Will the AIIB Use SDR as the Currency of Settlement

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By JC Collins

It is interesting that the countries which have joined the Asian Infrastructure Investment Bank (AIIB) are now the same countries which are supporting the inclusion of the Chinese currency in the basket composition of the Special Drawing Right of the IMF.

The currency of settlement which will be used by the AIIB has been widely speculated over the last few weeks and months. There has been talk of an AIIB currency basket, and the discussion around using the USD as the currency of settlement.

A unique AIIB specific currency basket is likely a non-starter as the time and negotiations required to construct and implement such a regional currency basket will not align with the operational timeframes of the AIIB itself.

War & Petroleum Reserves

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In the interest of analytical balance, we would do well to consider the possibility of war strategies when it comes to the global stockpiling of petroleum reserves.  In the years leading up to the German invasion of Poland, the world witnessed dramatic decreases in the price of oil as well as massive increases in petroleum inventories, especially as the Texas fields began to produce.