Economics, Free Philosphy of Metrics
Are Emerging Markets About To Switch Us Treasuries For SDR Bonds?
Reader Comments On Emerging Markets & SDR Bonds
wsw333 I’m an old retired guy whose better years are certainly behind me but throughout my years I have been told by many a successful person and witnessed (in my mind anyway) that “the small guy always gets crushed”.
So, if SDR bonds will be replacing US Treasuries at the central banks around the world who hold a large amount of them (I would presume), what market absorbs/buys them? These US Treasuries that they will be unloading, don’t just disappear do they?
My guess is that these US treasury notes will have to be sold to the retail marketplace, right? If so, the bond market to the retail investor will become attractive especially as interest rates rise, correct? Then, wouldn’t this suggest a significant downturn in stocks as well? Any comments/thoughts would be appreciated. Thanks!
mark branham SDR bonds Humm… It’s still the same game.
In 1913 “they” found another entity to assume the debt burden with the creation of the FED; now debt could be offloaded where all debt goes to die.
A hundred years later that entity is chock full of worthless paper so a new entity must be found, who better than one most people don’t have a clue about – better to hide the sausage.
Nothins new, just shifting the paper, it’s what the debt holders do to keep the gravy train rollin.
So the little people will continue to get screwed, the rich XXXXXX will continue to live off the work of the peons and the XXX will always roll down hill.
Don’t try to sell this ‘old XXXX’ as something new… it’s the same XXXXXX game.
Alan Don’t try to sell this ‘old XXXX’ as something new… it’s the same XXXXX game.
@Mark Branham your comment is boring.
I’m a subscriber to this website and I can tell you first hand that Mr J. Collins ain’t trying to sell you something @mark. For anyone that IS a ‘participant‘ at this website its clear that JC is simply offering a running commentary on the events unfolding in front of us in realtime – with regards to the multilateral transition away from the US dollar as the worlds reserve currency – and all that encompasses.
I’d like to suggest to you @mark that your understanding of what exactly this website offers is completely of the mark. As it seems your unwilling to part with the few ‘clams‘ it would require to acquire a membership, you’d do well to navigate the multitude of Free Pom articles that are on offer here at POM by Jared Collins before leaving such obvious uneducated comments [with regards to the material available here]. Just my thoughts. Thanks for reading.
Alan …”off the mark” that is. Would’ve been funnier.
JC Collins Thanks Alan. I wasn’t sure how to respond to that one.
Beachdude Alan, Marks comment is harsh perhaps but is somewhat similar to the view of Jim Rickards, whose comment I pulled out of your PDF link above:
The only losers are the citizens of the IMF member countries—people like you and me—who will suffer local-currency inflation…. That’s the global elite plan in a nutshell.’
Alan beachdude, the similarities haven’t missed me but my contention is not with mark’s perspective on the subject matter, it’s with the very clear accusation he made towards this website and that philosophyofmetrics.com is trying to sell the very thing with which mark is in opposition too. I think that is very clear, don’t you?
Don’t try to sell this ‘old XXXX’ as something new…
I’ll always speak up if someone presents a misinformed comment or directs an accusation towards something I feel needs some clarity. Who wouldn’t feel that obligation with something they’re proud of.
Anyways, to remain on point – perhaps it’s just my feeling – but I haven’t had the impression that philosophyofmetrics.com has ever tried to sell the idea of SDRs and this monetary transition we are experiencing to readers. No, this site has only ever impressed on me the possible consequences and likely outcomes of such materials.
Having read a few of marks online comments I’m actually surprised at the delivery of his comment above. He sounds like someone that shares very similar views with the material presented here at philosophyofmetrics.com and who could potentially offer some great contributions in this virtual space.
Dane “A press release providing the final currency amounts in the new SDR valuation basket to take effect on October 1, 2016 will be issued by the IMF on September 30, 2016. The first SDR interest rate based on the new basket will be determined on October 7, 2016, and will be applied for the week beginning October 10, 2016.”
– September 30th = Final currency amounts in new basket
– October 7th = First SDR interest rate determined
– October 10th = First SDR interest applied
How or will the SDR’s interest rate effect the basket currencies interest rates in their perspective regions at this stage?
JC Collins Investors will be looking for the best yields. With SDR bonds now being issued it’ll be interesting to see what the rate is. It just may force more interest rate increases to compete with SDR bonds. This is what I anticipate, but over an extended period of time.
Dane Haha intuition I guess…. Chair Janet L. Yellen
At “Designing Resilient Monetary Policy Frameworks for the Future,” a symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming
August 26, 2016
The Federal Reserve’s Monetary Policy Toolkit: Past, Present, and Future
mark branham For Alan, Debt is not money but we’ve been sold the idea that it is.
Exchanging sovereign debt for IMF debt still allows nations to issue debt which puts them in an inferior position to the debt holders… just as the american people are in an inferior position to the banks when the people “borrow” money(which is not money but debt)
My issue with this site is that it does not address the problem that enslaves us all, namely that governments borrow their own money and are obligated to pay interest on money it could and should create itself. And, commercial banks were granted the right to create money out of thin air with each “loan” they make. The creation of the FED made commercial banks the creator of our money(debt). These two issue must be solved. If not, the consequences are as I stated.
Shifting the creator of debt from nations to the IMF simply shifts the holder of debt that should never be created in the first place. Which means, things remain the same(which hitlery will do if elected which is why so much digital ink is spilled to demonize Trump)
I fully expect this scheme to move forward, but it should not. It just means more wealth for the oligarchs and more debt for the peons(us).
No progress will be made in the race for freedom and equality until the people are aware of the nature of money, how its created and who creates it. JC is accurately explaining what the oligarchs are doing to assure that they will maintain their wealth and power at the expense of the worlds people.
I think a better thing to do is expose the game of the money masters; even then much time will transpire before real change can happen. Why not start now.
Beachdude Mark, Very well stated. Debt restructuring from the USD into the IMF’s SDR just keeps the oligarch’s game afoot. Same as it ever was.
Alan But SDR allocation is not money creation, is it? They are potential claims on the freely usable currencies of IMF members.
JC Collins Yes, the money creation takes place at the central banks. The SDR system, at least initially, serves as a sort of currency pooling. It will evolve into a full reserve system in time. And thanks Alan for handling this comment flow. Your responses have been mature, informed, and stand in contrast to the diatribe which prompted it.
Beachdude JC, So it is a diatribe to suggest that “Debt is not Money.” And why is it a diatribe to question why every sovereign country must have a private Central Bank to create money out of thin air for which it can charge the sovereign (and its citizens) interest?
Seems that Lybia was able to survive for many decades creating its own money without a private CB. Don’t you find it curious that creating a new CB was one of the first acts after Gaddafi was removed?
JC Collins “Don’t try to sell this ‘old XXXX’ as something new…” That’s the diatribe. It’s an accusation against me and Alan drew attention to that fact. I think Alan was extremely clear on this point. Your comment is out of context from what was being communicated. And just for your own reference, my view on money creation and the central bank system has been made very clear over thousands of written words. If you don’t know what this view is you could always start reading from the beginning.
Ina-Lu Muresan JC, Thank you for clarifying my dilemma wrt the SDRM kickoff. Just a newbie question, actually two. How will the unpegged currencies (like the Swiss franc) be valued? Secondly, will the resource based currencies undergo reevaluation? You … Rock as usual. Ina-Lu
chris may isn’t this use of SDR bonds to replace use of US treasuries basically being used as a stop-gap for the next few years/decades? (its still all about paper/fiat money) and that years from now a more resilient system will have to be found (ie back to Gold standard, or something similar)
JC Collins SDR will transition into the world currency just like the European Currency Unit (a basket of currency like the SDR) was transformed into the euro currency.
Peter About time. I know SA has issues of it’s own but I’m sick of the Rand depreciating every damn fed meeting due to interest rate rise speculation. Just a big bomb that they created and now need to defuse and yet the states delay tactics just reek of government incompetence and people there think we are a 3rd country full of corruption. At least it’s honest straight in your face corruption lol
mark branham SDR bonds allow nations to continue to create debt and off load it to an international agency, which few people understand, deliberately, so as to allow the oligarchs to continue to rule the world… that’s the real purpose of the IMF and making SDR’s the new world reserve currency.
The issue is sovereign debt.
Instead of going bankrupt, or facing the wrath of bond holders when nations debase their currency thru debt expansion, imf SDR bonds keep the monetary game going.
I truly don’t know how to be more clear.
Debt serfdom is the result. Nations go into debt which makes them subservient to the debt holders. People go into debt “borrowing” money from a commercial bank.. making nations and people inferior to debt holders… so we have the situation that exist today where governments no longer make their own decisions, the financial elites, which I call oligarchs, make the decisions.
So we end up where we are today… nations and people ruled by self-serving oligarchs for the benefit of a very few. Given the natural course of events even a brain-dead bunch like us would soon catch on to the nature of the game played against us. BUT NO!!! Debt will now be off loaded to the IMF so the game can continue.
How is this not obvious???
So wake up people, only when that hundredth monkey knows will the game change.
JC Collins Mark, no one here would disagree with what you’re stating. You clearly cannot be accountable for your original comment which Alan called you out on. A process is being explained here and you would do well to read more material on this site before regurgitating what you’ve read elsewhere and put yourself in a position of conflict with the extremely intelligent people who frequent this site. Such an approach will not end well for you. Just giving you a heads up. Take it as you will.
mark branham To Alan’s point, I know the IMF is not going to create debt but swap for sovereign debt… that should have been clear from my comments but if not…
Another point. While central banks have the power to create money, until 2008 that power was mostly confined to open market operations. Only when cash for clunkers and first time home buyers tax credit failed to create enough “money” did the FED buy, hold, and potentially liquidate government debt. Most money creation takes place at commercial banks as”loans”. The only real money you, I or anyone else has is in your pocket, everything else is debt owed to a bank.
Fraud, corruption, theft, etc. are the natural consequence of a debt-money monetary system. Off-loading debt to the IMF does nothing to remedy that problem. You and all these extremely intelligent people may be accurately describing how the oligarchs plan to continue “farming” the people… but the people will remain serfs on the estates of the few.
The system has to change and only when led by extremely intelligent people will the hundredth monkey tip the the market to an equitable monetary system. The founders knew that more than 200 years ago. We seem to have lost that knowledge.
If you’ve confined yourself to an explanation of how the oligarchs plan to shift the game to the IMF, I will leave this space in peace.
JC Collins The fact that you have used your “confined” statement suggests you still don’t understand the response to your initial comment. You waste words stating the obvious while remaining unaccountable. Safe travels.
Xthegeneralx The SDR is the way out of the mess our US Fed got us into, in the first place. Albeit…our politician’s stupidity, not to create structural reforms, that deal with our economy in a positive manner. It’s what we all get for electing lawyers to Congress – those lying, cheating, scumbag slime!
It doesn’t mean, our problems are over; they have just begun! High inflation will hit the dollar hard. Purchasing power, reduced considerably! Those that don’t have gold, will wish they did (not paper gold). Gold miners will go nuts!
We cannot by SDRs. You need to own, the exact percentages of each currency, that makes up an SDR.
When this all goes down, we’ll be paying $7.00 for a gallon of gas…can’t wait! UGH! ?
Peter The end of petrol is hardly a bad thing. We should have been weened off it ages ago. If war fueled it would war end it? Hopefully not.
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