Does everybody need to know about Special Drawing Rights (SDRs)? The simple answer is Yes. If you want to know the Why, then continue reading. The changes that this global currency created by the International Monetary Fund (IMF) will cause countries to hit the reset button with their national currencies. It will soon become a game where those who knew about this topic and its implications will be winners. Many will lose a lot financially when the game of printing money out of thin air eventually comes to a logical conclusion. For the crypto haters, the global replacement currency is not a cryptocurrency. In fact, SDR is an artificial [global] currency created by the International Monetary Fund.
Quick History of SDR
Special Drawing Rights (SDR) was developed in the late 1960s by the IMF (International Monetary Fund). At this point in history, the IMF was afraid of a dollar crisis. The US initially promised the dollar would be as good as gold. In 1971, President Nixon announced that dollars could no longer be exchanged for physical gold. This meant the dollar was now backed by nothing. This situation created the dollar crisis, hence the IMF’s fear. The IMF originally created SDR as a successor for the US dollar. The currency never took off. Until recently, only $200 billion in SDR has been created in the last 50–60 years. That’s how SDR became a sleeping giant, waiting for a moment in history to be awoken.
2008 was nearly the moment. But not quite.
After the 2008 recession, China and the United Nations hoped the IMF would use SDR to help solve the world’s financial problems; however, it didn’t happen.
2013 saw a possible chance—still silence.
Greece had a debt crisis. The European Union and the IMF came in and saved the day with a bailout. SDR was used lightly to help Greece.
2016 was not the right time either.
The previous US administration didn’t want to have anything to do with SDR. The last US administration hated SDR because of their public distaste for China. Also, SDR means that the US dollar could be replaced as the world’s most potent currency and the global reserve currency that many countries trade with each other in.
The Quiet Revival and Rise of SDR
Special Drawing Rights (SDR) currency has been waiting for its time to shine. The pandemic was the right moment! Countries are asking the IMF for financial support due to the aftermath of this health crisis. That’s where SDR comes to the rescue.
With a different administration in power in the US, Treasury Secretary Janet Yellen got behind SDR in a letter she wrote to the IMF. By supporting SDR, Janet is showing alignment with China. As a result, the size of all SDR ever created is about to be tripled. Even the US Congress favours a $3 trillion allocation to SDR. That’s on top of the trillions of dollars the US has already created out of thin air. Oh, and it’s been reported, the US has another $4 trillion on the way.
“One side effect of the pandemic is that the IMF’s accounting unit is advancing beyond its status as an arcane currency basket — and could become an essential part of a future monetary reset.”
— Willem Midellkoop (The Oracle of Amsterdam in the Financial World)
Who suffers because of Special Drawing Rights?
While at first sight, nobody suffers, it does create some challenges and problems. Since SDR is built on a basket of other currencies (US dollars, Euros, RMB, Yen, Pounds), this means that their value will decrease over time at a faster rate. The price of assets like stocks and real estate will continue to rise. How is that a problem? If you have a country’s currency in your bank account or own other financial assets, this SDR global currency affects you significantly!
Key Takeaway
The popularity of Special Drawing Rights currency continues to rise due to the pandemic; however, there are some issues that everyone deserves to know about this global currency. The call for another “Bretton Woods Moment” by the IMF and the revival of SDR are signs of a global financial reset. It represents a reset of ALL currencies. That’s the bottom line.
So you need to understand the power of hard assets and why you need to own them. The money you have worked hard for will be devalued quietly behind closed doors using the revival of the SDR global currency. Be prepared when that happens!
