UN calls for new reserve currency
Oct 6 07:17 AM US/Eastern
The United Nations called on Tuesday for a new global reserve currency to end dollar supremacy which has allowed the United States the "privilege" of building a huge trade deficit.
"Important progress in managing imbalances can be made by reducing the reserve currency country?s 'privilege' to run external deficits in order to provide international liquidity," UN undersecretary-general for economic and social affairs, Sha Zukang, said.
Speaking at the annual meetings of the International Monetary Fund and World Bank in Istanbul, he said: "It is timely to emphasise that such a system also creates a more equitable method of sharing the seigniorage derived from providing global liquidity."
He said: "Greater use of a truly global reserve currency, such as the IMF?s special drawing rights (SDRs), enables the seigniorage gained to be deployed for development purposes," he said.
The SDRs are the asset used in IMF transactions and are based on a basket of four currencies -- the dollar, euro, yen and pound -- which is calculated daily.
China had called in March for a new dominant world reserve currency instead of the dollar, in a system within the framework of the Washington-based IMF.
Stupid. What's the point of making a "new" one the standard bearer? Woudl that have actually solved any problems related to the worldwide crisis?
And the bolded quote... what does that actually mean? Sounds like political gibberish.
The US is the standard bearer because we're a hyperpower. That won't change if they stop using the dollar as a de facto measurement.
they've grown tired of the US shananigans.
More like they want to have shananigans all their own.
the UN. I can't imagine a more impotent body.
It's not like the world was FORCED into using the dollar. They just used it out of convenience. Now they want to because we're having rough times and it's affecting them. I can't quite work up sympathy for these other countries.
It means that there is a growing consensus to alter built in monetary advantage that has allowed the US to live beyond its means for so long, in favor of a currency basket that spreads the benefits (seigniorage) of being the golbal currency reserve around a little more.
In the short term, no, but it has stark implications for our fiscal health and the US standard of living.The US is the standard bearer because we're a hyperpower. That won't change if they stop using the dollar as a de facto measurement.
It's a threat and it damn well better be heeded by this administration. They are telling Washington to get spending under control and not to monetize our debt (print money and consequently devalue the dollar).
they first told the last administration.
So what? If the the rest of the world decides that US dollar holdings are no longer in their own interest, there's very little any US president can do about it.
well the dollar is a joke
I vote for monopoly money
You beat me to it.
There is nothing the US can do to stop the world from dropping the dollar as the standard.
Honestly, its about ing time. Lets get this started already because the Dancing with the Stars-addicted American populace is due for a serious enema.
This would gut the US through and through. Maybe then and only then will more than 30% of Americans start paying attention to their government.
Too bad it takes years for this change, I'd much rather the member states of the UN make the change tomorrow so that reality could set in from record fashion for idiotic, complacent, uneducated, ed-up priority Americans.
Anyway, that was from out of nowhere....
Extremely painfull scenario ,but perhaps the best one we can hope for.
It's funny but even the "Dancing with the Stars-addicted American populace" gets it. Everyone is cutting back, paying down debt, and taking a long hard look at every expense and asking themselves "is this something we really NEED or just something we WANT?"
If only our politicians could get it.
Oh - I think many of them are going to "get it" come the 2010 elections.
Right, but thier personal finances aside, American politics boils down to Red or Blue team when neither deserves so much as a shred of consideration (save for the very few exceptions).
American people need to start voting in people based on their fiscal stances, not whether they favor abortion, gay marriage or any other wedge issue.
For all of Americans strengths, our weakness is the ultimate Achilles heal...
Too easily led. A byproduct of of public indoctrin...I mean education?
Hmmm.
What? So Republicans can wrest control of Congress and fail all the same only you'll feel better about their abject failure due to your preferred consonant being at the end of their name?Oh - I think many of them are going to "get it" come the 2010 elections.
Please.
Does it have actual implications, or is it merely a sign of changing times?
In other words, does changing the international standard from a dollar to something else actually AFFECT the US greatly, or is it just recognition that the US dollar is not strong?
And if the US dollar stops being de facto, then people from the US will buy will most likely purchase more items domestically. Many people won't be bothered to due the conversion necessary to buy something in another denomination.
"actual implications"
If oil is priced in Euros, and the Euro appreciates seriously, US's oil import bill appreciates seriously.
iow, the US becomes hostage to exchange rates the way other countries have been when oil is priced in US$.
I still see that more as a reflection of the degradation of the dollar compared to other monies.
#1 How will the rest of the world do this?
#2 Why would it be disastrous for the US?
israel better not allow this to happen.
Replace the current phony fiat currency with a new phony fiat currency.
it. It's time for all of us to quit paying attention to politics and go spend our funny money on hookers and blow. It's a celebrationnnn
Not suprising the Chinese ambassador is the one making the argument. China just started selling bonds and now they don't want their currency tied to the dollar. I think they have dreams of the yuan replacing the greenback. The OP should be led China calls for new reserve currency.
the World Champion of Capitalism and Free Markets has led the planet's economy, most of it, into a deep . US's credibility and trust in these matters has taken a serious hit.
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