Posted on 02/26/2010 5:30:40 PM PST by FromLori
ominique Strauss-Kahn, the head of the International Monetary Fund, suggested Friday the organization might one day be called on to provide countries with a global reserve currency that would serve as an alternative to the U.S. dollar.
"That day has not yet come, but I think it is intellectually healthy to explore these kinds of ideas now," he said in a speech on the future mandate of the 186-nation Washington-based lending organization.
Strauss-Kahn said such an asset could be similar to but distinctly different from the IMF's special drawing rights, or SDRs, the accounting unit that countries use to hold funds within the IMF. It is based on a basket of major currencies.
He said having other alternatives to the dollar "would limit the extent to which the international monetary system as a whole depends on the policies and conditions of a single, albeit dominant, country."
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Unless it’s something tangible, he’s just trading one color of wrapping paper for another.
Let’s call it the Zer0,...........uh, the 0bama.
Who gets to control that printing press?
Begging the question, isn’t he? The Euro is a disaster, the Pound is on the verge of collapse...what’s the alternative?
The dollar is the weakest currency around, except for, y’know, all the others.
Can’t have a world government without a world currency.
That’s why the first proposal for a world reserve currency was backed by a basket of 30-odd commodities, to be called the “bancor.” This was back at the end of WWII, when the Bretton Woods agreement was being hashed out.
No one country could have hegemony over the others, as there’s no country that can corner the market on all 30 commodities.
The proposal went nowhere at that time, and we fell into an easy situation where the US dollar was the de facto reserve currency and the dollar was backed (in part) by gold until the Nixon administration. Since the 70’s, however, the world has been using the USD as a reserve currency because while it was no longer backed by gold, every other currency in the world either sucked worse, or simply didn’t have enough currency in circulation to be useful in world trade (eg, Swiss currency, backed in gold).
The bancor was the brainchild of John Maynard Keynes. It failed because it required countries with a trade surplus to be taxed on the surplus. There was a certain large creditor nation at the time that didn’t like that idea.
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