This could be much more significant for gold than many people think.
While the SDR is valued according to a basket of currencies, its backing (in the absence of the taxing rights which government hold) is 103.4m oz of gold.
At present, that gold is recorded on the IMF's balance sheet at the equivalent of $US9.3bn. However, its true market value at a gold price of $US950/oz is closer to $US98bn.
In order for an SDR to work, the IMF has to have sufficient reserves and promising from participating governments, in order to function properly and to issue new SDR's.
This would probably require a "float" of 5 to 10 times the $98bn market value of the IMF's gold reserves, or $500bn to $1trn.
Now, there would be two ways this could be achieved - either the countries concerned could put in a lot more gold...or they could engineer a rise in the price of gold by 5 times. How much gold was in COMEX warehouses, again? a few millions ounces? Hmmmm....
The next thing I will look for is a call for the IMF to revalue its gold holdings on balance sheet up to true market value.
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