Chapter 66 V. Special Drawing Rights

In the repeated dollar crises, numismatists have always insisted that the shortage of gold caused the currency crisis. From the history of the gold standard, this is obviously the reverse of the cause. The shortage of gold is not the cause of the problem. The unrestrained dollar Excessive issuance is the root of the crisis.Like the long-term suppression of silver prices, one of the main purposes of long-term distortion of gold prices is to create a dilemma of insufficient gold production.When a crisis comes, it is strange how often people resort to deception rather than honesty about the nature of the problem.After the gold mutual fund fired all the bullets, the international bankers thought of the idea of ​​paper gold first proposed by Keynes in the 1940s, repackaged it, and finally proposed the great invention of special drawing rights.

As the famous French economist Jacques.Ruf pointed out: At the same time, numismatists invented a new contraption to cover up the fact that the US currency was bankrupt.Each country's central bank is assigned a special international reserve currency.But in order not to cause inflation, special drawing rights must be strictly limited.Thus, even with the support of SDRs, the United States still cannot repay a small part of its dollar debt. But Wall Street was another beaming face, hailing this as a feat in modern financial history: America has won for paper gold. Undersecretary of the Treasury PaulVolcker told the news media with a big smile on his face that we finally implemented it (the SDR program).The Wall Street Journal hailed this as a major victory for the American school of economics, as it was a direct blow to the old gold that must be the sole baton and economic panacea of ​​monetary value.

But, the WSJ forgot to say that even SDRs are defined by their gold content, so gold is still the baton of the currency, and SDRs cannot be devalued. For SDRs, Hope has an excellent description: Someday, it (SDR) will be recognized by historians and John.The South Sea Bubble caused by Law's Mississippi Conspiracy ranks among the great inventions of mankind.Defining it as equivalent to gold, but not convertible into gold, it is simply absurd to apply for a patent.Any banknote or unit of credit can only be considered equivalent to gold if it is convertible into gold without restriction at a fixed ratio.

The German economist Pallig also sharply criticized the concept of paper gold: This new SDR reserve currency can only stimulate more reckless financial expansion and inflation around the world.Adoption of the SDR is a victory for the inflationary elements.It removes the last stone in the way of a fully controlled world currency that will never be in short supply in the world. On March 18, 1969, the U.S. Congress abolished the mandatory requirement that the U.S. dollar issued by the Federal Reserve must have 25% gold backing. This act cut off the final legally enforceable relationship between gold and U.S. dollar issuance.

The world is not far from the final truth. Of course, the plans of international bankers did not come true every time. Keynes's idea of ​​using special drawing rights as the future world currency in the 1940s was indeed a bit too avant-garde.However, the optimism of international bankers was not entirely unreasonable. Just after World War II, the United Nations, the prototype of a world government, has been realized as scheduled, and the International Monetary Fund and the World Bank, a pair of world unified currency issuing institutions, are also in place at the same time. Now, if the SDR becomes the world currency as scheduled, the great cause will be accomplished.It's a pity that the plan can't keep up with the changes. The British Keynesian version of the beautiful blueprint for the future world is quite different from White's American version. Will be enthusiastic about Keynes' plan, and the two sides are a little alienated.In addition, it did not estimate the ferocious wave of national independence in the third world countries, the rise of Asia has shaken the basic balance of power in the world, and the special drawing right has never been repaired.