I have just read an article about how the financial elite are planning to solve the global debt problem by stealing our wealth through inflation. It was written by Jim Rickards and published by Strategic Intelligence.
Normally I take these newsletter articles of gloom and Armageddon with a bucket of salt, but this one seems a little different and talks about SDRs. What on earth are SDRs? Well apparently it is the world money that is issued by the International Monetary Fund (IMF). This world money is called the Special Drawing Right, or SDR.
The Bank of England can print Pounds, the Federal Reserve can print Dollars, the European Central Bank can print Euros, and the IMF can print SDRs. It is that simple. It is all Quantative Easing (Q.E.), except that it is not. The main difference is that we keep our own currencies in our own national and individual bank accounts. Not so with SDRs, they are for countries only and can be swapped for any other country`s currency using a secret trading facility inside the IMF in Washington. So there is the potential for printing huge inflation by swapping these SDRs. If and when the IMF floods the world with these SDRs you will not have the opportunity to blame any national bank like the Bank of England or the Federal Reserve. We will only know it is happening when we see our savings being eroded by inflation.
The timing for all of this to kick-off appears to be the end of September 2016. Right now, the value of one SDR is determined by reference to the Dollar, Euro, Yen and Sterling under a mathematical formula. China is presently negotiating to have the Yuan included in this basket of currencies. Jim Rickards puts a lot of the present unrest in currencies and the uncertainty of interest rates increase timings down to the manoeuvring between America and China.
The most important thing for investors to understand is that China does not want to rock the boat; it wants to join the club. Specifically, this means the IMF`s special club for SDR members. The future world reserve currency is not going to be the dollar or the Yuan. It is going to be the SDR! What does this means for the value of gold? I cannot imagine that it is going to be used to support the SDR, so at that point its value becomes that which is demanded by the jewellery manufacturing industry, which is less than its value today.
I started this article by saying that I am confused and I am still confused. SDRs are however something that I intend to learn more about. If there is any truth in the direction that Jim Rickards reckons that the financial world is going, then I can see more and more reason to be active with my investments and the passive investor had better watch out!