Basically the IMF is going to do just what the Fed has been doing for the last hundred years,be the printing press of last resort.
The Fed is under enormous scrutiny at present and the pressure from its lenders Japan and China mean it must maintain the illusion of a strong dollar,whilst at the same time printing trillions of the things to pay off debt it cannot otherwise service.
Lo and behold,the IMF cavalry come riding over the hill to print new dollars,not the nasty worthless Fed dollars,these are real dollars,backed up by the IMF no less.Real money!!!Backed by nothing of course but bluff,hot air and nonsense,just like the local countrfeiter has been raided,trouble is the cops didn’t recover the plates and his mate down the road is now churning out dollars from his garage.
Anybody think the Chinese will fall for it?No - neither did I.
I don’t believe this to be the case. China, the US, Germany, Britain, Japan have all contributed to the expansion of SDRs. SDRs have been there since the IMF was founded. It is not, as far as I can see printing except in the sense that the treasuries that are being transferred to the IMF (I believe this is the payment method) are issued rather than being sold on the open market. It is printing in the same way that the NAMA bonds are printing - an IOU on future tax income. No?