Wednesday, April 1, 2009
You've heard that the IMF is considering printing hundreds of billions of dollars worth of its own currency - called "Special Drawing Rights" or SDRs. Currently, the SDR is pegged to four currencies: the dollar, yen, euro and sterling.
You've heard that China's central bank proposed making SDRs the world's reserve currency.
You've likely heard that Tim Geithner has said that he supports the IMF's proposal to issue large amounts of SDRs (and that some people say that Geithner also supports making SDR the world's reserve currency).
You may even have heard that Russia also backs making the SDR the world's reserve currency, and that Russia wants the SDR to be pegged to a basket of yuans, rubles and gold.
But you probably have not heard that:
China's government has floated a variant of this idea, suggesting a currency based on 30 commodities along the lines of the "Bancor" proposed by John Maynard Keynes in 1944.