Leading the way, says Rickards, will be the International Monetary Fund. "The task of re-liquefying the world will fall to the IMF because the IMF will have the only clean balance sheet left among official institutions. The IMF will rise to the occasion with a towering issuance of SDRs, and this monetary operation will effectively end the dollar's role as the leading reserve currency."


A 42-page IMF paper published in January 2011 with the innocuous-sounding title "Enhancing International Monetary Stability -- A Role for the SDR?" -- lays out what Rickards describes. "A multiyear, multistep plan to position the SDR as the leading global reserve asset. The study recommends increasing the SDR supply to make them liquid and more attractive to potential private-sector market participants such as Goldman Sachs and Citigroup... The IMF study recommends that the SDR bond market replicate the infrastructure of the U.S. Treasury market, with hedging, financing, settlement and clearance mechanisms substantially similar to those used to support trading in Treasury securities today."


The genius of the scheme is that the SDRs would create inflation... but ordinary people wouldn't know SDRs were causing it. "Any inflation caused by massive SDR issuance would not be immediately apparent to citizens. The inflation would show up eventually in dollars, yen and euros at the gas pump or the grocery, but national central banks could deny responsibility with ease and point a finger at the IMF."

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