From USD to SDR to Bancor
By JC Collins
A little known fact of the Bretton Woods Agreement at the end of World War 2 was that many of the participating countries wanted to use an actual global currency called the bancor as the international reserve unit of account. Representatives within the United States called for an end to the Bank for International Settlements and a rise of the USD as the global reserve currency.
The true details of those meeting will never be known. Though some educated guess work can determine what direction the conversations went. The end result was the ascent of the dollar as reserve currency, and the BIS, who likely controlled just as much gold as the United States during 1944, became even more powerful in the years and decades after the war.
Today the BIS has a central bank in every country on Earth, and representatives from China, Russia, America, and all other economic and military powers on its board of governors.
Every country is implementing a multilateral framework which is meant to consolidate macroprudential policies and legislation in the coming years. Both the United States and China have expressed the intent to use something other than domestic (national) currencies in global trade.
The systemic imbalances which are inherent when domestic currencies are used in such a manner will only continue and deepen whether it’s the USD or Chinese renminbi. The existing framework is shifting and morphing from week to week and year to year as the emerging architecture takes shape and forges the monetary partnerships of tomorrow.
The Special Drawing Right of the International Monetary Fund will play an important role in the transition from dollar to real global currency. The SDR will be implemented as a form of supra-sovereign (non-domestic) liquidity which can be used by BIS endowed central banks and other international institutions, such as the IMF, BRICS Development Bank, and Asian Infrastructure Investment Bank.
The World Bank and Asian Development Bank will also utilize this supra-sovereign form of liquidity.
Domestic currencies will still be in use initially and the early stages of SDR implementation will set the path forward for the global currency itself.
Let’s consider the road map of the euro currency. It took decades for the euro framework to be implemented and the currency itself existed as a basket before the real currency was implemented in January of 2002.
The ECU, or European Currency Unit, served the same purpose as the SDR will serve for the global currency. The SDR basket, of which the Chinese RMB will soon be added, will act as the same sort of transition tool as the ECU was for the actual euro currency.
No one country or region will go it alone in the years to come. All things will be consolidated under the multilateral mandates of the Bank for International Settlements. The negotiating and geopolitical positioning which is taking place in the world is strategic gamesmanship as the macroeconomic and geopolitical power between the United States and China, and on a smaller scale with Russia and Europe, unfolds but continues to push the world into the architecture of the multilateral monetary system and the SDR, step by step.
The SDR in future years will transition into the global currency, which was named in 1944 as the bancor. The rise of the bancor should take place somewhere around 2023 to 2028. The scale and macroprudential legislation which has to be implemented in each country around the world will take years yet.
The process itself can only be recognized by the overall trend and movement towards the supra-sovereign mandates which are slowly becoming entrenched and governed by domestic governments and international institutions.
The explanations and thesis which I present here on POM does not support this transition. Nor does it condemn it. The information and fact based analysis presented is loaded with so much information that no one post or series of posts can capture the totality of the transition.
I have repeatedly attempted to counter and prove alternative conclusions wrong for the simple fact that they are wrong. The evidence and supporting documentation for this transition is extremely detailed and challenging to read and comprehend. It is written in a form of international banker “legalize” which can leave many readers with a headache and knowing nothing more than when they started reading.
Even though the actual real world events are unfolding as I’ve been predicting over the last 18 months, there are many who still hold onto the alternative belief that China and the BRICS countries are going to overthrow the western bankers.
Don’t they realize that there are no western bankers? There are only international bankers.
The timing of specific events and slight details may be off from here to there, but the transition continues unabated as the masses are conditioned through mainstream media to ignore the reality, or manipulated by alternative media to accept fragmented conclusions, which also create ignorance about the reality and totality of the transition.
The bancor will come to be in our near future. It will be sold under the banner of multilateral agreements and the end of unilateral geopolitical manipulation. The diametric being engineered between the United States and Russia, China, and the Middle East, are only small micro scripts in the larger macro Cultural and Socioeconomic Interception (CSI) which is positioning countries and regions of Earth for full integration in the multilateral framework.
It is important for China to have the RMB added to the SDR for the next 5 years because it will help stabilize world liquidity and facilitate the sovereign debt restructuring which will be required to pull the world from the brink of debt catastrophe.
When the composition of the SDR is next considered in 2020, after this go around, many other countries will have positioned themselves to have their domestic currencies added to the basket. Russia, India, and many more, will require to have their currencies added to the SDR so that a full representation of the economic and geopolitical powers on Earth are accounted for when the SDR transforms into the bancor.
Just like the ECU became the euro. – JC