UN: Scrap Dollar as Sole Reserve Currency
June 30th, 2010SDRs blah blah. It’s a meta fiat currency. In other words, out of the frying pan and into the fire.
Via: Reuters:
A new United Nations report released on Tuesday calls for abandoning the U.S. dollar as the main global reserve currency, saying it has been unable to safeguard value.
But several European officials attending a high-level meeting of the U.N. Economic and Social Council countered by saying that the market, not politicians, would determine what currencies countries would keep on hand for reserves.
“The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency,” the U.N. World Economic and Social Survey 2010 said.
The report says that developing countries have been hit by the U.S. dollar’s loss of value in recent years.
“Motivated in part by needs for self-insurance against volatility in commodity markets and capital flows, many developing countries accumulated vast amounts of such (U.S. dollar) reserves during the 2000s,” it said.
The report supports replacing the dollar with the International Monetary Fund’s special drawing rights (SDRs), an international reserve asset that is used as a unit of payment on IMF loans and is made up of a basket of currencies.
“A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency,” the U.N. report said.
The report said a new reserve system “must not be based on a single currency or even multiple national currencies but instead, should permit the emission of international liquidity — such as SDRs — to create a more stable global financial system.”
SDRs…
special
drawing
rights
so, who is special?
and who will be given the drawing rights?
these are not particularly challenging riddles. HA.
Reuters? SDR? Going mainstream in 6 months.
The blather about SDRs is an act of desperation. The IMF is broke. Keep an eye out for the two-tiered Euro currency system.
Here’s Jim Willie, from his “Path to Gold-Backed Currency” piece:
“… the Special Drawing Rights, the equivalent of a rusty corrosive chopshop car whose engine is still seized up, runs at extreme inefficiency like 1.5 gallons per mile, but sports a spiffy new paint job.”
http://www.marketoracle.co.uk/Article20560.html