U.N. Panel Says World Should Ditch Dollar

March.18, 2009

http://tinyurl.com/dfo4nb
A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar.

Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.

Persaud, chairman of consultants Intelligence Capital and a former currency chief at JPMorgan, said the recommendation would be one of a number delivered to the United Nations on March 25 by the U.N. Commission of Experts on International Financial Reform.

"It is a good moment to move to a shared reserve currency," he said.

Central banks hold their reserves in a variety of currencies and gold, but the dollar has dominated as the most convincing store of value -- though its rate has wavered in recent years as the United States ran up huge twin budget and external deficits.

Some analysts said news of the U.N. panel's recommendation extended dollar losses because it fed into concerns about the future of the greenback as the main global reserve currency, raising the chances of central bank sales of dollar holdings.

"Speculation that major central banks would begin rebalancing their FX reserves has risen since the intensification of the dollar's slide between 2002 and mid-2008," CMC Markets said in a note.

Russia is also planning to propose the creation of a new reserve currency, to be issued by international financial institutions, at the April G20 meeting, according to the text of its proposals published on Monday.

It has significantly reduced the dollar's share in its own reserves in recent years.

GOOD TIME

Persaud said that the United States was concerned that holding the reserve currency made it impossible to run policy, while the rest of world was also unhappy with the generally declining dollar.

"There is a moment that can be grasped for change," he said.

"Today the Americans complain that when the world wants to save, it means a deficit. A shared (reserve) would reduce the possibility of global imbalances."

Persaud said the panel had been looking at using something like an expanded Special Drawing Right, originally created by the International Monetary Fund in 1969 but now used mainly as an accounting unit within similar organizations.

The SDR and the old Ecu are essentially combinations of currencies, weighted to a constituent's economic clout, which can be valued against other currencies and indeed against those inside the basket.

Persaud said there were two main reasons why policymakers might consider such a move, one being the current desire for a change from the dollar.

The other reason, he said, was the success of the euro, which incorporated a number of currencies but roughly speaking held on to the stability of the old German deutschemark compared with, say, the Greek drachma.

Persaud has long argued that the dollar would give way to the Chinese yuan as a global reserve currency within decades.

A shared reserve currency might negate this move, he said, but he believed that China would still like to take on the role.

Category:

Education

Tags:

• new world order
• united nations
• obama
• bush
• deception
• ron paul
• economy
• bail out
• aig
• stimulus
• constitution
• new currency

[Paratrooper177]

Pull out of the UN? Uh huh...dumb ass. The US already is only in the UN for face value, illegal wars, torture, abuse of civil rights, america is the new germany of the 1930's.

[jasonfulton]

the United States should ditch the United Nations.

[wazzio21]

The end times are closes may god help us

[PhilippoChannel]

Fuck paper. Rp2012

[jmjfanss]

Well I Got News for the UN, get out.

VOTE RON PAUL 2012.

[invisibleaznDJ]

@tom1yum2goong Lmfao that's a joke right? The powers at be don't even know how to balance a budgets or spend within their means. Inflation is ridiculous with almost all major currencies around the world, and somehow we are ready for a 1 world currency!? no ofense don't dismiss reality and logic for some pie in the sky idea. When we start trading between planets hundreds of years from now, then maybe we will finally be ready as a species for this.

[tom1yum2goong]

@invisibleaznDJ Which is why we wouldn't make the same mistakes as the Europeaon's. Don't dismiss an idea just because someone did it wrong.

[invisibleaznDJ]

@tom1yum2goong yes because centralizing the monetary systems in Europe is working so well. Want to know what else really helps deficits and over all economic health, here is a big secret: Spending within your means, paying your debts in a timely fashion to avoid getting raped by interest and practicing financial responsibility. what a novel idea

[invisibleaznDJ]

@Paratrooper177 yes the US has many problems thanks to assholes like Bush and Obama to end the last 30 years of bad politics. But the US is more then just the face of the UN. They also fund much of it and acts like the UN police as well. . So with that being said. If the UN wants to ditch the dollar they may have to look for funding from the EU and mr rompuy. Which might be rightfully where the funding should come from since the UN serves European interests more these days.

[KrackowKid]

@jasonfulton Yes ye should, thanks.

[mothman64]

@Paratrooper177 fucked isn't it?

[tom1yum2goong]

A global currency is the most obvious and transparent solution towards economic equilibrium. Any denial of this is pure fear and I can understand people being scared. Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability.