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China to purchase $50 Billion in IMF notes

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posted on Sep, 3 2009 @ 09:14 AM
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The IMF on Wednesday said China has signed an agreement to purchase approximately $50 billion in notes from the fund. The notes are denominated in Special Drawing Rights, a quasi-currency issued by the fund and promoted by China as a potential replacement for the dollar


China Purchase

Well news about the USD just became a little more interesting. I know that $50 Billion isn't really worth much in the grand scheme of things, but if more countries begin to follow suit and China begins to purchase more IMF notes, looks like the USD will lose even more holding.




posted on Sep, 3 2009 @ 09:17 AM
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The Beginning of the End...


Second Line...



posted on Sep, 3 2009 @ 09:47 AM
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It surely seems like the beginning of the end. If China decides to dump their USD holdings for the likes of Gold and IMF notes, the USD would tank substantially. My next bet would be that China purchases even more IMF notes, and Russia follows suit, this itself would be the back breaker of the USD. I think it begs the question, what else could go wrong for the USD and those who use it as their primary currency?



posted on Sep, 3 2009 @ 09:52 AM
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reply to post by IKnowNothing
 


NO, it will be Japan next! They hold more of our debt than anyone else, and they have a movement in right now to dump USD in favor of Japanese based currency! I am sure all the BRIC countries will follow the lead of China on the IMF currency, and if Japan throws its influence in, then the USD will be worth about the same as the Peso!!

Maybe it is a good time to start converting my money to Pesos while it is a good deal, then I can escape to Mexico when the time comes!!



posted on Sep, 3 2009 @ 09:53 AM
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The question is whether they sold $50 Billion of UST's to buy these SDRs. Though 50 Billion is a drop in the bucket compared to what they have, it's an important milestone. Particularly if going foward they don't buy UST's and instead buy SDRs.

Also of interest, and maybe related is this article from marketwatch.

Hong Kong recalls gold reserves, touts high-security vault In a challenge to London, Asian states invited to store bullion closer to home


Hong Kong is pulling all its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at the city's airport, in a move that won praise from local traders Thursday.


From Marketwatch

The SDR and gold story hitting the same day does not seem coincidental.



posted on Sep, 3 2009 @ 10:26 AM
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Originally posted by jefwane
The question is whether they sold $50 Billion of UST's to buy these SDRs. Though 50 Billion is a drop in the bucket compared to what they have, it's an important milestone. Particularly if going foward they don't buy UST's and instead buy SDRs.

Please read the agreement.
www.imf.org...

China is borrowing. SDRs are NOT bonds that a country can invest in.



posted on Sep, 3 2009 @ 10:30 AM
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The International Monetary Fund said it’s possible to take the “revolutionary” step of creating a new global reserve currency to replace the dollar over time... As much as 70 percent of the world’s currency reserves are held in dollars, according to the IMF...


IMF currency replacing Dollar is possible

I guess China is taking that "revolutionary" step. Also, I agree that if Japan were to take the next step towards the IMF notes, it would cause a domino effect around the global to dump the USD. If this were to happen, seems the Canadian Dollar would be the strongest currency in all of North America. Which of course it was before when Wall Street took a dive fall of last year.

[edit on 3-9-2009 by IKnowNothing]




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