U.S. Ambassador Recall, Prelude to IMF Announcement?
A report from CNNMoney.com states, “The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world’s reserve currency. The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system.”
There has been wide speculation in the blogosphere regarding the recent recall of all U.S. Ambassadors back to Washington, an unprecedented move that has never happened before. While the main stream media barely mentioned the event, rumors abound as to the ‘real’ reason for the summit.
The ‘official’ State Department explanation was to discuss a new program named ‘QDDR’, Quadrennial Diplomacy and Development Review, a program that “provides a blueprint for elevating American “civilian power” to better advance our national interests and to be a better partner to the U.S. military.”
The QDDR has apparently been in the making for awhile, and some suspect that the U.S. Ambassador recall used the QDDR as an excuse to meet for something entirely different, something that must be so gravely important, to have recalled every Ambassador back to Washington.
A new international reserve currency could certainly be ‘it’.
Other countries are forced to purchase certain goods through the U.S. dollar (particularly Oil), and are exposed to the volatility and weakness of the dollar as the U.S. obligations continue to compound and spiral out of control.
SDRs represent potential claims on the currencies of IMF members. Dominique Strauss-Kahn, managing director of the IMF said, “Over time, there may also be a role for the SDR to contribute to a more stable international monetary system“.
In addition to serving as a reserve currency, the IMF also proposed creating SDR-denominated bonds, which could reduce central banks’ dependence on U.S. Treasuries.
During June of 2010, a United Nations world economic survey report said “A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency”. (Reuters) Scrap dollar as sole reserve currency
It is not known if this IMF announcement is the ‘real’ underlying reason for the recent Ambassador recall, but it does seem plausible.
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