‘I’m Sorry!’
Anyone looking for drama during the US session Wednesday had to settle for Janet Yellen screeching at a characteristically vexatious John Kennedy.
Yellen and Kennedy ended up in an absurd virtual shouting match over an IMF proposal to issue new special drawing rights aimed at bolstering poor countries. Kennedy seized the opportunity to reiterate familiar complaints while grandstanding loudly about "Russians" and China and what he characterized as a fleecing of the US taxpayer.
Anticipating the
Kennedy needs a lawn he can tell people to get off of.
Thanks, I needed that.
I’m sorry I looked for SDR stuff, but here it is:
The IMF normally pays remuneration in SDRs, which become
resources of the Exchange Stabilization Fund (ESF). In return, the ESF transfers an equivalent dollar
amount to the TGA. The transfer of dollars from the ESF to the TGA has no effect on Treasury’s cash
position. If the United States were to request payment in dollars, the payment would be in the form of a
decrease in the U.S. letter of credit and a counterpart increase in the U.S. reserve position, but no flow of
cash to the TGA.
That’s almost as fun as repo rates and eating cotton.
Thanks for the background.