New Reserve Currency Threatening the Dollar Again
John Lipsky, First Deputy Managing Director at the IMF, said that creating a new reserve currency to replace the dollar is possible, and he also elaborated how. This news, that came over the weekend, could hurt the dollar’s comeback.
In a panel in Saint Petersburg, Russia, Lipsky said that such a step would be revolutionary, yet possible and would have advantages. How would it be done?
The SDRs would have to be delinked from other currencies and issued by an international organization with equivalent authority to a central bank in order to become liquid enough to be used as a reserve, he said.
It’s no coincidence that this kind of talk was heard in Russia: Russia is one of the countries that is pushing for a new reserve currency. About 70% of the world’s reserve are in dollars. Moving to such a “global currency” would hurt the greenback.
These talks about moving away from the dollar become more and more serious every time they’re on the agenda.
The panel was held on Saturday, when forex markets are closed. When trading resumes, the dollar could be hurt from the renewed threats. Friday’s dollar momentum could stop in the wake of the new forex trading week.
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This site is great.l also agree that euro will be on it’s feet again
Thanks Matthew!
willing to be more updated as to new currency
resaerve.
That’s right!
We really need to move away from the dollar as a reserve currency since the some of the Europeans and the Russians are resentful about the US having the reserve currency. If the Europeans and Russians become resentful that American English is the primary language used in international business, should we change to Esperanto? Sanskrit? Latin?
It is long past due. Esperanto is the language
for the world.
A currency ‘free from politics’ invented by the Russians. Wow. The fact is that no ‘international body’ will be trusted. Most people trust the UN as far as they can toss it. It will not happen.
A “reserve currency” that is from an “international body” will be a disaster.
The “reserve currency” needs to be from a sufficiently large economy that is stable. That narrows it down to … the dollar.
“could hurt the dollar’s comeback”
At a time when the U.S. economy is depressed, the dollar’s comeback is one of the worst things that could have happened to the U.S. economy. The increase in the value of the dollar internationally makes U.S. goods less competitive relative to foreign goods, both at home and abroad. Not only are U.S. exports hurt, but it becomes more difficult for domestic firms to compete with foreign competitors in the U.S. market. These factors will further slow the growth of the U.S. economy and keep the unemployment rate high.
The U.S. is walking away from democracy. What we see today is a two-headed dictatorship becoming every time stronger. This dictatorship is the puppet of the richest people of the country, i.e., U.S. stopped working for the good of the country a while ago, so the U.S. economy is largely at risk. Those seeing the U.S. economy as “stable” are dreaming or living in the past…
So, in terms of a reserve currency, I will ask first: Do we need a reserve currency? The U.S. is the de-facto reserve currency of the world but the U.S. is indebted (As of October 10, 2010, the “Total Public Debt Outstanding” was approximately 94% of annual GDP, ($13.616 Trillion) Wikipedia) and walking away and away from democracy. I do not think the U.S. can maintain this situation anymore.
Also, if a country has its currency as the reserve currency for the rest of the world, it gives this country an advantage when dealing with other countries. Why do think the U.S. took the role of having the reserve currency in the first place????
So, I think we have to move away from this scheme and I would fully support an independent currency. Although this is very difficult to do but it is completely doable.
There are some large economies: the EU and China obviously.
The RMB has issues, as it is overly state controlled (though that is changing).
The US did not take the role, after WW2 the US had an obscene 52% of global economy. There was not other possible choice.
i still believe that the international cuurency reserves that is in dollar should be maintain n actually the new upcoming politics-economic in any region anywhere globally inadvertantly would gain-consume from such depedency n creating new reserve currencies would put the global markets back to hundreds years of pain n sweats of taking the markets where it is now;just think that we do have the global markets for gold n oil as such like the Nymex comidity n so on n the solution is that put the wealth to the normal human beings!
Why does everyone forget the massive role that the unparalleled depth and liquidity of US financial markets plays in the dollars status as a reserve currency? Governments hold their reserves in dollars because it is the most liquid currency in the world, and therefore facilitates international payments far more efficiently than its closest competitors (Yen and Euro). The only other currency in terms of international economic significance is the Chinese Yuan, but until it is allowed to free float, it is entirely unsuitable as reserve currency. The creation of a new currency specifically for reserve status would take decades to achieve the depth and liquidity of trade to match the dollar’s efficiency in facilitating large scale transactions transactions.
Hate to rain on your parades people. The fact is the FIAT monetary system of world government is on its death bed. Mother Earth says so. They are trying to prop it up for one more run and land grab. In a nut shell it goes like this. Fiat money requires consumerism, which requires exponential population growth, which requires unlimited natural resources to maintain. Mother Earth says. Nada. Can’t do it. Can only make more so fast. The current civilization has learned nothing from previous civilizations. And those that have perpetuated the fiat monetary system of population control know this. Are as sick and evil as their fathers and forefathers going back in time tens of thousands of years. There is a reason for the saying. “MONEY IS THE ROOT OF ALL EVIL” It is.
I do not trust International bodies as the agenda is One World Totalitarian Government.Individual Nations are the Masters of their Currencies.Honesty is the most important factor which is lacking among the International bankers.
I still favour a basket of strong Currencies as the Reserve one.
I believe the quote is “The LOVE of money is a root of all kinds of evil.” (1st Timothy 6:10)