The “Great Reset” Is Here

COVID and “World Money” Were you forwarded this email? [Sign-up to The Daily Reckoning here.]( [Unsubscribe]( [Daily Reckoning] The “Great Reset” Is Here - The G7 blesses the issuance of world money to address the pandemic… - SDRs are passed off as a solution to Triffin’s Dilemma… - Then Jim Rickards shows you how the weaponization of the dollar by the U.S. government is pushing the world away from the dollar… Recommended Link [TOMMORROW: A Whole NEW Way of Making Money]( [Read more here...]( We’ve reserved a spot for you in a Special Profit Briefing this coming [Wednesday, June 16th at 1:00 PM.]( It’s completely FREE — but you will have to confirm your invitation by clicking here. Once you confirm, you’ll get full details on this event. But here are a couple high spots: - Exposing a growing “sixth domain of war” that’s already causing $6.6 trillion to change hands every single day - Revealing a whole new way of making money that could allow you to skim HUGE potential profits off this massive daily flow of cash The best part: this new profit tactic has already shown the potential to find 160% returns every 45 days, on average… Again, it’s this coming [Wednesday, June 16th at 1:00 PM…]( But you must confirm your spot in this briefing — or you risk losing it. You can do that in seconds by clicking below. [Click Here To Confirm Your Spot]( Portsmouth, New Hampshire June 15, 2021 [Jim Rickards]Dear Reader, For years, currency analysts (myself included) have looked for signs of an international monetary “reset” that would diminish the dollar’s role as the leading reserve currency and replace it with a substitute, which would be agreed upon at some Bretton Woods-style monetary conference. Now, it looks like the move towards the long-expected Great Reset is accelerating. At the recent G7 summit in the UK, G7 leaders gave their blessings to a $100 billion allocation of IMF special drawing rights (SDRs) to help lower-income countries address the COVID-19 crisis. President Biden fully supports the idea. The White House issued the following statement: The United States and our G7 partners are actively considering a global effort to multiply the impact of the proposed Special Drawing Rights (SDR) allocation to the countries most in need… At potentially up to $100 billion in size, the proposed effort would further support health needs – including vaccinations… A separate press release from the same day continued the same sentiment, stating, “We strongly support the effort to recycle SDRs to further support health needs.” In another development, IMF Managing Director Kristalina Georgieva said last Wednesday that she expected the fund's governors to approve a $650 billion allocation of SDRs in mid-August. What exactly are SDRs? Basically, they’re world money. In 1969, the IMF created the SDR, possibly to serve as a source of liquidity and alternative to the dollar. In 1971, the dollar did devalue relative to gold and other major currencies. SDRs were issued by the IMF from 1970 to 1981. None were issued after 1981 until 2009 during the global financial crisis. The 2009 issuance was a case of the IMF “testing the plumbing” of the system to make sure it worked properly. Because zero SDRs were issued from 1981–2009, the IMF wanted to rehearse the governance, computational, and legal processes for issuing SDRs. The purpose was partly to alleviate liquidity concerns at the time, but it was also to make sure the system works in case a large, new issuance was needed on short notice. The 2009 experiment showed the system worked fine. Since 2009, the IMF has proceeded in slow steps to create a platform for massive new issuances of SDRs and establish a deep liquid pool of SDR-denominated assets. On January 7, 2011, the IMF issued a master plan for replacing the dollar with SDRs. This included creating an SDR bond market, SDR dealers, and ancillary facilities such as repos, derivatives, settlement and clearance channels, and the entire apparatus of a liquid bond market. A liquid bond market is critical. U.S. Treasury bonds are among the world’s most liquid securities, which makes the dollar a legitimate reserve currency. The IMF study recommended that the SDR bond market replicate the infrastructure of the U.S. Treasury market, with hedging, financing, settlement and clearance mechanisms substantially similar to those used to support trading in Treasury securities today. In August 2016, the World Bank announced that it would issue SDR-denominated bonds to private purchasers. Industrial and Commercial Bank of China (ICBC), the largest bank in China, will be the lead underwriter on the deal. In September 2016, the IMF included the Chinese yuan in the SDR basket, giving China a seat at the monetary table. So, the framework has been created to expand the SDR’s scope. The SDR can be issued in abundance to IMF members and used in the future for a select list of the most important transactions in the world, including balance-of-payments settlements, oil pricing, and the financial accounts of the world’s largest corporations, such as Exxon Mobil, Toyota, and Royal Dutch Shell. The basic idea behind the SDR is that the global monetary system centered around the dollar is inherently unstable and needs to be reformed. Part of the problem is due to a process called Triffin’s Dilemma, named after economist Robert Triffin. Triffin said that the issuer of a dominant reserve currency had to run trade deficits so that the rest of the world could have enough of the currency to buy goods from the issuer and expand world trade. But, if you run deficits long enough, you would eventually go broke. This was said about the dollar in the early 1960s. The SDR would solve Triffin’s Dilemma. I wrote about SDRs and the global elite plans for them in the second chapter of my 2016 book, The Road to Ruin. Over the next several years, we will see the issuance of SDRs to transnational organizations, such as the U.N. and World Bank, for spending on climate change infrastructure and other elite pet projects outside the supervision of any democratically elected bodies. I call this the New Blueprint for Worldwide Inflation. But Triffin’s Dilemma is not the only dynamic that’s pushing the world away from the dollar. Below, I show you why the weaponization of the dollar by the U.S. government is pushing the world to seek alternatives. Read on. Regards, Jim Rickards for The Daily Reckoning P.S. Although you’re not seeing it in the news (not yet, anyway) the U.S. government is already engaged in a [world wide type of “asymmetric” warfare.]( Our financial fate hangs in the outcome of this war. And there are moves you can make, right now, to control your future. I’m blowing the lid off this covert, yet rapidly escalating war that’s causing [$6.6 trillion to change hands — every single day.]( It’s offered little in the way of profit opportunities for everyday folks — until now. I’ve developed a strategy I call [C.O.B.R.A]( — a first-of-its-kind chance for retail investors to capture the upside of this massive $6.6 trillion bonanza. You can tap into this massive, daily flow of money for potentially [HUGE profits.]( I’m inviting you to attend an urgent, FREE Special Briefing scheduled for tomorrow, [Wednesday, June 16th, at 1:00pm ET.]( I’ll explain everything tomorrow. To attend this free event, simply [click here]( to confirm your reservation. But hurry, time’s getting short. Recommended Link [America’s FINAL Wealth Transfer]( [Read more here...]( Thanks to a recent drastic decision made behind closed doors in this building on March 23rd, 2020 at 8 A.M… …Millions of Americans will likely fall into poverty in the coming months… In what historians will call the end of America’s middle class. Find out the 5-steps to take immediately to protect & grow your wealth. [Click Here To Learn More]( The Daily Reckoning Presents: “As the U.S. wields the dollar weapon more frequently, the rest of the world works harder to shun the dollar completely”… ****************************** Dollar Dominance Is Under Converging Threats By Jim Rickards [Jim Rickards]That global push to move away from the dollar has been accelerated by Washington’s use of the dollar as a weapon of financial warfare, including applying sanctions. The U.S. uses the dollar strategically to reward friends and punish enemies. The use of the dollar as a weapon is not limited to trade wars and currency wars, although the dollar is used tactically in those disputes. The dollar is much more powerful than that. The dollar can be used for regime change by creating hyperinflation, bank runs and domestic dissent in countries targeted by the U.S. The U.S. can depose the governments of its adversaries, or at least blunt their policies, without firing a shot. But for every action, there is an equal and opposite reaction. As the U.S. wields the dollar weapon more frequently, the rest of the world works harder to shun the dollar completely. I’ve been warning for years about the efforts of nations like Russia and China to escape what they call “dollar hegemony” and create a new financial system that does not depend on the dollar and helps them get out from under dollar-based economic sanctions. These efforts are only increasing (this type of economic warfare actually creates massive opportunities for investors who know how to play it. In fact, tomorrow I’m revealing how you can personally grab your share of this $6.6 trillion market. [Go here now]( to sign up for FREE). Russia has sold off many of its dollar-denominated U.S. Treasury securities and one Russian sovereign wealth fund has reduced its dollar asset position to zero. Russia has also been amassing massive quantities of gold and has increased the gold portion of its official reserves to 20%. Russia has over 2,000 tonnes of gold, having more than tripled its gold reserves in the past 10 years. It has actually acquired enough gold to surpass China on the list of major holders of gold as official reserves. These moves have greatly insulated Russia from U.S. financial sanctions. Russia can settle its balance of payments obligations with gold shipments or gold sales and avoid U.S. asset freezes by not holding assets the U.S. can reach. And Russia is providing other nations a model to achieve a similar distance from U.S. efforts to use the dollar to enforce its foreign policy priorities. Certainly, any talk of a monetary reset must involve China. Despite its present weakness, China is still the second-largest economy in the world and the fastest-growing major emerging market. Like Russia, China has amassed gold and likely has far more gold than it officially lists. It has also been helping to suppress gold prices so that it can buy gold cheaply without driving up the price. Europe has also shown signs that it wants to escape dollar hegemony. For example, German Foreign Minister Heiko Maas has called for a new EU-based payments system independent of the U.S. and SWIFT (Society for Worldwide Interbank Financial Telecommunication) that would not involve dollar payments. SWIFT is the nerve center of the global financial network. All major banks transfer all major currencies using the SWIFT message system. Cutting a nation off from SWIFT is like taking away its oxygen. In the longer run, these are just more developments pushing the world at large away from dollars and toward alternatives of all kinds, including new payment systems and cryptocurrencies. The signs of a reset are everywhere, but at least for now, the dollar is still king of the hill. Recommended Link [Your Confirmation is Needed ASAP]( [Read more here...]( You are invited to attend an urgent, FREE Special Briefing scheduled for [Wednesday, June 16th, at 1:00pm ET]( [(details here).]( New York Times bestselling financial author Jim Rickards is blowing the lid off a covert, yet rapidly escalating war that’s already forcing $6.6 trillion to change hands — every single day... With upside for YOU to tap into this massive flow of money… For potentially HUGE profits. To attend this free event, simply click below to confirm your reservation. [Confirm My Spot]( The dollar represents about 60% of global reserve assets, 80% of global payments and almost 100% of global oil sales. With such a dominant position, the dollar will not be easy to replace. Still, the trends are not good for the dollar. The international reserve position may be 60%, but as recently as 2000, it was over 70%, and just a few years ago, it was still at 63%. That trend is not your friend. Another challenger to the dollar is the IMF’s special drawing rights or SDRs, as explained above. The SDR is a form of world money printed by the IMF. It was created in 1969 as the realization of an earlier idea for world money called the “bancor,” proposed by John Maynard Keynes at the Bretton Woods conference in 1944. The bancor was never adopted, but the SDR has been going strong for 50 years. The IMF could function more like a central bank by issuing SDRs more frequently and encouraging the use of “private SDRs” by banks and borrowers. It may take decades for the SDR to pose a serious challenge to the dollar. But that process could be rapidly accelerated in another financial crisis where the world could need liquidity and the central banks would be unable to provide it because they still have not normalized their balance sheets from the last crisis. In that case, the replacement of the dollar could happen almost overnight. Individuals will not be allowed to own SDRs, but you can still protect your wealth by buying gold. That’s what Russia and China have been doing. Both countries have more than tripled their gold reserves since 2009. But attacks on the dollar are not limited to gold or SDRs themselves. The most imminent threat to the dollar actually comes from a combination of gold and digital currency. The fact that Russia and China have been acquiring gold is old news. Still, there are practical problems with using gold as a form of currency, including storage and transportation costs. But Russia has been solving these transactional hurdles by combining its gold position with a distributed ledger, or blockchain technology. Russia and China could develop a new cryptocurrency that would be transferred on a proprietary encrypted ledger with message traffic moving through an internet-type system not connected to the existing internet. Other countries could be allowed into this new system with permission from Russia or China. The new cryptocurrency would be a so-called “stable coin,” where the value was fixed with reference either to a weight of gold or another standard unit such as the SDR. Goods and services would be priced in this new unit of account. Periodically, surpluses and deficits would be settled up in physical gold. Such net settlements would require far less gold than gross settlements (where every transaction had to be paid for in real-time). This type of system (also called a “permissioned blockchain”) is not pie-in-the-sky but is already under development and may be deployed fairly soon. But you can count on the U.S. government being the last to know. The development of a gold-backed digital currency will be just one more sign that dollar dominance in global finance may end sooner than most expect. And we may be getting dangerously close to that point right now. Regards, Jim Rickards for The Daily Reckoning P.S. Although you’re not seeing it in the news (not yet, anyway) the U.S. government is already engaged in a [world wide type of “asymmetric” warfare.]( Our financial fate hangs in the outcome of this war. And there are moves you can make, right now, to control your future. I’m blowing the lid off this covert, yet rapidly escalating war that’s causing [$6.6 trillion to change hands — every single day.]( It’s offered little in the way of profit opportunities for everyday folks — until now. I’ve developed a strategy I call [C.O.B.R.A]( — a first-of-its-kind chance for retail investors to capture the upside of this massive $6.6 trillion bonanza. You can tap into this massive, daily flow of money for potentially [HUGE profits.]( I’m inviting you to attend an urgent, FREE Special Briefing scheduled for tomorrow, [Wednesday, June 16th, at 1:00pm ET.]( I’ll explain everything tomorrow. To attend this free event, simply [click here]( to confirm your reservation. But hurry, time’s getting short. --------------------------------------------------------------- Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [James Rickards][James G. Rickards]( is the editor of Strategic Intelligence. He is an American lawyer, economist, and investment banker with 35 years of experience working in capital markets on Wall Street. He is the author of The New York Times bestsellers Currency Wars and The Death of Money. Add feedback@dailyreckoning.com to your address book: [Whitelist us]( Additional Articles & Commentary: [Daily Reckoning Website]( Join the conversation! Follow us on social media: [Facebook]( [LinkedIn]( [Twitter]( [RSS Feed]( [YouTube]( The Daily Reckoning is committed to protecting and respecting your privacy. 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