IMF the De Facto Global Central Bank Printing Fiat Money

that's the SDR (Special Drawing Right).

THE IMF CATAPULTS FROM SHUNNED AGENCY TO GLOBAL CENTRAL BANK (Ellen Brown, 10/1/09 Web ot Debt)

“A year ago,” said law professor Ross Buckley on Australia’s ABC News last week, “nobody wanted to know the International Monetary Fund. Now it’s the organiser for the international stimulus package which has been sold as a stimulus package for poor countries.”

"The IMF may have catapulted to a more exalted status than that. According to Jim Rickards, director of market intelligence for scientific consulting firm Omnis, the unannounced purpose of last week’s G20 Summit in Pittsburgh was that “the IMF is being anointed as the global central bank.” In a CNBC interview on September 25, Rickards said, “They’ve issued debt for the first time in history. They’re issuing SDRs. The last SDRs came out around 1980 or ’81, $30 billion. Now they’re issuing $300 billion. When I say issuing, it’s printing money; there’s nothing behind these SDRs.”

IMF is doing WHAT? Issuing the SDRs backed by... nothing?

So I looked and found the following article from no other than IMF itself. And I learned that the SDRs are not only backed by nothing (it's nothing more than a "concept"), but IMF is giving them away for free.

IMF Injecting $283 Billion in SDRs into Global Economy, Boosting Reserves (Glenn Gottselig, 8/28/09 IMF Survey Online)

"With much of the world still mired in recession, the IMF took action to bolster its members’ reserves through an allocation of SDRs, or Special Drawing Rights.

"The allocation, equivalent to $250 billion, was made on August 28 and will be followed by an additional, albeit much smaller, allocation of $33 billion on September 9. With the two allocations totaling roughly $283 billion, the outstanding stock of SDRs would increase nearly ten-fold to total about $316 billion.

"There are no notes or coins denominated in SDRs, nonetheless the SDR does play a role as an interest-bearing international reserve asset. The allocation of SDRs by the IMF boosts member countries’ reserves because SDRs can be turned into usable currencies. Once the SDRs have been added to a member country’s official reserves, the country can voluntarily exchange its SDRs for hard currencies, such as the U.S. dollar, euro, yen, or pound sterling, through voluntary trading arrangements with other IMF member countries."

What is the SDR? IMF explains as follows:

"The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members."

In other words, it's a form of debt, which allows the holder to lay a claim on the "freely usable currencies of IMF members". Much like the U.S. Treasury debt, which is backed by nothing but the government's promise to give the holder a claim on the future money that the U.S. government will collect from hapless taxpayers. The value of the SDR is currently determined by a basket of four currencies, Euro, British Pound, Japanese Yen, and U.S. Dollar, and the SDR pays interest at 0.25%.

Now these $316 billion newly minted claims on four IMF member currencies have been already distributed throughout the world. It is another wealth transfer, as "$110 billion of the combined allocations will go to emerging market and developing countries, including over $20 billion to low-income countries." (IMF)

Out of nothing, the IMF member countries (just about every country in the world) have been given free claims to four leading currencies that are freely exchanged in the world market. (Here's the table that shows the SDR allocations.)

How could this not be highly inflationary?

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