Friday, March 13, 2009

One World Currency Talk is Heating Up

Nobel Prize economist, Robert Mundell, who laid the key theoretical groundwork for the euro, is quoted in Agence France-Presse as supporting the call by Kazakh President Nursultan Nazarbayev for a one world currency.

"I must say that I agree with President Nazarbayev on his statement and many of the things he said in his plan, the project he made for the world currency, and I believe I'm right on track with what he's saying,'' Mundell said, adding the idea held "great promise''.

Nazarbayev and Mundell urged the Group of 20 leading developed and developing economies to form a working group on the proposal at their summit on the global economic crisis in London on April 2.

"We should deliver our thoughts and the thoughts of this conference to the leaders of those countries,'' Nazarbayev said, referring to the G8 and G20 nations.

Prediction: The working group will be formed, it may not result in a one world currency, but, at a minimum, a new reserve currency will emerge. The U.S. knows the dollar is on its last legs as a reserve currency and is trying to stick handle the world in the direction of a reserve currency that will allow the U.S. to play a major role.

It is important to note that Mundell is anti-gold and holds the absurd position that discipline under the Bretton Woods system was more because of the US Federal Reserve than to the discipline of gold. This despite the fact that gold can not be printed at will, while the "discipline" of the Federal Reserve has been demonstrated in its absence, given that the Fed has printed money from day one of its existence and that, the Bretton Woods monetary system collapsed because the Federal Reserve printed dollars far in excess of the gold then backing the dollar.

No comments:

Post a Comment