...for now... but at what cost?
Chinese Economics Thread
- Thread starter Norfolk
- Start date
In4ser
Junior Member
That I do not know. Perhaps someone else does.
Special drawing rights are backed by currency held by its members. The IMF can't print SDRs by themselves, and would need to get everyone to agree to issue more SDRs.
Russia is now part of the internal circulation. So buying Russian resources for hoarding is the plan.
China is exchanging them for commodities. You can see China selling off treasuries literally right now.
Easy, just jack up the export prices and pass it on.
Hendrik_2000
Lieutenant General
Since the 16th century central banks (or whatever version of it existed) one countries foreign currency reserve was sacrosant and enjoyed sovereign immunity. In the last few years the US has done this with Iran, Venezuela and Afghanistan.
Russia feared their USD denominated reserves could be confiscated because the US had already done the "unthinkable", i.e., stole someone else's money which enjoyed sovereign immunity.
Russia did not count that the "collective west" would dare commit such sin. But.... but.... they did.
As such, NOBODY ELSE will trust their foreign exchange reserves will be safe.
People may not realize, but the whole international financial, trade systems have come down with that theft.
The evil genie has been released from the bottle.
I repeat, NO COUNTRY TRUSTS KEEPING THEIR SAVINGS in USD, Pounds, Swiss Francs, Yens anymore.
If I were to define the policies pertaining to the savings of any country I would transform all my savings in commodities (mostly metals and oil).
Anytime you needed some cash to cover any trade or current account deficits, I would just get some of those commodities and sell them in the market for pocket cash(country sized pocket cash).