Post From Philosophy of Metrics / By JC Collins
Reader Thoughts On “Are Emerging Markets About To Switch Us Treasuries For SDR Bonds? (Freepom)”
Original Post LINK
Speedspirit And what will all those hoarding cash do with that cash? Will they begin to use it or is it still important to save just in case?
hugovictor54 Dear J.C.: So what is the annual debt service on U.S. debt if the 10 year treasury bond yield is THREE percent? jack
Alan Thanks JC, Here’s a recent publication from Willem Middelkoop:
IMF’s ‘Substitution Fund’ to kick-start SDR as new global currency?
Beachdude Alan, Thanks for Posting. This quote from your link sums it all up nicely.
“The brilliance of the SDR solution is that it solves Triffin’s dilemma. Recall that the paradox is that the reserve-currency issuer has to run trade deficits, but if you run deficits long enough, you go broke. But SDRs are issued by the IMF.
The IMF is not a country and does not have a trade deficit. In theory, the IMF can print SDRs forever and never go broke. The SDRs just go round and round among the IMF members in a closed circuit. Individuals won’t have SDRs. Only countries will have them in their reserves.
These countries have no desire to break the new SDR system, because they’re all in it together. The United States is no longer the boss. Instead, you have the “Five Families” consisting of China, Japan, the United States, Europe and Russia operating through the IMF.
The only losers are the citizens of the IMF member countries—people like you and me—who will suffer local-currency infla- tion. I’m preparing with gold and hard assets, but most people will be caught una- ware, like the Greeks who lined up at empty ATMs in June 2015.
This SDR system is so little understood that people won’t know where the inflation is coming from. Elected officials will blame the IMF, but the IMF is unaccountable.
That’s the beauty of SDRs—Triffin’s dilemma is solved, debt problems are inflated away and no one is accountable. That’s the global elite plan in a nutshell.’
Beachdude Additional info on China and the SDR
Andrew Heilman I think that the much bigger effect this will have is not so much on Treasury accumulation as besides China, most emerging market nations have massive debt denominated in USD. That is what nearly choked the world last year. Imagine your debt going up 20% for now other reason than speculation…totally unbearable.
I think the SDR will be the mechanism through which many nations will refinance their debts away from the USD. The SDR would allow them to repay their debt in an SDR currency, including gold possibly.
JC Collins It is called SDRM – Sovereign Debt Restructuring Mechanism. I have written about it, along with the use of substitution accounts, extensively here on POM for almost three years. Both are, and will continue, to happen as expected.
Phil The fact that the Chinese and Russian elite are selling out with the Anglo NWO is utterly repugnant. What a repulsive backstabbing race – the Chinese. That’s all they do is take advantage of their own people then fuck off to the west. Absolute vermin if I ever saw it.
Llstudent JC, while not requesting investing advice, of course; what is the best way to approximate an SDR bond for individuals? What kind of interest rates would the SDR bonds have vs Sovereign currencies?
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!