Notable
Trade War with China, optics for resolving Triffin Paradox
The economic might of the USA has been used to prop up globalism. How can you sell a re-balancing without war? Stealing technology, Unfair Trade deals.
Trumps "America First"
Triffin Dilemma
The Triffin dilemma or Triffin paradox is the conflict of economic interests that arises between short-term domestic and long-term international objectives for countries whose currencies serve as global reserve currencies. This dilemma was identified in the 1960s by Belgian-American economist Robert Triffin,[1] who pointed out that the country whose currency, being the global reserve currency,
foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, thus leading to a trade deficit.
The use of a national currency, such as the U.S. dollar, as global reserve currency leads to tension between its national and global monetary
policy. This is reflected in fundamental imbalances in the balance of payments, specifically the current account, as some goals require an
outflow of dollars from the United States, while others require an overall inflow.
China's yuan officially joins the SDR
On Saturday, the Chinese currency was added to the IMF's special drawing rights (SDR) basket,
joining the US dollar, the euro, the yen, and the British pound.
https://blogs.imf.org/2017/06/02/the-sdr-giving-an-old-idea-new-life/#more-20055
The IMF's Special Drawing Right, or SDR, was created more than 50 years ago and used only by IMF member countries to supplement their official
reserves. The SDR’s value is based on a basket of five major currencies—the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound. In this podcast, Mohamed El-Erian, Chief Economic Advisor at the financial services
firm Allianz, and a former deputy director at the IMF, says an expanded use of the SDR in global markets could help to strengthen the world
economy.
“The renewed interest in the SDR is not by accident—it happened after the 2008 global financial crisis that almost tipped the world into a
multi-year depression.”
El-Erian names three functions of the SDR that markets could embrace: The traditional, or official role as a currency that helps transfers
between central banks; the market role, where the SDR becomes more prominent in the marketplace—thereby reducing diversification challenges;
and the SDR as a unit of account that would limit the volatility associated with being linked to a single currency.