IMF to issue bonds

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 Quote:
China’s government has said it will buy $50 billion in notes. Russia and Brazil last month said they would each buy $10 billion of bonds from the IMF. India has also indicated it would contribute to an IMF bond program. The four nations make up the so-called BRICs. “This is a victory for the BRICs, particularly China,” said Claudio Loser, the former director of the IMF’s Western Hemisphere department. “Because they will be investing in the fund they will have, directly or indirectly, some say in the governance of the fund that goes beyond their quota.” The IMF’s “quota” system allocates voting rights to member states based on their financial contributions.
 Quote:
The notes will be denominated in Special Drawing Rights, or SDRs, which represent a basket of currencies consisting of the U.S. dollar, the euro, the yen and the British pound. Note sales denominated in SDRs would be paid interest on a quarterly basis, the IMF said. Chinese officials have sought a greater role over time for SDRs in an effort to reduce the U.S. dollar’s dominance in the global economy.
 Quote:
China’s central bank last month renewed its call for a new global currency and said the IMF should manage more of members’ foreign-exchange reserves, triggering a decline in the U.S. dollar. Lipsky said on June 6 it’s possible some day to take the “revolutionary” step of making SDRs a reserve currency.
http://www.bloomberg.com/apps/news?pid=20601087&sid=amDBHW9pdG28 This is REALLY bad news for us. Expect the value of the dollar to drop quickly.
 

pbm

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 Originally Posted By: Steve S
That is the idea ! The plan is to lower the U.S.A to a third workd level.
I guess you mean financially because in many areas of America we're already there.
 
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It's not like the Chinese haven't been crying out for reform and asking for reassurance of their US bond investment. Needless to say the IMF is laughing now...most likely all according to plan. If US $ goes too far into a worthless currency it becomes that much easier to gravitate towards a global currency. When that happens bye bye...
 
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 Quote:
When that happens bye bye...
Only for those who have yet to be culled/shaken down. The financiers and money changers will still get their due.
 
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Lovely. We're turning into another Russia, except without the natural resources to build first-world weapons.
 
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 Originally Posted By: sciphi
Lovely. We're turning into another Russia, except without the natural resources to build first-world weapons.
The rhetorical response I get when I point out all the loss of just about everything that made America the greatest country on earth is: "no one stays on top forever". That's someone who has plenty ..and will be dead before the full liability shows itself. Not that having plenty means you are and feel this way, but if you do/are, that's usually the position you're in.
 
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It's news. Probably more bad than good, but the numbers are really too small to have much impact. Fifty billion is likely less than one day's Federal spending here in the US. So bonds issued in some special SDR as they call it really will not make a big impact in the world economy and certainly not in the value of the dollar. Keep in mind, we are flooding the market with TRILLIONS in bailout moneys. So $50 billion is like soda pop money compared to what the 537 in charge in DC are doing, not counting the supremes.
 
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Actually devaluing the dollar, I.E. inflation is a smart move if you are in debt. Let's say you owe $10 to someone. Overnight, the dollar becomes worth 10% of it's original value. Your $10 debt is now the equivalent of owing $1. Our system has relied upon modest inflation to make managing debt more feasible. The sheer number of dollars owed increases. But since those dollars have less value, the REAL value of what you owe stays the same or drops, assuming you are not adding debt faster than the currency drops. Now if you do that, then you are really getting deeper and deeper into debt. This is why DEFLATION is so feared. You have to pay yesterday's debts with tomorrows dollars that are MORE valuable. That's a scary scenario for those who are counting on the dollar slowing dropping in value over the course of time. And if you have any debt, you are doing just that, hoping that the value of the dollar drops slowly over the course of time.
 
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Heck, maybe a more devaluation of the dollar is a good thing. It'll be painful, but it will also mean that we will need to start manufacturing more things here domestically. It's kind of the same thing as if China would float their currency more - in which it would be much higher compared to the dollar then it is now, and they would not have such a currency advantage in trade with us. They can sell at cut throat prices to us and gain it all back in the exchange rate.
 
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