DenisL

Why the SDRs Are DOA

Wonderfully clear article!
There is a great deal of potential mischief possible in these statements:
"There are two ways holders of SDRs can obtain the underlying currencies in exchange. First, members can arrange a bilateral voluntary agreement. Second, according to the IMF, it can designate members with strong external positions (current account surpluses) to purchase the SDRs from members with weak external positions. This second method of obtaining SDRs is more suggestive, and does not appear to have ever been used."

How about if the Federal Reserve starts buying these up with printed dollars....or another country does? This is a way for the Fed to give money to the UK to save it from bankruptcy, and hide/obscure that one is doing it.

Interesting times.