It isn't perfectly stable but it isn't so dependant on any individual currency. Even if the USD halves in value then the total impact is less than 25% on the SDR. And presumably the other currencies would increase to offset much of the impact.
As currencies changed in value over time you would probably need to re-balance the percentages. I'm not sure how this would happen.
Do you think there are any benefits doing it against currencies rather than against a basket of resources?
Money serves two purpose: store of value, mechanism of exchange. If inflation kicks in, people with government backed currencies that are easing will be caught with their pants down.
I've been thinking about this on a small scale recently. Now there's no systematic reason you couldn't have your cash held by a bank in terms the GS commodities index (http://www2.goldmansachs.com/services/securities/products/sp...) and then convert it to local currencies at the last minute - either when you're paying your bill or getting money from an ATM. They could manage the risk of moving it into and out of currencies (so that they have liquidity to service people at ATMs) as part of their service.
I spent my first year in London operating like this against AUD - being paid into an Australian account and spending from it on Visa debit. (You're subject to foreign exchange risk, but actually that's just a perspective thing. You're subject to it when you've got pounds via opportunity cost, you just don't realise it.)
China is doing a crude version of this at the moment - converting USD into commodities countries at a rapid rate. But if they want to get a new currency, why not peg it against tangibles rather than building a new castle on already shaky foundations?
It's an interesting idea. Seems better than just gold. However I don't necessarily think it would be more stable. Changes in supply and demand of resources could have numerous unintended consequences.
I don't think you would gain any day to day stability from doing so. You would still have all the instability in the USD multiplied by the instability in your commodities index. The advantage would be a hedge vs. inflation but that's got limited value relative to stability when talking about small amounts of money.
1 SDR = 1.3 USD + 1 EURO + 80 YEN + 0.5 GPB + etc
It isn't perfectly stable but it isn't so dependant on any individual currency. Even if the USD halves in value then the total impact is less than 25% on the SDR. And presumably the other currencies would increase to offset much of the impact.
As currencies changed in value over time you would probably need to re-balance the percentages. I'm not sure how this would happen.
EDIT: This page actually has the current ratios http://www.imf.org/external/np/fin/data/rms_sdrv.aspx