The New SDR Bond – Boom or Bust?
Larry White, LoneStarWhiteHouse, recently released his latest comments regarding the new SDR bond. Mr. White communicates regularly with some of the true insiders that posses the deepest knowledge of what is going on within the IMF and other components of the global banking cabal. The new SDR was suppose to be issued in front of the G20 meeting scheduled for September 4, however, it doesn’t appear the first issuance of bonds are going to meet this objective – it could happen, but unlikely at this late date.
As more information hits the wire regarding the SDR bond there is more speculation about it’s role, the yield and the size of the first issuance. According to CNBC this is the latest view:
* World Bank set to issue $700 mln in IMF SDR bonds in China
* Traders unexcited by prospect of coupon rate below 1 pct
* Major state banks seen ensuring auction is successful
* Issue will be first SDR bond created since 1981
This new challenge to the dollar has the potential to permanently change the landscape of the bond market. The banks within China will be adding these bonds to their balance sheets and we may see a couple of larger banks outside of China support this first issuance. I would find it surprising if the banks within the SCO, EEU and BRICS nations did not support this new bond issuance. This is to say nothing of the nations along the One Belt, One Road project. When you have a pool of influence that reaches as many nations as China is working with, it becomes easy to see how a $700 million bond issuance will catch a bid and could potentially be bid higher than original issuance offering.
As Dr. Coates describes it in Larry White’s latest article:
“I fully agree that short of a real crisis, developing and expanding the role and use of the SDR will be a gradual step by step process. The development of private SDRs, for example, requires no decisions by the IMF at all if the existing currency basket is used. This was the topic of my “Asian Infrastructure Investment Bank and the SDR” article.” —- Warren Coats
The fact this bond can be freely issued, through China, in my opinion, is the single most significant aspect of this new bond. China’s foreign reserves total approximately $3.2 Trillion What to do, with a portion, of all that capital they have amassed over the past several years?
|3200000.00||3205162.00||3993212.72||2262.00||1980 – 2016||USD Million||Monthly||
Current Prices, NSA
In China, Foreign Exchange Reserves are the foreign assets held or controlled by the country central bank. The reserves are made of gold or a specific currency. They can also be special drawing rights and marketable securities denominated in foreign currencies like treasury bills, government bonds, corporate bonds and equities and foreign currency loans. This page provides – China Foreign Exchange Reserves – actual values, historical data, forecast, chart, statistics, economic calendar and news. China Foreign Exchange Reserves – actual data, historical chart and calendar of releases – was last updated on August of 2016.
– interest rate of only 1% and banks that fool with this may lose money on it – not exactly a motivator for banks to get involved [but we don’t know the rate China will set or that will result from the markets biding]-WC