This year, the world commemorates the anniversaries of two key events in the development of the global monetary system. The first is the creation of the International Monetary Fund at the Bretton Woods conference 75 years ago. The second is the advent, 50 years ago, of the Special Drawing Right (SDR), the IMF’s global reserve asset.
When it introduced the SDR, the Fund hoped to make it “the principal reserve asset in the international monetary system.” This remains an unfulfilled ambition; indeed, the SDR is one of the most underused instruments of international cooperation. Nonetheless, better late than never: turning the SDR into a true global currency would yield several benefits for the world’s economy and monetary system.
The idea of a global currency is not new. Prior to the Bretton Woods negotiations, John Maynard Keynes suggested the “bancor” as the unit of account of his proposed International Clearing Union. In the 1960s, under the leadership of the Belgian-American economist Robert Triffin, other proposals emerged to address the growing problems created by the dual dollar-gold system that had been established at Bretton Woods. The system finally collapsed in 1971. As a result of those discussions, the IMF approved the SDR in 1967, and included it in its Articles of Agreement two years later.
China to Take Over Kenya’s Largest Port Over Unpaid Chinese Loan No more Mr. Nice Chinese Guy. After years of “benevolent” handouts to various African countries by Beijing, all of which however came in the form of loans, of which few have led to viable, long-term projects and cash-flow generating assets,...
Jack Ma Warns US-China Trade War “Could Last For 20 Years” This is not what the market wants to hear right now. Hours after China’s Foreign Ministry said it would unveil its retaliation to the impending 10% US tariffs on $200 billion of Chinese goods “at an appropriate time” – a...
Soros Loves Kush! Jared Has $1 Billion Debt to George and His Pals Jared Kushner didn’t disclose his business ties with George Soros, Peter Thiel, and Goldman Sachs, or that he owes $1 billion in loans, The Wall Street Journal reported on Tuesday. The top White House adviser and son-in-law of Trump failed...
