture of a dude w/ a beard and said "give your pennies to Jesus."
It takes major effort to believe in someone who lets assclowns like Pat Roberson run around sullying the brand without smiting him by now. Or else one must believe He got a wicked sense of humor!
According to the Bible, the only ones who believe in God are the ones to whom God gives the ability to believe. And according to the Bible, if God wants you, he'll get you. In his own time. Save your pennies.
No , no , thats not from the Bible , thats from Calvin , called predestination , its a farce, and a lie . I Tim 2: ..."4who wants all men to be saved and to come to a knowledge of the truth. 5For there is one God and one mediator between God and men, the man Christ Jesus."
According to the Bible, the only way to salvation is through Jesus. And Jesus himself said, no man comes to me except the Father which hath sent me (God) draws him. No draw, no come. Calvinists don't usually point to this as support for their position.
Of course, there is that other thing that Jesus said: If I be lifted up, I will draw all men to me. Kind of contradicts what I said above, doesn't it. Oh wait ... Jesus said he was God - in human form.
the amero is coming! the amero is coming!
head for the hills!
the end is near!
lol
you guys are really and truly entertaining
We all realize that this is your way of creating personal cash flow and I do not begrudge you your job but I must ask. How is it that you do sleep at night knowing that when you look into the mirror in the morning all you see is a liar and a tool. For the life of me I cannot understand your kind for to me you and yours are nothing more than an appendix just waiting to end up in a op room bio bag. Good luck to you and enjoy the view when you shave tomorrow morning.
know your enemy
VW show me the light! only you can see the truth!
hahaha i may not see the truth, but i can sure see bullshit from a mile away!
got to run now boys, i'll leave you alone to your little circle jerk of dreaming for some disaster to arrive.
Enjoy your whine and donkey punch party.
LOL! that's easy when it freely flows from your pores!
have fun, toodles!
Sure, everything is great, and the dollar is invincible...
Would the government lie to us?
I read about this, but did not see THAT article, thanks for your hard work, much apreciated.
I see something WICKED this way comes in this piece.
"We're now capable of doing renminbi settlement in many parts of the world," said Chris Lewis, HSBC's head of trade for greater China. "All the other major international banks are frantically trying to do the same thing."
Can U Say BANK RUNS boys n Gurl's?.......
I see PM's going thru the roof, as this info goes truly mainstream AmeLican.
George,
As the national post office who sent parcels to countries where businesses wouldn't accept dollars, what would you do? How would you even pay onward carriers for their services? Would you offer an alternative soverign denomination or something a little less political? And if you're sending parcels there and already have dealings with such a currency unit, why not offer that as an insurance payout option?
You knew the reaction your article would get. I personally didn't expect such ignorance on FX matters, but anyway. Either it's a mass conspiracy spearheaded by a postman or its an attempt at customer service.
I'll take Occam's razor.
EG
And VW is truly a Troll/Douchebag
Entertaining.
Now think carefully for a moment.
If that US Post Office starts charging something like .70 cents US to pay for ONE current .44 cent stamp (Hell, I only buy Forever stamps and dont even fugging know the actual value of them today...)
Then everything else will expand in price by at least 40% in US Dollars to pay for the SDR exchange.
If this thing takes off and eliminates the United States of America and the entire USA Money system based on the dollar, we are effectively finished.
There will be hell to pay and a rubicon to cross before MANY millions of Americans will accept this.
How is your debt? Do you owe 100,000 dollars on your mortgage today? Fine, see it go to about 150,000 when they get the conversion done.
Or have no debt at all and 100,000 in your nest egg of a bank? See it deflate to about 60,000 dollars while everything you consume in the USA as you live day to day inflate in price an equivilant amount.
I wont stand for it. Gwan, laugh all you want. But me? nuh uh.
By the way you earned my first junk today.
Acceptance isn't an option , unless you wish to starve . Can't buy or sell without the number .
If you convert purchase price to SDR's, wouldn't you also convert paycheck to SDR's? If price increases by 40%, wouldn't pay also increase by that amount?
Upon reflection, I see that my question is worded improperly. I'm asking about the issue of proportion. If dollars are being revalued in terms of SDR's, wouldn't all dollars be revalued - debt as well as income? You used to owe us this much in dollars. Dollars have been replaced by SDR's, so this is the new, lower amount that you owe. To go with the new, lower amount of income you are earning.
Example: I used to earn $500 per week; now I earn 500 SDRs per week (gives me a new, lower level of income). Or, I used to earn $500 per week; now I earn however many SDRs it takes to equal the old $500. To me, it doesn't matter which of these options they choose. Whatever option is applied to income should also be applied to debt, in order to stay consistant. And in that consistancy, the proportion of income to debt would remain the same, regardless of which option is chosen.
I suppose you could revalue dollars going forward such that any unpaid income and all debt would retain the original value of the dollar. But since doing this would bring about the collapse that HungrySeagull described, enlightened self-interest suggests they would revalue all dollars - debt as well as income. But then, if everything retains the same proportion, what is the point in revaluing?
I'm having a problem accepting that reasonably bright people would revalue the currency for no effect, or in a way that would cause the problems HungrySeagull described. Surely there is some middle ground that would have some effect without trashing the economy. Or else all this talk about revaluing the currency is just blowing hot air??
The problem isn't neccessarily with whatever conversion ratio of USD to SDR, its the comparitive ratios they use for everybody elses currency. Your paycheck may be devalued at X%, and your mortgage may be converted at the same X%, but what happens when your imported Chinese widgets only get converted at Y%, and oil producers at Z%? You might have held your ground against the loan, but every imported product you need to live in a globalized world just shot skyward.
And of course the initial conversion would be held to some reasonable ratio to assist conditioning. After its entrenched, the numbers could be played at will. If you think the money games are bad now, wait until FX is under direct control of the global elites. Unlimited economical warfare against any country that doesn't bow to their will. "won't play ball with us? we'll set your SDR conversion to .000001!, you won't be able to afford to import a single thing, and we don't even have to enact a single trade sanction, a single UN resolution, or a popular vote! The market will do it for us while we stay sqeeky clean"
BTW, that's paraphrased from one of George Soros' books on his vision for the future that he's trying to enact.
Regardless of the conversion rates, the real issue here would be a lessening of our reserve currency status. If THAT were to happen, we see everything we know in the US go up in smoke. BTW, we will be screwed on the conversion as well...nice huh?
Someone get a lot of rope...
Thanks.
Well, NO. Debt never get's revalued down, they would see to that, and your debt would go up that same 33.3%...................U Fk'd
If you got paid 500 SDR's, you just got a 33.3333 raise, in reality, you will be taking a HAIRCUT of 33.3333.....
IOW, cut your pay in SDR's by a THIRD.( Or your $500.00).........same, same.
You pay in SDR's is $333.33 a week.( i.e. U Fk'd).
No way to win on this, We get haircuts.
The fact that you've needed to explain that also explains why Cheeky hasn't bothered posted anything in ages.
Payroll will cease to exist when Companies collapse under the increased expenses and a falling value of thier money whatever form it is.
Sure I suppose you can pay the worker in SDR via payroll. But somewhere someone is losing and somewhere someone else is gaining by this conversion and it aint gonna be either the company or the worker.
Oh no...here it comes
I really hate to suggest that a massive scam is in the works, cause only the best and brightest from elite families and the very best schools are worthy enough to determine the fate of the great unwashed hordes like the proletariat here at ZH, plus Wayne, Garth, everyone in Aurora, IL, the Simpson family, you know... But we ain't Charlie Brown and we're taking that football away from Lucy.
Isn't that redundant? :)
What happened to AL GORE?
INDIA bought the GOLD from IMF with SDRs.....not dollars....i just hope the guys in our central bankassayed the GOLD properly( remember TUNGSTEN salted bars)...so there it is ...the SATANIC one world currency
reuters quoted that india used 'hard currency'. i don't think anyone, even the globalists, would consider SDRs a 'hard currency'. methinks they traded silver for gold.
Keynes' idea seems far too Rube Goldberg-ish to me. There is nothing naturally capitalistic about. The "incentives" are totally fabricated. I'm no laissaz fair supporter, seems we will always need some prudent framework for capitalism to function in the real world. But it should be kind of like backyard soccer: here is the boundary, here is the goal, now go have fun.
Right. The point of a gold standard is that you can trade paper for gold. With this "commodity standard" what are you going to do, trade your bancors for a gift basket filled with corn, crude oil, gold, silver, pork bellies, frozen concentrated orange juice, soybeans, pig iron, etc, etc, etc? Sounds like a great way to discourage anyone from ever trading in their notes, meaning DEBASEMENT AHOY!
blatant 33% devaluation
great find, GW - thank you for keeping us informed. . .
all the puzzle pieces are beginning to illuminate the picture.
you mean illuminati the picture?
+100 hefnerkerze
Does that mean debt is increased by 40% once SDR takes over from USD?
No, it means they would KICK the POST OFFICE out, after year ONE.
If the ratio is 1.5-1 USFRN, that's a 33-1/3% kick in the teeth.
Acclamation by design, and in that sense, nefarious.
It makes me sick Lennon.
+1 Subliminal subjugation. Soon to be incorporated in Dick and Jane storylines.
Post Office and SDRs??? That is well beyond coincidence
Looks like it takes USD 1.5091 to buy one SDR according to the IMF site.
http://www.imf.org/external/np/fin/data/rms_five.aspx
WOW
Nice find GW
Are they giving pension conversions. That might be the big tell.
U.S. Postal Service posts $3.8 billion loss.
Holy $hit man................This is it! Big currency devalutaion.........