Un Calls for NEW Reserve Currency!

[Mega]

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSp9VoPeHquI

Good Idea?
Gold Friendy?
Call Alex Jones?

Mike

[rabot10]

Seems very bad for the dollar

[ThePythonicCow]

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSp9VoPeHquI

Good Idea?
Gold Friendy?
Call Alex Jones?

Mike
If you're going to call into the Alex Jones show, let us know ahead of time so we can listen to you live on the air!

Whether it is a good idea or not is probably none of our business, as in "we don't get a say in that :(."

Whether it is gold friendly or not is unclear. It might be that that U.N. commission recommended SDR's instead of gold, intending to further depecrate the monetary value of gold in any world in which they have a say. It might be that that commission has no more say in squat than do you or I. It might be that this is an intentional precursor of something more in this direction, or an intentional head fake away from what some hidden powerful interest intends. Who the heck knows?

In any case, step-by-step (and no assurances all the steps will be delicate) we are moving away from a world having the Dollar as its single dominant Reserve Currency.

The essential steps in the evolution of currency for the major nations of the world over this last century have been the following:


gold certificates
gold backed currencies
gold backed dollars, other currencies dollar backed
oil backed dollars, other currencies dollar backed

In the current recession/depression/economic downturn/... oil is modestly less in demand and we are not bumping up so hard against the Peak Cheap Oil limits as we would be if we still had robust economic growth. This temporarilly weakens the power of the major oil producers, such as Saudi Arabia.

However any possible upturn will collide with the certain decline of Cheap Oil resulting in renewed powers to the major oil producers. At that point, if not sooner, what currency they choose to back will quite possibly determine step (5) in my list above.

[babbittd]

download the report http://www.unctad.org/Templates/webflyer.asp?docid=11867&intItemID=1397&lang=1&mode=downloads


A step that would go much further than the introduction of a substitution account would be to enable a new “Global Reserve Bank” or a reformed IMF to issue an “artificial” reserve currency, such as the “bancor” suggested by Keynes in his Bretton Woods proposals for an International Clearing Union.6 The new global reserve system could be built on the existing system of SDRs (Akyüz, 2009). One possibility is for countries to agree to exchange their own currencies for the new currency, so that the global currency would be backed by a basket of currencies of all the members. But other variants are also discussed in the Commission’s report. The new system could contain penalties against countries that maintain deficits, and equally against countries that maintain surpluses. A variable charge would be levied depending on the size of the surpluses or deficits.

[rj1]

The new system could contain penalties against countries that maintain deficits, and equally against countries that maintain surpluses. A variable charge would be levied depending on the size of the surpluses or deficits.

That's what the euro has and I don't think the ECB has done anything of the sort.