The ‘good’ news this holiday season comes from the IMF, as the Fund decided yesterday to include the yuan in the basket of currencies which underpins its Special Drawing Rights (SDR). From October 2016, China’s currency will determine by a weight of 10.92 percent (together with the pound, dollar, euro, and yen) the value of this special IMF international reserve asset.
[Editor’s note: Yesterday the International Monetary Fund designated the Chinese yuan as one of the global currencies used to calculate the value of Special Drawing Rights. This event may portend a significant reordering of the world’s monetary system, and serve as a recognition that the US dollar’s ongoing status as the world’s reserve currency is not guaranteed.
In this transcript, taken from September’s Mises Weekends interview, Jim Rickards explores our current global currency wars, the rise of other global currencies, and the end games being explored by central banks today:
As we move along in the centennial of the World War I, we come to some strange centennials. The year 1915 brought poison gas, the great shell crises which actually shifted the crisis mode of the war up to Higgsian levels, and the spectacular failure of the Entente powers at Gallipoli. In thinking of the 1915, so much of the war fed directly into the collectivist war-and-welfare state of modern times, it is hard to single out the most significant “crisis.” But I have a nomination for the weirdest.
Even though it isn’t a member of the European Union, Norway is a part of the Schengen Area in Europe which is the “borderless” zone of Europe where, until recently, people and goods could pass from country to country without border checks.
Most experts are of the view that the massive monetary pumping by the US central bank during the 2008 financial crisis saved the US and the world from another Great Depression. On this the Federal Reserve Chairman at the time Ben Bernanke is considered the man that saved the world. Bernanke in turn attributes his actions to the writings of Professor Milton Friedman who blamed the Federal Reserve for causing the Great Depression of 1930s by allowing the money supply to plunge by over 30 percent.
Defenders of the Fed have long been at a loss to explain how anyone could ever oppose the Fed and its “stimulus” programs. After all, in their minds it is unassailable gospel that the Fed makes everybody better off when it creates new money, forces down interest rates, or buys up government debt. Only Neanderthals oppose such things.
Don’t Like the Fed? You Must Hate the Poor
As Joseph Salerno has observed, the elimination of physical cash makes it easier for the state to keep track of private persons, and it assists central banks in efforts to punish saving and expand the money supply by implementing negative interest rate schemes.
The Economist reports that economist and Nobel Laureate Douglass North has died:
