Pegged exchange rate

[dontlop]

So what the usa did was loan themselves the currency to be used domestically thru legal tender laws so they had a means to lay the foundation for infrastructure and to win the civil war

The money was to be accepted for debts in the USA

People went to work and got paid in the greenbacks and the greenbacks by law had to be accepted as payment for their debts

Now the govt had the means to pay teachers lawyers congressmen farmers construction workers Ect

Once our infrastructure was in place we grew on the world stage with international trade

But as we can see money now days is just a means of audit or accountability to keep track of who is working off their debts and how debts are paid

[dontlop]

and [it] shall also be lawful money and legal tender in payment of all debts, public and private, within the United States.

[dontlop]

For any questions on acceptance of imf article VIII

This link explains everything

It's a PDF and can't be copied and pasted

Very pertinent information

http://www.imf.org/external/np/pp/eng/2006/052606.pdf

The legal framework begins on page three although the introduction starting on page 2 is also informative , no buttons to push , but informative

If you read the short first paragraph of the introduction on page two you will know why imf article 8 is important

Paragraph 3 of the introduction tells us that 165 out of 181 countrys have accepted article 8 and the rest are in article 14 , that's where iraq is article 14

[dontlop]

1. The Fund’s legal framework provides the basis to actively promote the liberalization of member countries’ current accounts. The Articles of Agreement set out legal obligations which effectively promote the free convertibility of members’ currencies for payments and transfers for current international transactions.

3. Overall, the goals set out in the 1992 report have been met, and substantial progress in this area has been made. 165 out of 184 members have now notified the Fund that they have accepted Article VIII obligations and no longer avail themselves of the transitional provisions of Article XIV; 95 of such acceptances were notified between 1992 and 2005. Notification of the acceptance of Article VIII obligations, often a byproduct of underlying economic changes, reflects a Fund member’s efforts to liberalize its legal framework and administrative practices in the area of foreign exchange regulation. Most countries that have notified acceptance of Article VIII obligations have also significantly simplified their exchange control regimes. Some countries have liberalized controls on capital movements partly in view of their positive experience with removing restrictions on current international payments and transfers

9. Article VIII, Section 3 prohibits members, subject to certain exceptions, from engaging in MCPs or discriminatory currency arrangements. In this regard, the Fund has determined that “official action should not cause exchange rate spreads and cross rate quotations to differ unreasonably from those that arise from the normal commercial costs and risks of exchange transactions.”6 An MCP will, in particular, arise from action by a member that, of itself, gives rise to a spread of more than 2 percent between buying and selling rates for spot exchange transactions on its territory

14. Under the Fund’s Articles, a member may formally notify the Fund of its acceptance of Article VIII obligations. Such formal notification has certain legal consequences. A member is subject to the obligations of Article VIII, Sections 2, 3, and 4 as soon as it becomes a member of the Fund; no formal acceptance of these obligations is necessary. The only legal consequence of a member’s notification of the acceptance of Article VIII obligations is that the member can no longer rely on Article XIV, Section 2 to maintain or adapt the exchange measures it had in place on its date of membership. Once it notifies the Fund of its acceptance of the Article VIII obligations, it loses the right to rely on Article XIV, Section 2 forever

. Implications for Countries Maintaining Exchange Measures

34. According to a survey of desk economists, preventing capital flight, maintaining adequate levels of reserves, and fiscal stability were the main reasons for countries to maintain exchange restrictions and MCPs.25 Some of the results of the survey are summarized below:

• Some members impose restrictions to prevent a loss of international reserves through capital flight, but the effectiveness of these measures has been moderate. Currently, 14 countries (out of the 26 for which responses were received) maintain restrictions with the objective of maintaining adequate levels of reserves. Of these,

11 have pegged exchange rate regimes, which require significant international reserves to be credible. Among the countries struggling with declining foreign reserves, the restrictions were effective in the cases where they were used as an instrument to secure funds for foreign debt repayment. The restrictions appear to be mostly ineffective in the presence of strong pressure on foreign reserves and, generally, in crisis situations.

• Some countries use exchange measures as fiscal policy instruments, including for revenue enforcement and income redistribution. Commonly used restrictions are tax certification requirements—permitting the transfer of nonresident income only after payment of all outstanding tax obligations—and multiple exchange rates resulting in MCPs. The latter results in some sectors being indirectly taxed, while others are subsidized. For example, if the military or state-owned enterprises have privileged access to foreign exchange and the private sector is only allowed to purchase foreign exchange at the free market rate, private sector importers could lose competitiveness vis-à-vis enterprises owned by the state.

• Some authorities fear that the removal of such exchange measures could potentially exacerbate their fiscal imbalances. Cross-country experience shows that such fears are unwarranted since the elimination of any implicit subsidies could bring down the government’s (quasi-)fiscal costs.

• Albeit imprecise, an estimate of the economic significance of the existing exchange measures has emerged from the survey. Desk economists typically quantify the economic significance of these measures with the share of affected foreign exchange transactions. Based on this type of assessment, twelve desk economists consider that the exchange measures of their assigned countries have a negligible or small economic effect and the impact of their removal should be manageable. Six desk economists consider that the measures are significant as they affect a substantial share of foreign exchange transactions.

LEGAL ASPECTS OF THE IMF/WTO RELATIONSHIP: THE FUND’S ARTICLES OF AGREEMENT AND THE WTO AGREEMENTS

http://www.imf.org/external/np/leg/sem/2002/cdmfl/eng/siegel.pdf

[dontlop]

Under Article VIII, section 3 of the Fund’s Articles, a multiple currency practice arises if, as a result of governmental action, the market rate for spot exchange transactions deviates by more than 2 percent from any other market rate for other spot exchange transactions prevailing in the country.117 For example, a regulation that segments the market by allocating spot exchange transactions for some current international transactions to one exchange market (e.g., the banks) and others to another exchange market (e.g., licensed money changers) would constitute government action for this purpose. As an economic matter, a resulting differential in exchange rates for different current international transactions bestows a subsidy or penalty on certain transactions or actors. This provision applies to both outflows (such as payments for imports or transfers of dividends) and inflows (such as receipt of export proceeds or a surrender requirement), since section 3 is not limited to the “making” of payments and transfers (as is section 2(

[Texstorm]

Do you ever sleep dontlop or is your mind in perpetual motion. I don't know how you do it but you remind me of that character in Startrek.....Data. Anyways we all appreciate what you do but sometimes it's more data than my brain wants to comprehend at 4am or 6pm. All we really want is an RV ! Thanks again DL.

[dontlop]

Get ready they are teaching people stuff at the cbi

So get in line early camp out

Um gonna be ready

[wbuse984]

Nice post Dontlop...thanks for the hard work...good read...check list:  sleeping bag, mr. buddy heater, booze...oh, Dinar clutched tightly in hand...conceal carry...lol..again, thanks... :bump: :bump: