It doesn't need to be backed by anything because nobody actually takes delivery of an SDR. If there was a new global currency basket introduced, nobody would take delivery on that currency either. Each party would transact in their local currency and just use the currency basket as a price discovery tool to figure out how much their local currency is worth to everybody else. The currency basket isn't actually a currency itself, just a way of working out who's cheating by devaluing their own currency.
So if I go down to the pub for some 'essential supplies', I can offer the bloke some SDRs in payment? OC
Here is an idea. Every country in the world hands over their gold to a central currency agency. The agency gets bound by a SET dollar value to an ounce. ie 1 WORLD Dollar is able to be issued for every ounce of gold or every 16 (?) ounces of silver the agency holds on it's books. IT HAS TO BE DOLLAR FOR OUNCE LOCKED AND NO FRACTIONAL PRINTING. Each country is given their exact number of world dollars for the amounts of gold and silver they handed over to the central agency. Every other commodity and currency is then rated against the value of the world dollar. So the total supply of World Dollars in circulation divided by the total dollars/pounds/euros in circulation sets the exchange rate. If a country prints the exchange rate worsens. All trade of all commodities is done in world dollars. So if a country has a surplus the amount of world dollars in their holdings goes up, a country with a deficit sees their world dollars decrease.. Effectively a PM standard that the whole world operates off of. Same thing happened around the World Wars. The US ran the biggest trade surpluses and hence the gold flowed to the states. Now that the states can't come close to the surplus they should be getting stripped of their gold holdings. The US hoodwinked the whole world by closing the gold window. They took the gold when it suited them but didn't want to hand it back when things turned south. The US will never want to go with this and the whole world would have to do it unilaterally for it to work and force them into it.
Interesting idea - just one point. Under the administration of the French President Charles de Gaulle up to 1970, France reduced its dollar reserves, trading them for gold from the U.S. government, thereby reducing U.S. economic influence abroad. In the end France demanded (and I can't remember the exact figure) but something over 270 tonnes of gold be returned in exchange for their dwindling USD.
China has again (2 days ago) asked for a new more stable world reserve currency and another US downgrade and I think it would become a serious issue. Something like the SDR my emerge but I think it has to include the yuan as well. It makes sense not to rely on any one country to hold the reserve currency.
^^ This, but China isn't going to un-peg the RMB from the USD until that happens (maybe not even after it happens). Personally, I think a new international currency basket should include USD, CAD, EUR, RUB, INR, JPY, ZAR, AUD, CHF, CNY, BRL, GBP, XAU and XAG in some formula to be worked out by people smarter than I am. Benchmarking everything against one currency controlled by a nation with a history of abusing its power is just dumb. It sort of worked for a while but something is going to have to change.
Hence why that criminal Nixon closed the gold window so they couldn't complete the full transfer. When government run continuous surpluses they need to be reduced of their wealth(Gold and Silver).
Even allowing countries to be able to manipulate will just end up in a disaster again. Even under a basket it is still manipulatable by one or more of the countries in the basket. If you peg it to gold and silver the rules of the game are very very simple and easy to understand and have a level playing field. No one cheats gold and silver in this way. Sooner or later gold and silver come back to bite paper. If the paper isn't given the opportunity in the first place to be given more value than it is worth then these imbalances don't begin in the first place and society can move forward without these fears of bubble and bust et al and all the rest that come with it.
carbon credits, just thinking about it makes me shudder.. if they moved onto a basket of currencies i doubt it would be backed by anything, going to a gold standard just goes against what the elite want so i cant see how that would happen unless there is a real revolution, i wish it did but im not very optimistic
It wouldn't be, but it would be significantly better than one nation controlling the world's reserve currency.
Even if it is a BASKET OF CURRENCIES it would still be one nation controlling money - the nation of Bankers.
Gold, USD or tic tacs The most important issue is WHO not WHAT. WHO controls the money WHO has all the money WHAT the money is comes second.
"Control the courts and the currency, let the rabble have the rest" I just can't remember who said it! Anyone have any idea???
The 'WHO' will stay the same, central bankers, thats not going to change unless something truly revolutionary happens like the world goes into a dark age and us serfs overthrow all governments and burn down the banks, i cant see that happening were too long gone and most people brainwashed now "I care not what puppet is placed on the throne of England to rule the Empire, ... The man that controls Britain's money supply controls the British Empire. And I control the money supply."
Domestication is a bitch............... some nations have a more domesticated population than others though
The more concise quote was; Give me control of a nation's money and I care not who makes her laws. Mayer Amschel Rothschild Kind Regards nonrecourse