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The Economy => Stimulus Plans & Bailouts => Topic started by: Brocke on May 19, 2011, 01:45:30 pm

Title: Was IMF Head Dominique Strauss Kahn arrested over SDR Bonds?
Post by: Brocke on May 19, 2011, 01:45:30 pm

Strauss-Kahn victim of 'dollar lobby'?

The International Monetary Fund chief has resigned while in custody in New York, over accusations of sexual assault that he strongly denies. Before Dominique Strauss-Kahn quit, crowds gathered in Washington to join the growing global calls for him to go. Let's look at what this all means for world banking with Adrian Salbuchi, who's an economics and geopolitics author in Buenos Aires.

Title: Re: Was IMF Head Dominique Strauss Kahn arrested over SDR Bonds?
Post by: Brocke on May 19, 2011, 01:47:33 pm

Was IMF Head Dominique Strauss Kahn arrested over SDR Bonds?

May 16, 2011

Clearly Dominique Strauss-Kahn is becoming a hot topic as it is shaping up to be the conspiracy theory of the century. Even now on Ebay you’ll find his name listed.

STRAUSSKAHN.NET, STRAUSSKAHN.ORG are all for sale as a package for 950 bucks (current bid, most likely it will go higher.. much higher due to the traffic they are currently getting.

Regardless it appears that people are profiting and it’s spurring a mini-industry on who can type faster. The supporters or detractors of his arrest.

This can honestly be the conspiracy theory of the century. The IMF under Dominique Strauss Kahn has been over the past 3 years been planning it’s own currency of reserve. Calling on a currency called an SDR (special drawing rights) in focus the point that could be the major issue is the SDR bond that allows the IMF to issue bonds that could (and most likely would) compete with US treasuries.

The moment the SDR BOND becomes popular is the exact moment the US dollar loses it’s currency reserve status.

But alas, the guy that was pushing this through finds himself behind bars on what some say are bogus charges.

You could imagine what is at stake. The US dollar itself.

If Dominique Strauss Kahn was able to pull this off and use the IMF to draw SDR Bonds you will see a dramatic drop in the value of the US debt. Countries and investors would be buying SDR bonds rather than US treasuries. It will effectively end the USA’s ability to print off the debt.

Instead however we find the leader of the IMF behind bars. Was he setup? Was this engineered to keep the US Dollar as the currency of reserve?

Title: Re: Was IMF Head Dominique Strauss Kahn arrested over SDR Bonds?
Post by: Brocke on May 19, 2011, 01:55:33 pm

IMF Managing Director Dominique Strauss-Kahn Calls for Strengthening the International Monetary System

Press Release No. 11/36
February 10, 2011

Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), warned today that lack of action to reform the international monetary system could sow the seeds of the next crisis, and he called for renewed international cooperation for a better and stronger global recovery.

“Global imbalances are back, and issues that worried us before the crisis—large and volatile capital flows, exchange rate pressures, rapidly growing excess reserves—are on the front burner once again,” Mr. Strauss-Kahn said during a panel discussion on the international monetary system held at the IMF in Washington, DC. He said that “reforms to the international monetary system could both bolster the recovery and strengthen the system’s ability to prevent future crises.”

Mr. Strauss-Kahn emphasized three areas of reform in particular:

• Strengthening policy cooperation. Just as cooperation helped pull the global economy out of the crisis, Mr. Strauss-Kahn said further cooperation can now lay the foundations for more stable global growth. He pointed to the G-20’s Mutual Assessment Process (MAP)—as as an important first step toward creating more permanent frameworks for global policy cooperation—and to the IMF’s Financial Sector Assessment Programs and new reports on the spillover effects of countries’ policies on one another, as measures in train to strengthen surveillance.

• Reducing capital flow and exchange rate volatility. Countries’ policy responses to inflows of capital have an impact on other countries, Mr. Strauss-Kahn noted. He said that the Fund is looking at these issues including whether there was a need for globally agreed “rules of the road” for managing capital flows.

• Enhancing liquidity provision in times of extreme volatility. The global financial safety net has been strengthened in the wake of the crisis. Mr. Strauss-Kahn noted, for example, the introduction of the Flexible Credit Line and Precautionary Credit Line by the IMF. Another avenue worth exploring, he said, is how to “strengthen partnerships with regional financing arrangements.

Potential Role of the SDR in strengthening the international monetary system. Over time, Mr. Strauss-Kahn said that there may be a greater role for the IMF’s international reserve asset, called the Special Drawing Right, or SDR, to contribute to a more stable monetary system. Although a number of obstacles remain in the way, increasing the global stock of SDRs could help alleviate global imbalances by reducing the need for an excessive buildup of reserves, he said. He added that issuing SDR-denominated bonds could create a potentially new class of reserve assets, and that use of the SDR to price global trade and denominate financial assets would provide a buffer from exchange rate volatility.

Mr. Strauss Kahn concluded that the reform of the international monetary system is not something academic or abstract—“It is linked to achieving the kind of well-balanced and sustainable recovery that the world needs and it is linked to preventing the next crisis.”

Title: Re: Was IMF Head Dominique Strauss Kahn arrested over SDR Bonds?
Post by: Brocke on May 19, 2011, 01:59:30 pm

FEBRUARY 19, 2011, 2:15 P.M. ET

UPDATE: IMF's Strauss-Kahn Wants The Yuan In SDR

  By Nicolas Winning and William Horobin
PARIS (Dow Jones)--The head of the International Monetary Fund, Dominique Strauss-Kahn, said Saturday he wants China's yuan to be included in the basket of currencies that make up the fund's alternative reserve currency--but it would have to be at least partly convertible first.

Finance officials from the Group of 20 industrialized and emerging countries agreed Saturday to look at whether the role of the Special Drawing Rights, or SDR, in the global monetary system should be expanded.

"I will be personally very in favor of having the renminbi in the SDR as soon as possible, but in one way or other it means that the renminbi has to be, if not totally freely convertible, at least partly convertible for the part which will be in the SDR," he told reporters after the G20 meeting.

The French--who hold the rotating presidency of the G20--have been using the inclusion of the yuan in the SDR as a way of approaching the thorny issue of China's currency.

U.S. and other developed markets want China to let the yuan--also known as the renminbi--appreciate faster because they feel its relative weakness crimps the export power of their economies. But China says too quick an appreciation of the yuan could damage the Chinese economy.

French Finance Minister Christine Lagarde said Monday the yuan would be included in that expansion as soon as China has fulfilled the required conditions on the convertibility of its currency

Strauss-Kahn said the yuan is clearly a big enough currency to satisfy the size criteria to be included in the SDR, which includes the dollar, the yen, the euro and the U.K. pound.

"The problem is there's another one [criteria], which is that it has to be a currency that is freely valued by the market and it's not," he said.

The IMF head said he has had many opportunities to talk with Chinese government and central bank officials and those discussions have been "very open."

"I think that would be good for China because it would lead to a more open economy and clearly that is what China aims to do," he said.

Strauss-Kahn said the SDR has a number of advantages, notably that it less volatile than other currencies. It can also be used to price commodities and issue bonds, he added.

Strauss-Kahn said it was also urgent for Europe to pursue further economic coordination. Some countries needed to carry out aggressive fiscal adjustment while others could pursue a more medium-term adjustment, he said without naming any specific countries.

"Europe can't function with deficits that bring debt to around 100% [of gross domestic product]. Simply, they will no longer be able to borrow as lenders won't lend anymore."

"European growth can strengthen quicker...if necessary economic policies are implemented," Strauss-Kahn said.