| Submit your comments on this article | ||
| International-UN-NGOs | ||
| UN wants new global currency to replace dollar | ||
| 2009-09-07 | ||
In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises.
Although a number of countries, including China and Russia, have suggested replacing the dollar as the world's reserve currency, the UNCTAD report is the first time a major multinational institution has posited such a suggestion. In essence, the report calls for a new Bretton Woods-style system of managed international exchange rates, meaning central banks would be forced to intervene and either support or push down their currencies depending on how the rest of the world economy is behaving. The proposals would also imply that surplus nations such as China and Germany should stimulate their economies further in order to cut their own imbalances, rather than, as in the present system, deficit nations such as the UK and US having to take the main burden of readjustment. "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," said Detlef Kotte, one of the report's authors. "But you will also need a system of managed exchange rates. Countries should keep real exchange rates [adjusted for inflation] stable. Central banks would have to intervene and if not they would have to be told to do so by a multilateral institution such as the International Monetary Fund." The proposals, included in UNCTAD's annual Trade and Development Report, amount to the most radical suggestions for redesigning the global monetary system. Although many economists have pointed out that the economic crisis owed more to the malfunctioning of the post-Bretton Woods system, until now no major institution, including the G20 , has come up with an alternative.
| ||
| Posted by:tipper |
| #9 Currencies are all about trust. It used to be trust that they would be converted to gold on request. These days its trust that they won't be debased. The US admisnistration is debasing the USD by running unsustainable deficits. The Euro is to a degree a replacement. People trust the Germans, but the Italians, Greeks, Spanish would happily debase the currency. And good luck to anyone who trusts Russia, China and the UN. BTW, the world doesn't need a reserve currency. but without one international trade will be reduced. And some people would see less international trade = more self-sufficient national economies as a good thing. |
| Posted by: Phil_B 2009-09-07 21:19 |
| #8 If implemented this will cause the most damage to the economy you can possibly imagine. Now I won't be able to sleep. |
| Posted by: Bright Pebbles 2009-09-07 20:01 |
| #7 Only competing currencies will bring financial stability to the world economy. The current system is a cartel run for the benefit of rent-seekers. |
| Posted by: Bright Pebbles 2009-09-07 19:58 |
| #6 But, but, but I thought the UN was busy creating programs about masterbation for 5 year olds! |
| Posted by: Besoeker 2009-09-07 17:39 |
| #5 ...and a pony too. |
| Posted by: Procopius2k 2009-09-07 17:20 |
| #4 Seriously, I thought that is what the Euro was supposed to do. |
| Posted by: Redneck Jim 2009-09-07 17:02 |
| #3 the UN should print their own money. We'll withdraw our contributions and they can see just how accepted as currency their pieces of paper are |
| Posted by: Frank G 2009-09-07 17:00 |
| #2 Oh great, another bill for counterfeiters to play with. |
| Posted by: Redneck Jim 2009-09-07 16:49 |
| #1 Now that Obama's in office we finally are getting the full support of the international community. Feel the love! |
| Posted by: DMFD 2009-09-07 14:56 |