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IMF plans $100B injection of SDRs into world economies

IMF plans $100bn injection into economy to fund energy efficiency
The International Monetary Fund (IMF) has issued a radical proposal to pump $100bn (£62.5bn) of its international currency into the world economy in order to fund an overhaul of how the economy generates growth.
By Edmund Conway
and Jeremy Warner
Published: 9:01PM GMT 30 Jan 2010

Dominique Strauss-Kahn said that the fund planned to issue the Special Drawing Rights (SDR) in order to boost low carbon growth, helping fund an overhaul of energy efficiency around the developed and developing world. The proposal will prompt further suspicion that the Fund is quietly attempting to institute the SDR – a special reserve currency, which can be exchanged for national currencies – as a possible replacement for the dollar as a global reserve currency.

Mr Strauss-Kahn said "huge investment" was needed to make energy production around the world low carbon.

"Finding the finance for this transformation is possibly going to be quite problematic," he said. "If the finance cannot be raised through traditional means, then you need out-of-the- box thinking. We are planning to issue a report in a couple of weeks – one suggestion is it might be done through SDR issuance."

The IMF head added that he was concerned at the prospect of a further relapse into recession if national economies cut back their deficits too quickly, saying: "If you exit too early and there is a double dip, the problem is that there will be nothing left to throw at the problem."

The comments came after he and other leading world policymakers, including the Chancellor Alistair Darling and European Central Bank president Jean-Claude Trichet, met bank chiefs to attempt to reach an agreement on future restrictions on bonuses and regulation. Insiders said that although the high-level meeting failed to reach solid agreement, the bankers had opened the door to potential restraints on pay and, more substantively, a new "insurance levy" on bank's balance sheets.

The IMF promised to produce detailed plans on how to impose the unprecedented levy to guard against future crises later this spring, meaning G20 countries could impose the new tax before the end of the year.

The new tax is likely to take the effect of a small annual charge on banks' balance sheets.

http://www.telegraph.co.uk/finance/globalbusiness/7112337/IM...



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Oh, I see. They are going to

Oh, I see. They are going to "save the day" with 100 billion units of some other fiat currency.

I don't really see the point.

Zimbabwe has plenty of fiat currency to go around. Last I heard, they have a whole bunch of 100 trillion dollar notes. They have enough money to save us all.

So, we're all good. Thanks anyway.

...

SteveMT's picture

Fiat currencies vs. fiat SDRs...What is the difference?

"Parts is parts."
Fiat is fiat.

To convert SDRs into any of the fiat currencies fulfills a fundamental law of mathematics.

0 = 0

Overhaul This

There's the corporate state media's new favorite word again, "overhaul." Bah.

SteveMT's picture

Dave: You hit the nail on the head

"We trained hard, but it seemed that every time we were beginning to form up into teams we would be reorganized. Presumably the plans for our employment were being changed. I was to learn later in life that, perhaps because we are so good at organizing, we tend as a nation to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralization."

Charlton Ogburn (1911–1998)

Who Dat?

Just who the hell are these "overhaulers" anyway? Who voted for them? Who contracted with them to represent anyone's interests? Who died and made them God?

"Mr Strauss-Kahn said 'huge investment' was needed to make energy production around the world low carbon."

Excuse me, but who are you, now? And where do you get your idea that carbon, which is only, like, the basic element of life on this planet, needs to be "low" and that global robbery is necessary to achieve this delusional end?

Enough of you people, Mr. Strauss-Kahn, whoever you are. We will manage our own affairs and you can go back to playing with your ant farm or torturing guppies or whatever it is you probably did as a youthful wanna-be totalitarian.

I return again, as I often do, to the words of the great Frederic Bastiat:

"And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works."