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Strategies & Market Trends : The Aristocrats (tm) -- Ignore unavailable to you. Want to Upgrade?

To: sense who wrote (2630)	8/11/2021 6:32:56 PM
From: sense	Read Replies (1) \| Respond to of 5629

Reading between the lines on the SDR issuance... From the intro to this link: Republican Senate Leadership on IMF Special Drawing Rights (SDRs): A Fact-Check SDRs are a reserve asset issued by the IMF to its member countries. SDRs have a value that is based on a basket of five major currencies. Governments can exchange SDRs that they are holding for hard currencies, most often the dollar or euro, although the requesting government has to show need in order to do this. The other party to the exchange, who supplies the hard currency, is a government that has a surplus of hard currency reserves and volunteers to make the exchange. The main advantage of using a new issuance of SDRs during the pandemic, in order to help individual countries in need, as well as to stabilize the world economy, is that the process is simple and can be relatively quick. An IMF issuance of SDRs does not cost the United States — or any IMF member country — anything. These reserve assets are not loans that have to be repaid, and therefore do not affect the sustainability of member countries’ public debt. Nor do they have conditionality attached to them. Hurray !!! The IMF has invented a free lunch !!! So, the SDR's are "money printing" by the IMF... with a few conditions limiting exchange... but with ZERO real attachment to anything... they're just "made up" and issued "out of thin air"... and everyone else will agree to pretend that they have real and legitimate value in relation to conversion into other fiat currencies... SDR's are... free money... but, are free money that, unlike the debt based backing for the U.S. dollar... says it is not a loan and does not have to be repaid... but, it is fully convertible into dollars at face value... so that U.S. debt [which U.S. taxpayers do have to repay] will be purchased by SDR holders using the free money they've been given... that THEY don't have to repay... but, all of that is a debt that YOU do have repay... So, the point, and the reason... the more SDR's issued... the more debt can be issued as dollars... So, "the other party to the exchange, who supplies the hard currency, is a government that has a surplus of hard currency reserves and volunteers to make the exchange"... means that the Fed that has been buying treasuries hand over fist [monetizing the debt] ... as the government is issuing new bonds hand over fist... means the Fed has a huge surplus of hard currency reserves... and they can't sell the bonds they've been buying... because if they do... they will crater interest rates down below zero... or send them soaring... when no one other than a bank that is required to will buy them at below market, or below zero, interest rates... Since the Treasury and the Fed can't sell the "surplus reserves" they are creating by borrowing faster... and they can't or won't use them to leverage lending into the U.S. economy that spurs actual investment and growth... and as they are choking on that massive wad and need to get rid of those "surplus reserves" that they hold in bonds... they're now going to GIVE THEM AWAY... Only, they're not going to give them to you... as that would be debt forgiveness that would destroy the value of the currency, that is based on that debt... and they're not going to let you off the hook that easily... SDR recipients get "free money"... and U.S. taxpayers have to repay that money to the banks... when they convert their SDR's into dollars... each dollar is still an obligation that has to be repaid... As bad as that is... the worst part of it... is that they're giving away money in a way... that seems it clearly declares the beginning of the realization in the death spiral of the dollar has begun... That would explain why "in markets" the dollar is soaring... and gold is crashing... Because... the opposite of that is what is really happening... "It's only $650 Billion"... and that's actually true... So, note from the prior post "it's not enough"... Unless you can see how this actually fixes anything... you might expect this is merely a camel's nose under the tent... and it will probably accelerate rapidly from here... destroying the dollar, and all fiat currencies. But, what else does it mean ? It means that, while inflation is real... they are now trying to EXPORT the inflation... so that the people who didn't have money last week... are suddenly rolling in it this week... converting them into avid consumers of whatever things will encourage "an allowance" from the U.S. to swap SDR reserves for dollars, thus converting the SDR's into dollars... that will be spent as agreed... in spite of "Nor do they have conditionality attached to them"... So, expect this allocation of free money just printed... will mean food commodity prices soaring... ? And, it will be a massive subsidy for the vaccine makers... But, it will probably also mean many more gold and silver buyers... in the third world... all using debt you have to repay... to load up on gold and silver bought with that "free money" you just gave them... Because, while "Nor do they have conditionality attached to them" is an obvious lie... those who get the SDR's are likely no less adept as liars... The only way to stay ahead of that... is to buy gold and silver faster than they will... using your money ?