A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said, Reuters reports.
Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.
It's coming.
Appreciate the heads up, as usual on your blog.
ReplyDeleteInteresting quote from the Reuters article: "Persaud said that the United States was concerned that holding the reserve currency made it impossible to run policy, while the rest of world was also unhappy with the generally declining dollar."
I don't recall any US officials, elites expressing this point of view in public to Americans.
Was one other quote in the article that's very interesting: "Persaud has long argued that the dollar would give way to the Chinese yuan as a global reserve currency within decades."
"A shared reserve currency might negate this move, he said, but he believed that China would still like to take on the role."
We clearly are entering a new era - I doubt the US for too much longer will be consuming the lion's share of the world's oil supply, especially without retaining the advantage of the dollar as the reserve currency.
From the Reuters piece: "Today the Americans complain that when the world wants to save, it means a deficit. A shared (reserve) would reduce the possibility of global imbalances."
ReplyDeleteI see now that Persaud's comments -- that the United States was concerned that holding the reserve currency made it impossible to run policy -- must be based in part on US officials blaming China for saving too much of the money printed in Washington.
Good points.
ReplyDeleteTop U.S.officials are obviously scared the dollar is going to crash before they can put in some type of reserve currency they can have influence over.