Starving Steve

Originally Posted by Starving Steve

If I have a fiat $100-bill from America, and I have a fiat $100-bill from Canada, and similarly a 100 pound note from the UK, and maybe a 100 peso note from Mexico, a 100 Yuan note from China, and more of the same fiat 100's from other countries in the world, do you mean to tell me that the sum of all the fiat currencies is something better than the fiat parts?

Let me try this SDR logic with U.S. fiat: Do you mean to tell me that 1 x $100-bill in U.S. fiat money is worth more than 100 x $1 fiat bills? So if I call my $100 bill an SDR, that SDR is worth more than 100 x $1 bills?

And if an SDR is something "special", what can I do with it? Can I draw on gold reserves at $35 per ounce? Can I draw oil reserves at 35-cents per gallon?

Suppose the 100 Yuan note is popular to-day but $100 U.S. notes are not popular. Then, if I bundle the world currencies together and include the U.S. and the Chinese, then my bundle is an SDR. But why would that SDR be better than the components of the bundle, some popular to-day and some not so popular?

And for this insanity, this make-believe valuable currency or valuable "special drawing-right", what do we get for the SDR?

And when we get no more for the SDR than for the sum of the fiat that makes-up the SDR, the entire scheme deflates away to a waste of everyone's time and confidence. And that begs the question: What genius thought-up SDRs backed by fiat money?

The insane argument for an SDR was the supposed need for liquidity, especially in the turd-world. But wouldn't the best way to have liquidity be to run the world's printing-presses faster? Or if the turd-world needs pesos or their other fiat garbage, wouldn't turning their printing-presses onto "high" work just as well as introducing new crisp SDRs in addition to their new crisp pesos?

Who was the genius at the Federal Reserve Bank or the World Bank who thought-up SDRs backed by fiat money? Was it Arthur Burns, the genius who helped finance the Vietnam War with paper money and to drive inflation to 20% per year? Or was it Alan Greenspan, the genius who would speak three pages of Greenspanese to explain why 100 fiat parts ( from all over the world ) would be less valuable than 1 SDR backed with nothing and supposedly ( in one's imagination ) good everywhere in the world?

The more one reviews the history of central banking, the more one is amazed.....