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Dollar should be replaced as international standard, U.N. report says (1 Viewer)

The Giant Noodle

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New York (CNN) -- The dollar is an unreliable international currency and should be replaced by a more stable system, the United Nations Department of Economic and Social Affairs said in a report released Tuesday.

The use of the dollar for international trade came under increasing scrutiny when the U.S. economy fell into recession. "The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency," the report said.

Many countries, in Asia in particular, have been building up massive dollar reserves. As a result, those countries' currencies have become undervalued, decreasing their ability to import goods from abroad.

The World Economic and Social Survey 2010 is supporting a proposal long advocated by the International Monetary Fund to create a standardized international system for liquidity transfer.

Under this proposed system, countries would no longer have to buy up foreign currencies, as China has long done with the U.S. dollar. Rather, they would accumulate the right to claim foreign currencies, or special drawing rights, or SDRs, rather than the currencies themselves.

The special drawing rights would be backed by a basket of currencies, which would make them less susceptible to volatility in any one currency. And because the value of a special drawing right is defined by the IMF, changes in the value of any one currency could be adjusted for.

These initiatives, supported by U.N. Secretary-general Ban Ki-moon, are meant to help sustain the international trade and financial systems that will allow less-developed countries to participate and integrate into the global economy.

In addition to the proposed reforms regarding international currency, the survey also offered guidance on increasing social well-being.

The survey said that "the number of the poor in the world living on less than $1.25 a day decreased from 1.8 billion in 1990 to 1.4 billion in 2005, but nearly all of this reduction was concentrated in China."

The number of poor increased in sub-Saharan Africa and South Asia over the same period. Income inequalities within countries have increased since the early 1980s with few exceptions, the report said.

"There's too little aid being provided, it's too fragmented, and it's too volatile in terms of the resources that are flowing to countries," said Rob Vos, director of the development policy and analysis division of the U.N.

The survey projects that by 2050 the population will be at 9 billion, with 85 percent living in developing countries, and the global economy will have to sustain a system that will allow for "decent living."

By 2050, one of every four people living in a developed country and one in every seven in countries now being developed will be over age 65. The fast ageing of the population will call for proper pension and health care systems that are sustainable.
[link to www.cnn.com]
 
The "basket of currencies" idea could be a prelude a new international currency as the next natural step, and I would be against it.

I think the GBP is the most stable. I wouldn't trust the Euro because it's too new and the EU is a fragile entity at this point. The Chinese yuan... heh... as long as the communists control its value there is no point.
 
The "basket of currencies" idea could be a prelude a new international currency as the next natural step, and I would be against it.

But wouldn't an internationally accepted currency reduce inefficencies in the market? The cost of hedging disappears. And I don't have to deal with annoying currency conversions, FX gains and losses in my job. Tourism would see a huge boom without the need to constantly convert. A single accepted world currency has real benefits. The downside is the lack of monetary control as we've seen in Europe.
 
But wouldn't an internationally accepted currency reduce inefficencies in the market? The cost of hedging disappears. And I don't have to deal with annoying currency conversions, FX gains and losses in my job. Tourism would see a huge boom without the need to constantly convert. A single accepted world currency has real benefits. The downside is the lack of monetary control as we've seen in Europe.

The other major downside is that countries would lose sovereign control over their own currency, which means that there would be no democratic process for lobbying one's government to change monetary policy. And I'm sure it would create a bunch of inequities that we aren't even able to see right now.

I'm generally against it because of what it would imply for world governance. I am firmly against such a suprainternational government.
 
The "basket of currencies" idea could be a prelude a new international currency as the next natural step, and I would be against it.

I think the GBP is the most stable. I wouldn't trust the Euro because it's too new and the EU is a fragile entity at this point. The Chinese yuan... heh... as long as the communists control its value there is no point.

i suggest the Australian dollar, we're a politically, geographically and economically stable country, and the only first world country to avoid a rescession in the GFC, and our major trading partner, Japan, is also very stable.
 
i suggest the Australian dollar, we're a politically, geographically and economically stable country, and the only first world country to avoid a rescession in the GFC, and our major trading partner, Japan, is also very stable.

Canada also avoided the recession which surprised many given that we're right next door to the U.S.

I'm not sure any one country's currency could be trusted as the standard, which is why they are suggesting a basket of currencies policy. As long as it remains a basket and not a one-world currency, then I'm fine with it. As soon as they talk about making a single international currency, we should all be prepared to protest. Such talk is neo-liberal garbage and will erode our rights in sovereign nations.
 
The "basket of currencies" idea could be a prelude a new international currency as the next natural step, and I would be against it.

I think the GBP is the most stable. I wouldn't trust the Euro because it's too new and the EU is a fragile entity at this point. The Chinese yuan... heh... as long as the communists control its value there is no point.

Ha! Since the Chinese peg to the dollar, the federal reserve essentially controls the monetary policy in China.
 
Australia and Canada are too small economically to have their currencies become major reserve currencies.


The value of the reserves in some countriesa are close to the size of the Can economy. To use the CAD as a reserve currency in any real number would drive the value of the CAD sky high
 
New York (CNN) -- The dollar is an unreliable international currency...the number of the poor in the world living on less than $1.25 a day decreased
[link to www.cnn.com]

It's funny that a group recomending that the US Dollar no longer be used as international currency because it is unstable, and yet they quote a study that uses the US Dollar as a constant international measurement of wealth.
 
The other major downside is that countries would lose sovereign control over their own currency

I do believe I mentioned that.

which means that there would be no democratic process for lobbying one's government to change monetary policy. And I'm sure it would create a bunch of inequities that we aren't even able to see right now.

Eh, I'm not that worried about that. We can't do that anyways even in democratic countries. The bigger problem would be applying polices that don't fit nations. Expansionary economies may want to restrict rates to reduce inflation, but economies who need looser rates to stimulate demand come directly into conflict with a single monetary unit. Hence, the EU.

I'm generally against it because of what it would imply for world governance. I am firmly against such a suprainternational government.

I wouldn't have a problem with a Heinlein-esque world government.
 
Not any more. :)

Um.... Yes. While the Chinese central authorities have allowed the RYB to appreciate a little more, they still peg it within a specific band to the dollar. Looks as though you've jumped the gun after hearing something on the news.
 
Um.... Yes. While the Chinese central authorities have allowed the RYB to appreciate a little more, they still peg it within a specific band to the dollar. Looks as though you've jumped the gun after hearing something on the news.

Oh, it appears i have. Sorry, i didn't realize that. I thought the Chinese would appreciate it completely. Misleading bastards!
 
Oh, it appears i have. Sorry, i didn't realize that. I thought the Chinese would appreciate it completely. Misleading bastards!

Not a problem. China would not risk shutting down their export machine in an attempt to spur domestic expansion during this stage in the global recovery.
 

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