What are SDRs?
SDRs vs. Gold and Silver
SDRs or Special Drawing Rights were created in 1969 by the International Monetary Fund (IMF).
SDRs were intended to provide central bank liquidity for expanding trade that could not be met by dollars or gold.
SDRs are reserve assets based on the value of a basket of four currencies: the U.S. Dollar, the Japanese Yen, the British Pound and the Euro.
The Dollar and Euro each represent about 40% of the value of an SDR, the Pound and Yen about 10% each*.
SDRs are not backed by the four currencies, but are valued in relation to them.
SDRs are allocated to IMF member countries in proportion to their size of the global economy and are held as reserve assets.
Only the IMF can issue SDRs
There are about $300 billion SDRs allocated to IMF members.
SDRs cannot be used to buy goods and services, but can be exchanged among central banks.
There are no SDR notes or coins.
Bonds may be denominated in SDR’s – but payable in a sovereign currency like Chinese Remnimbi
UPDATE: December 3, 2015- SDRs by the numbers after the Yuan joins the currency basket
Update: SDRs by the Numbers
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What Role Will SDRs Play in the Global Economy?
There has been speculation that SDRs may play a larger role in a coming global financial system reset. Indeed the IMF has stated that SDRs were created in 1969 because “the international supply of two key reserve assets—gold and the U.S. dollar—proved inadequate for supporting the expansion of world trade and financial development that was taking place.”
Gold was fixed at $35 an ounce and then current gold production was not providing enough gold in nominal terms to provide sufficient liquidity.
Given the size of the Chinese economy and their increasing gold reserves, the Chinese Renminbi or Yuan is conspicuously absent from the SDR basket of currencies but is expected to be included in the future.
Update: October 26, 2015 Yuan inclusion in SDR seems likely
Update: August 12, 2016 World Bank Approved as the First SDR Bond Issuer in China
How do Gold and Silver Match Up Against the SDR?
You can compare pricing and shipping charges on American Gold Eagles coins of all sizes at these web sites:
You can compare pricing and shipping charges on American Gold Eagles coins of all sizes at these web sites:
Golden Eagle Coins
SD Bullion
Money Metals Exchange
Here are some charts showing the relative performance of Gold and Silver against SDRs:
Gold vs. SDRs
Gold vs SDRS 2015 -2016
Gold vs. SDRs – 1999-2015
SDRs, like the fiat currencies they represent, have become significantly devalued.
Compare American Silver Eagles for sale at:
de
Golden Eagle Coins
SD Bullion
Money Metals Exchange
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Gold vs. SDRs – 1999-2015
The SDR has stabilized against gold recently.
Silver vs. SDRs
Silver vs. SDRs – 1999-2015
Silver has appreciated significantly against SDRs since 1999.
Silver vs. SDRs – 2013-2015
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