KiraSeer2016 wrote:
I thought SDR's were used mostly for settlement purposes. Make that "going to be used". But international economic and financial regulatory activity will have to wait until we have broken the back of the "big bad boys". The VELGDS.
You state China and Russia are a replacement for the Soviet Union---I'm sure you mean "the external threat" that can always unite a nation. What about Islam? How does Mattis and Tillerson feel about that bug-a-bear?
SDR's were put in place about 1970 so member Nations could use the UN facilities according to what % of SDR:s they held according to how much they had contributed to them, so in effect SDR 's became the nominal reserve currency especially when the Bretton Woods arrangements collapsed in 1972 and the Fixed exchange rate for major international currencies was adandoned and replaced with the floating module made stable by the US Petro Dollar.
The Petro Dollar was a deal with OPEC to only sell oil only in US currency and for OPEC to use their reserves to purchase US Treasuries (bonds with a 10 year maturity).
Due in part to fracking that system seems to be ending, also with China buying Treasures with their Balance of trade surplus the Petro Dollar is not that relevant now as it used to be.
Also the US is probably the chief component of price fixing the value of energy, and thus considered in conjunction with the political accociation with the value of energy the US being not in lock step one way up or down price wise, the US is able to push futures up or down depending on political concerns.
However the Trump team is appearing to be ignorant of this fact and consequently is missing out on great leverage, probably political economics is not their strong point.
So now that places on Nations a much greater need to hold their Strategically Reserved Currencies in something other than US Currency and Equity denominated in the same, because the US could smarten up and force greater need for US Reserve Currency to be accepted internationally by manipulating the price of energy.
That's mainly because the price of energy is the critical factor for political leverage, and also all Nations not on the American Continent realise the bipartisan US political regime is highly advantaged by offshore wars, particularly on Continents seperated by the Atlantic Ocean.
So far China is the only Nation pushing for SDR's as the mainstay World Reserved Currency, but Europe is not far off that position, the US embassy shift to Jerusalem is a big test as to which way Europe will go.
The present US foreign policy is to create a "them and us" attitude in the Western Camp so US dependency is preserved, Russia and China being "them", closing the ranks could force India, Africa and Pakistan to decide only to embrace the US and spurn Chinas One Belt one Road.
I'm not sure about VELGDS. and will have to take it home and study up about it.
Yep, !! external threat needed for continuing a US Social Unity, the problem is that, there is only a Coarse Materialist Culture of consumer pride and hedonistic tendencies in the US, and always going through the roof, bedrooms are now saturated, except for mine of course.
Alas, . this is a real boom industry that can't be exported continually, Ovomit tried to hook gay marriage up to foreign aid.
Luckily it sort of tanked after that, Ovomit was a big turn off, hahahaha.
Both Mattis and Tillerson are backing away from the threat of Islam I think because they want a reliable partner to take on Iran and Hezbollah so the US can be the shirt holder and supplier of war materials, a good test now is with Turkey striking Afrin and Manbij how the Kurds will go depends on what both Mattis and Tillerson will decide about taking on Iran and Hezbollah, you probably can't engage one without the other, Turkey will probably team up with them if the Kurds collapse, or don't collapse, probably it's Turkey supplying Yemen and not Iran, it's a Sunny thing I think.
I hope I satisfied or could satisfied you communication to me, and promise to do my best.