What are SDRs?

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

SDRS vs gold july 1 2016

Gold vs. SDRs – 1999-2015

Gold vs. SDRs chart

SDRs, like the fiat currencies they represent, have become significantly devalued.

Compare American Silver Eagles for sale at:
Golden Eagle Coins
SD Bullion
Money Metals Exchange

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Gold vs. SDRs – 1999-2015

Gold vs SDR 2013-2015

The SDR has stabilized against gold recently.

Silver vs. SDRs

Silver vs. SDRs – 1999-2015

silver vs. sdrs chart 1999-2015

Silver has appreciated significantly against SDRs since 1999.

The Lowest Cost. Period.

Silver vs. SDRs – 2013-2015

Silver vs. SDRs chart since 2013

SDRs have risen against silver the past two years.

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*The IMF values the SDR every five years with the last valuation set in December 2010. The most recent allocation of the SDR was 41.9% U.S. Dollar, 37.4% Euro, 11.3% British Pound and 9.4% Japanese Yen. SDRs were created in 1969.

Charts by Nick Laird of Sharelynx.

Further Reading:

SDRs by the Numbers


Gold vs the Dow

Gold vs the Dollar

Homes Priced in Ounces of Gold

Silver vs. the Dow

Silver vs. the Dollar

Homes Prices in Ounces of Silver

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